Being Legal AND Profitable?

Discussion in 'Flatbed Trucking Forum' started by exneophyte, Jul 6, 2018.

  1. exneophyte

    exneophyte Bobtail Member

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    Long time lurker... one of my first times posting something. This is probably going to be thought by some as a dumb question, but I'll ask it anyway because I feel like my experience can't just be how it is. I met with a guy recently who was looking to sell his small 10+ year old flatbed operation(4 trucks) in the midwest and I was thinking about buying it.

    During our meeting, among other things, he bragged about his customers being so loyal to him because he was known to run overweight and getting loads to their destination faster than was legal. I decided not to pursue buying it, but it got me thinking...how difficult is it to be profitable and legal in the flatbed business? Do the operators who are willing to bend the rules just win out because they are getting it there cheaper and faster or is there a place for people who run an honest, legal transportation operation?

    I would suspect it is fairly easy to stay profitable now with the rates as high as they are, but what about in the leaner times?
     
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  3. TripleSix

    TripleSix God of Roads

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    There is one unmistakable trait that all stupid people have...they BOAST and BRAG about their stupidity. This guy is bragging about customer loyalty because he's running overweight and dodging scales. I'm no angel, but the only way I would even consider going out of route, dodging scales and running like a bat out of hell is for obscenely S-T-U-P-I-D money. This dufus did it to keep his customers. He didn't make any money. Fool!!!!!!!!!!!!!!!!!!!!! And hes actually bragging about it!

    Remember "Smokey and the Bear"? $80000 to bootleg a load of Coors to Atlanta from Texarkana. That would be nearly $200k today. I can see bootlegging for $200grand. But if ol Bandit was doing it just to keep a customer happy, it would have been "Smokey and the hctiB"

    You decided not to buy dufus' outfit. Smart move. It wasn't profitable. Not BOOTLEGGING profitable.
     
  4. taodnt

    taodnt Light Load Member

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    Nearby a private small motel went up for sale because the owners were retiring. When I called the number the owners directed me to a consultant who was "helping" them.

    During the initial discussion which was over the phone the consultant many times referenced the amount of cash business which allowed them to keep things "off the books". I finally said to the guy, you should really find out who you are talking to before giving out that kind of information, what if I were an IRS agent?
     
  5. Gumper

    Gumper Road Train Member

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    If you have to do things illegally to keep customers happy then you need different clientele. People who are constantly skirting the rules are not only hurting themselves, but also the rest of us. It’s like hauling cheap freight. Everyone other than the trucker gets rich.
     
  6. You should of talked to the 1-4 drivers who work for this 10yr company.

    It would tell you everything you need to know.
     
    Roger McG Thanks this.
  7. TheyCallMeDave

    TheyCallMeDave Heavy Load Member

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    Not so long ago (about a year) I talked with a flatbed outfit not too far from where I live. It was a 8 truck operation and they ran lumber for one single business that had 3 different warehouses in the area. When I showed up for the interview, the owner proceeded to let me know that it'd be a "cold day in hell before he ever let an e-log in his trucks, and that they were known for getting things delivered on time NO MATTER WHAT" which included skirting the law daily for various things which he detailed to me. I politely declined to say the least.

    What they were offering pay wise was no where near worth the potential headaches and heart aches, as a COMPANY driver. I suspect either the the owner of the trucking company was raking in money hand over fist, and didn't feel the slightest need to pass the $$$ onto the drivers who were risking their license daily, OR he HAD to run that way just to stay afloat due to getting #### rates and didn't give a #### enough to seek out better options.

    I couldn't care less either way as I figured it best to just dodge that bullet altogether. Funny thing is, about 2 months ago they contacted me again to try and persuade me to sign on with them. Oddly enough, in that 10 month time frame, they had lost all their drivers, gone through 2 truck pushers, 4 dispatchers, and never expanded their fleet to 21 trucks total, which was the original plan that would be done within a couple of months the FIRST time I talked with them. That was all I needed to know.
     
    Tug Toy and exneophyte Thank this.
  8. exneophyte

    exneophyte Bobtail Member

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    There was some of that too with this deal too. I never thought it would have come out in the first meeting and he would have bragged about it. I expected us both to be on our best behavior kind of like a job interview.

    Me: "Tell me how you made this much in revenue, which translate to roughly this many miles and the employee wages in your financials are 40% of what they should logically be."

    Him: "I wouldn't put too much stock on the financials you were provided with. I pay the drivers directly and then spread the expense in other categories like parts and maintenance so its still a deductible expense, but I don't have to pay employment taxes on it."

    Me: "Wait, what?!?"


    I wish I could have. I didn't have that option When I asked about the drivers he told me, "the drivers who work for me might not work for you and vise-versa so plan on finding your own drivers"

    You buy an existing business for 3 things: customers, employees, and equipment. Well you just told me your customers expect you to run illegal so I don't want them. You aren't willing to put me in touch with the employees so the second reason is out. This leaves me with just buying the equipment. At that point, why wouldn't I just buy the equipment I want instead of the equipment you pieced together? No thank you.
     
  9. exneophyte

    exneophyte Bobtail Member

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    In all of your experience would you say guys like this who are willing to run illegal like that are in the majority or are most operators now running on the up and up?

    I've heard that people played pretty fast and loose back in the 80's and 90's. I guess I am just curious if those practices are mostly a thing of the past and I just happened to run across one who hadn't washed out yet or if it is still common-place out there.
     
  10. ichudov

    ichudov Heavy Load Member

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  11. Zeviander

    Zeviander Road Train Member

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    If he was making so much money, why sell?

    There is running hard and running smart. Sometimes, you have to run hard to get the job done, but you can remain legal as much as possible during that time. Running smart is picking the right customers to deal with and having a good broker that doesn't set impossible goals.

    Personally, I don't own (maybe some day) but if I did, I wouldn't bend over backwards to make customers happy. You can be a professional, make money and still remain within the confines of the law. Certain laws can be stretched, but purposefully breaking them, consistently, isn't a good way to do business.
     
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