Do independent contractors set their own hours?

Hi Martez, That was one of the biggest reasons I bought my own truck. I had enough of busting my hump for a company, and sometimes not even getting a thank you. I was expected as an employee to do what they said. Unless you are a total independent, you still have to answer to somebody, but you have more options. If I knew I wanted off, I'd fake a repair (not the best Karma) but there was nothing the company I was leased to could say. On the other hand, I was friends with the dispatcher, and she knew, in a pinch, she could call me, and I'd help her out. Nowadays, I don't know how I/C's make it with fuel and bills and all, but I guess it's all relative, and people do make it.

 

Short Answer, NO.

 

Next week off?

Really I wish that was possible but the truth is that the bills need to be paid and this means that unless you work out a plan, you will be paying bills late or not at all.

There is a lot more to this game than what appears to be.

 

What Lepton1 said! If you don't want to work full time you might be better off to find a smaller trucking company that will hire you as a "casual" driver. These can be few and far between, but they are out there. You still may not be able to dictate when you will work and when you won't, but at least it gives you a couple of good things: 1) a chance to learn the business, and 2) time to spend with family and taking care of your own business. I did this for a while back in my early days of trucking, and it worked out very well for me. Until it no longer did. The thing is, that this industry is all about changing to meet the changing needs.

The more flexible you are, the more value you are to a prospective employer, or customer. Good luck.

 

I'd like to add this for anyone that is considering jumping right on into becoming an O/O or independent:

It's said that a successful business is like a three legged stool. If you miss any of the legs, then the stool falls down.

Leg #1 - A Good Product

Many prospective business owners (O/O's) think to themselves that, "Hey! I have a GREAT product! I know how to drive and deliver a load. I have a great recipe for bread. My gizmo is the best!" etc. etc. etc. Having a great product is a good thing, but only one leg of the stool.

Leg #2 - Financing and Accounting

If you don't have enough money or know how to keep score, then you can't win. Period. This includes having sufficient capital to weather downturns, ability to collect debts owed to you, and excellent bookkeeping and accounting to keep you out of trouble. You have to know your costs and how much to sell your product to make a profit to grow your business.

Leg #3 - Sales and Marketing

You can have a GREAT product, but if you didn't do your market research or have great sales and advertising then who is going to know? For most O/O's they rely on the company they lease with to do their Sales and Marketing, ie. to provide loads for them. If you want to become an independent then you had better have connections and know how to sell your product.

I see many O/O's that struggle to rub two nickels together. They are baffled that their "great product" isn't automatically letting them shovel money into the bank. They can't be bothered with paperwork and shrink from selling themselves, then bemoan the fact that they are one breakdown away from going under.

Have a (Business) Plan, WORK the (Business) Plan.

 

Stop thinking about rates per mile and start thinking about cost per hour! If you want time off, then you have to define how time is factored in your cost of doing business. Some call it productivity, the reality is Time equals Money.

Time is a factor many overlook when it comes to understanding how to manage your money. Time is most important when it comes to having a life outside of being a professional driver. So, if Time equals Money, then how much is your time worth?

If you are planning on taking 5 days off, then you must prepare to save at least five days worth. The worth is the capital you will need to sustain all your responsibilities. With accurate projections and maintaining a budget you should already have a good idea what is coming and going in your financial accounting. If you are living week to week with no room to spare in your budget then you are not controlling expenses and saving enough from the income side of your business. The opportunities to own a business is not unique, owning a profitable business is and that is key to being successful. Success in my opinion is reaching the goal one has set without failure.

Is it easy to be successful? The answer to that is found by asking for help from other whom managed their time effectively and achieved their goals.

Look around the truck stop once in a while and see who is driving a ragged out p.o.s. and who is driving a clean well maintained late model rig? Someone is doing things the smart way and others are doing things the hard way.

A truck can be depreciated over several years as it value is reduced. It is short term investment. After five seven or ten years it will have lost its value as a categorized business asset and expense. Buying a truck can be depreciated on a balance sheet to offset tax liability. A good CPA can help you manage financial side of the business while you manage the operational side. The benefits of owning a business should always outweigh the liabilities. The Income must always exceed the Expense. The Profit and Loss Statement and Balance Sheet are designed to help business owners and independent contractors control and manage their net worth. If you don’t have any clue too what I am saying then you need to seek advice from a business consultant to determine your ability to be financially successful.

Now, back to taking time off; before you go running off to spend a week in the Bahamas’, you must do the math and really know the true value of time

 

The way a truck looks isn't always an indicator of how well the driver is doing. The driver of that new rig with all of that chrome probably has a note he's trying to make, where the guy in the "ragged out p.o.s." has a clear title. Both trucks get down the road just fine, and both trucks have maintenance issues to deal with (albeit the older truck is closer to the service limits of components he hasn't yet replaced so his maintenance costs will be somewhat higher). Both trucks are insured, but the ragged out truck carries lower coverages for collision and comprehensive coverages due to the lower value of the truck. The guy driving the ragged out truck can make just as much as the guy in the new truck, but his expenses are generally going to be lower.

So yeah, a new truck might look fancy, but chrome don't get you home. Give me a mechanically sound truck with a free & clear title in my hand and I'm a whole bunch happier than with a new & shiny truck that has a note attached.

...That and the new trucks just don't interest me all that much. That isn't really limited to semi's either...my 14+ year old Mack is the newest vehicle I own. Then again, I've still got an Atari 2600 hooked up for when I'm in the mood to play video games...so perhaps I'm not the best example of "normal".

 

The difference between an old truck and a new truck is more than meets the eye. I agree with you that having a paid off truck will cost less in daily operations up to the point where it starts to have maintenance and repair cost that start chipping away at your profits. At some point when the truck has to have a capital infusion just to keep it rolling is where the cut off point is for me. Yeah, I could install an after-market EGR and DEF system on a 2001 freight-shaker, but it won’t increase the value enough to offset the expense. In the worst case, the truck is literally falling apart and it is small repairs that add up at the end of the year that drags down the profit. Eventually, every mechanical part will have to be replaced in order for the truck to remain sound and road worthy. Some guys can't even afford to do an engine overhaul without having taken out a small mortgage on their home. Eventually all trucks will wind up in the bone-yard.

I am not saying you should go out and buy a 2015 Pete with all the neat chrome package add-ons they offer either, unless you're into a showing truck at GATS. Somewhere in the middle is a justified expense. There is an old saying; you have to spend money to make money!

The alternative is to purchase for cash a used truck. 50 to 60 K can be put away for the next truck, and then when you buy that truck it will add value as an asset which in part is depreciated against the fiscal year-end tax liability. On paper it shows the company had expenses that reduced profit, so a tax write-off is allowed over a set period of time (retained earnings). Meanwhile the Cash-Flow remains the same while the expense of a newer truck is adsorbed and becomes a write-off.

Leasing a truck is another option; it allows the owner to get into a newer model with lower monthly payments up front. On the back end is a balloon payment which can be paid off or refinanced for another three years. By then the Truck will have depreciated to its fullest value.

It all depends on the personal ambition a man or woman has and what their personal goal is. Some guys want to pull freight from Cali to keep their customers happy, other guys only need to pull two containers a day at the port of Miami to pay the bills. That's the difference that makes being your own boss why many have decided to become an O/O or L/O.