Considering investing in OSOW

If your friend has no skin in the game, other than just his next paycheck, then he doesn’t stand to lose any skin if he decides to walk away. Another paycheck is easy to come by & so are used to be friends.

All the red flags are there, he doesn’t have anything to show for past efforts, doesn’t have any credit, etcetera. So what exactly does he stand to lose, that would make him less likely to walk away, leaving you to hold an empty bag?

 

You know what this post reminds me of?

2007 when everyone and their mother decided that NOW was the time to quit their job and start flipping houses because it was easy money and anyone, even those with no experience could make a ton of money.

 

If you're not going to like the answer don't ask the question.

The replies provided have been honest and have expressed concerns for you in your situation. Not wanting the competition is perhaps missing the point. Not wanting another person who is over their head and cutting rates to try to survive may be a better description.

Good luck to you whichever way you go.

 

Very good perspective!

I am not in the heavy haul (for hire) business. We have a couple of good outfits here locally that I would and do use on occasion, but we decided to haul our own equipment for three reasons.
(1) The cost of waiting to fit into their schedule, even if it is only a day or two, adds up very quickly when we have equipment sitting and waiting.
(2) The cost to hire someone to drive 100 miles or more, haul our equipment 5 miles or less to the next job, and then return empty adds up quickly.
(3) I've been trucking on and off since 1980, and still enjoy it.

We also know to the penny/mile what it costs us to run our truck, and we cannot run for the rates that an outfit like yours will charge with the small amount of miles that we run. We keep our own lowboy for the convenience.

@chadwick404 , sharing numbers in this game really won't do you much good as your costs will vary too greatly from everyone else. The cost to haul OSOW increases exponentially as the size and weight increase. At a point the revenue you must receive to be profitable is less influenced by the truck operating cost, and more related to items such as route surveys, pilot cars, police escorts, utility company boom trucks, etc. Plus, you must factor in time awaiting permit approval. Your truck must recoup x number of dollars a day whether you are hauling or not. Then take into account having to have liability insurance to cover a million, or multiples of a million dollar cargo value.

As I recall, you mentioned jumping in at the 13 axle level. That's big boy stuff right there, and the likelihood of finding enough customers to trust that type of freight to a newcomer would seem remote at best to me. If you were talking 8 axle or less it would not be nearly as difficult to estimate operating costs, but cost per mile is still tied into the number of miles run. Variable costs combined with fixed costs change dramatically with the number of miles run. In the 13 axle game, even with a good list of customers, you are likely to sit for a month or two between loads. And looking at what I would guess as a minimum of about a $500,000 investment in an appropriate tractor and trailer you are going to need a large nest egg to keep yourself and another person alive during the slow times.

Having said all that, and coming from an excavating contractor and not a heavy haul outfit, none of this means that you cannot succeed, but were it me and I had $100,000 to invest (20% down) and another 100k for start up, I would want to know that I could live without income from this venture for at least a year in order to get the business up and running.

Maybe others with more experience will disagree, or add to the conversation, but again I believe that everyone has given sound advice.