Currently leased thinking of going on my own

If you don't have the means to easily pay your bills and operating expenses for at least 3 months while you wait for your invoices to be paid then you aren't going to make it very far with your own numbers.

Even if you're a lease operator you'll need to be able to handle very expensive repairs and maintenance costs until you get paid.

I can't tell you what's fair when it comes to percentages because there are too many variables involved. I will say it sounds like you're not generating much revenue though if you need to factor and beg for quick pays.

If you can't manage to get some working capital saved up then you aren't being profitable. If you're not profitable well you're not really making out too well.

I would also recommend doing credit checks on any brokers you deal with to help avoid running for scumbags.

 

You didn't say what the terms were before, and what brought about the changes. That would speak of the quality of the deal you have with this partner.

10% in my opinion is the bare minimum to cover the invoicing overhead and liability/cargo insurance premium. So on the surface, it's fair. Whether it's good or not is another matter. Only you can tell if 10% of the rate is good for what you're getting from this guy.

This is a great big red flag that suggests cash flow problems with your partner he's not being honest about. Up to 45 days on receivables is not usual. You can reduce this by invoicing promptly and being more selective about who you're hauling for.

However, quick pay and factoring at 7-10 days should set alarm bells ringing. Once in a while a paperwork snafu could delay these. He's either not forwarding your invoices promptly and causing some delay, or just not forwarding the money promptly. Both broker quick pay and factoring should be at 1-3 days like clockwork. Both usually fund same day by some afternoon deadline, then take overnight to an extra day to go through the banking system.

Sorry if you don't want to hear this, but you (and your partner) sound like one of the thousands of new entries that started up during the post-covid boom times. Now that rates fell in half, fuel has tripled, and equipment doubled, the 2020 plan doesn't hold water any more.

My advice would be to avoid renting/borrowing/lease to own, in an attempt to dig yourself out of a hole. This is not the time for such risk. Unless your old truck is suffering some sort of imminent catastrophe, keep it for now and find an established, small/medium size carrier with solid business to lease on to. 10-50 trucks or thereabout. That will stabilize your cash flow and you'll probably do better making less percentage of a larger, more consistent number.

Then, once your business is on better footing, reconsider what didn't work right with the original partner, and apply those lessons to doing it on your own. You might make the case to go independent, and just as likely find that what you're doing suits you better. Honestly I don't think right now is the time to really make the moves you're proposing.

 

^^^ Good advice here ^^^

 

Time to bail .
Partnerships never ever work .

 

That's not a partnership at all. He's using you

 

10% is not bad running under his numbers. I am assuming that you are under his insurance as well.
Have several questions though:
Does he get you the loads?
Are they direct customers of off of the load board?

 

I know some pretty smart owner ops that sold or parked their trucks this year and went out and got jobs as company drivers.
If you were not absolutely killing it during the high times of the last two years, you wont make it through the lean times we are in now.
Being your own boss is a blast in healthy economy
Its no fun at all in a recession.