Are you happy you are an Owner Op?

A lot of people fail at this business because it is “cheap” to get into ...but most don’t realize how much cash it takes to keep the lights on day after day. They take their entire cash worth and buy a truck but they do t have the money to float all the expenses associated with running the business. Any hiccup in the road and they are up against it.

Yes you can factor your receivables but if the truck is down you are not creating any receivables.

Run 2500 miles a week and you are chewing up $1500-2000 of your working cash, if it the same week as your truck payment and your insurance payment - now you are in another $3000. Then you have a minor breakdown that lifts $1000 out of your pocket... well you see where this going you can easily be out if pocket $10,000 in one week while hauling a load from California to Jacksonville.

So being able to make money is the easy part, managing money is the hard part. As you start to get behind generally you start to make desperate decisions- deferring maintenance, adjusting your logbook, stretching out payments and worst of all taking loads to “cover” your fuel - loads that you know do not generate enough money to operate and reserve cash to get ahead.

Yes, I like what I do and do it by choice but it can be very trying even under ideal circumstances.

So should you? Look at you bank account and answer the question yourself - could I come out of pocket for whatever educated guess you think your weekly expenses are likely to be and still have enough resources to fight again next week?

I hope this helps you even if it doesn’t cheer you up ....

 

I would say that statement about 90 percent accurate....

Don't be fooled either..there are some owner ops retired now and a few still working with enough to live on for decades.....
Me personally.....I started saving at age 22.....almost 30 years ago. Yes,the union is where I suggest to the beginners looking to live a good life.....but a good portion of us independents are doing "just fine"

 

I have found that people that are not too bright that are successful are successful because they didn't overthink it. Some have a little luck along the way, some don't care if they cheat or whatever else. They just do it and don't think about it and don't worry about it.

The reasons people fail are numerous. I myself think a good part of that is guys that have to have the big Pete with the big cat with all the chicken lights and chrome wheels and Polish tanks and shiny trailers and they don't really have an idea what it cost to operate or what it means to really make money. What you need is a truck that will start and go everyday and do what you need it to and keep going so that you can make money. Beyond that is nonsense.

I think a lot of people think they're going to buy a truck and drive a little bit and they've got a lot of money in their pockets and they buy a Corvette and they buy a boat and they buy diamonds for their lady friends and take big lavish vacations and then wonder why they go broke.

I think some guys actually think that when they buy a truck it's all going to be gravy and it's just like working somewhere except you make a lot more money and you have a lot more money in your pocket and it's great and wonderful.

And that's the point - your point of view of what it's going to be is important. Plenty of time making sure your paperwork is Right. Plenty of time working on your truck instead of being out with your buddies or the ladies. Learning, learning everything that you can about this business about your truck about Brokers about shipping about contracts and how to do repairs and anything else that you can learn.

And then there are guys they want to make $5,000 a week but they cry if they need a tire. They want to put big chunks of cash in their pocket but they don't want to put the money out to put good brakes and drums and cams on their truck. They despise that part of the business. They don't think about the times they will have to wait to get paid or just because of the nature of things that maybe you worked all week and that week you didn't make any money.

A lot of people are very short-sighted, but if you have the right attitude and you understand the amount of work that puts you ahead.

I've been around trucks and Equipment my entire life. My father used to tell me never be afraid to put money into a piece of equipment that makes you money. If you are not afraid to put the money into it it will always make you money.

So the money that comes in can't go into your pocket, or out on your expensive car or taking your girlfriend crazy places or whatever it is.

That's the bottom line. You not only have to reinvest in your equipment, you have to look forward to it. That's not a bad part of the business. It's the part of the business that actually makes sure that you can go make money, reliably and dependably.

 

I have said this before and I will say it again.....trucking is no different than any other industry out there.
For starters if you don’t have any business savvy then you will fail. Doesn’t matter what the industry is
If you have to borrow the $ to get started becoming an owner of anything prolly is a bad decision and when you think about it if you had to borrow the $ you aren’t really and owner to begin with.
Compared to some businesses trucking is relatively inexpensive. Compare this industry to a local mom and pop machining company that is located in almost every town. The cost of a building can vary but you still are talking at least $50K investment there. Now buy a CNC machine and you just spent another $250K. Plus the other stuff....CMM machine $100K, etc and you aren’t stating that company for under $500K. Now look at business to business payment terms and you will be hard pressed to find any business paying in net 30 days and net 45 days seems to be the accepted standard. So cash on hand, advance on invoices or additions operatong loan is the only way.
And with only 1 machine you prolly aren’t going to get much work so you have to invest in another machine as well.
Are the industries the same? Well no but now you know why so people turn to trucking, it truly is inexpensive compared to some businesses and here in “Merica” we all have that entrepreneurial spirit to be our own boss.

 

Will you have a payment on your truck?

 

Is that after also paying yourself to drive the truck? If so how much are you paying yourself?

 

Gotcha. Well, that’s not gonna work. 3000 miles every week isn’t feasible. Also, you gotta get into a good enough position that there is profit after paying yourself 1300 or 1400 per week. What happens if you get sick or hurt? Your going to have to hire a driver or shut the doors to your business. This business is way too difficult to work your tail off for several years only to lose it and start back at square one.