Double Yellow's Company Driver to Independent Thread

skateboardman · Jan 27, 2016

RedForeman said: ↑

Opposite for me. On mine I just have to turn it on, set the paper in it, and run the scan app on my laptop. Wifi connection and the printer stays in one spot plugged in all the time. I'd waste more time taking cell phone pictures, cropping, and stitching up pdf pages.
Click to expand...

I am a dinosaur too, I scan and then tranflo right from the truck

PALOU · Jan 29, 2016

double yellow said: ↑

I made the switch from company driver to independent nearly 6 months ago and I finally feel like I'm getting into the swing of things. I recently reached the point where my income & receivables have exceeded my cumulative expenditures a feat I consider outstanding for a 6 month-old capital-intensive business. Since I've learned a ton from this forum (just the stickies in this section alone are a goldmine!), I'd like to share what else I've learned while the lessons are still fresh in my mind. I also hope this thread will spur constructive business discussions (from which I can learn even more).

I especially hope that this thread will convince people who might otherwise enter fleece purchase program to hold out until they can buy their own truck (or use more conventional financing).

So with that said...

Where do I start?

1) Decide on what business structure you will use. Sole Proprietorship, Partnership, Corporation, LLC, etc ($0-1000 and 0-3 weeks depending)

2) Register your business name ~$25 & 1-5 days

2a) If your business name is not your last name and clear on the manner of business you will also need to file a fictitious business name statement. "Smith Trucking Company" would not require one if your last name is Smith. "Super Trucking Company" would (unless Super is your last name). "Smith Enterprises" would also require one because "enterprises" is too vague of a business description. ~$50 & ~1 month (have to run fictitious name statement in newspaper for like 3 weeks before you can be approved).

2b) You may want to register with NMFTA to get a SCAC code. Few shippers & brokers require this, but you will definitely need it if you ever deal with Customs. ~$70 in an instant online application

3) Obtain Federal & state tax ID numbers (free for federal)

3a) Obtain a DUNS number (free, though they will try to sell you services)

4) Set up a business bank account. Be prepared to offer proof of your business address.

4a) Set up a business "rewards" credit card (e.g. 3% cash back). This is just to use for payment whenever there is no fee for paying with credit card -- you will pay it off every month from your business bank account. DO NOT use this as a source of credit!!!

5) Get a business license if you ever plan to do business inside your city (~$25 & 1-14 days)

6) Register with the fmcsa & get a DOT number ($300 & immediate online application). Once you do this, you'll have 2 months to complete the other required steps to get your authority active.

7) Shop for insurance. You will want $1,000,000 "auto liability" ($5,000,000 if hazmat), and at least $100,000 cargo insurance (some shippers/brokers ask for $250,000). You may also want Physical Damage insurance (this covers the cost to repair/replace your truck), General Liability (some shippers and brokers ask for $1,000,000), and Gap (covers any gap between your truck's replacement value and your outstanding loan). Insurance agents will ask for your DOT and/or MC number (you'll get the MC# in step 6, but it isn't active yet), the truck year/make/model or VIN, and maybe a trailer year/make/model or vin. You should have been doing lots of window shopping up to this point -- copy the VIN from ads of equipment like what you expect to buy just so the agent can get you a reasonably accurate quote. Expect quotes from $7,000-$25,000 depending on your needs. And expect quotes to take 1-7 days to even get.

8. Get a process agent (this is a free service as part of your $45 OOIDA membership).

9) Find a place to park your truck. Plan on it taking at least a month from the time you buy your truck to the time you have everything needed to start rolling... ($0-100)

10) Join a DOT drug testing consortium and have your drivers get a pre-employment drug screen ($250 & 3 days)

11) Buy your truck (and trailer?). $10,000-$210,000 (plan on taking a month if shopping for used).

12) Buy insurance $7,000-$25,000 & 1-3 business days.

13) Get DOT inspection(s) -- $0-$100 & couple hours (not including any repairs)

14) Buy trip permit to move truck (and trailer?) $0-$400 depending

15) Pay HHVUT: $550

16) Register and pay for UCR: $80

17) Register truck and get base plate ($2000-$20,000 & 1-14 days)

18. Sign up for IFTA (~$10)

19) Get weight-distance permits to operate in New York (~$15), New Mexico (~$15), Kentucky ($25), Oregon ($2000 bond refundable after 1 year or you can buy 5 trip permits/year).

20) If you're a CA resident, you'll need to apply with CHP for a CA number (free) and then apply with the DMV for a California Motor Carrier Permit ($50 & 3+ weeks). You'll also need to apply for a CHP BIT inspection ($750 for 1 truck & trailer).

21) Get laptop, portable printer/scanner, cell phone with data plan & hotspot, & e-fax account

22) Get decals -- minimum is 2" high contrasting-color lettering with Trucking Co name and USDOT # (no space between US and DOT). If you're out of California you'll want the CA # to be right below the DOT. You may also want the last 8 of your VIN if you run in Colorado.

23) Toll and Scale Transponders: Prepass, EZ pass, Pike Pass, Tx Tag, Sun Pass, etc?

24) File business property statement & pay tax with your local jurisdiction

25) Register and pay Use Tax (difference in sales tax you pay for items purchased out of state)

How much money will I need?

I believe I did things just about as cheaply as can reasonably be expected to succeed with a dry van, so consider this the minimum (especially the fuel). With that said, here are my numbers from the top of my head:

Truck: $14,500
Trailer: $6,250
Initial repairs/delayed maintenance: $5,000
Insurance: $8,000
Base Plate: $2,200
title (truck) $1,200
title (trailer) $500
2290: $550
DOT #: $300
Other permits, fees, & taxes: $500
Office expenses (load board, cell, data plan etc) $250

Fuel for 6 weeks: $7,500
Maintenance for 6 weeks: $2,250
Driver salary for 6 weeks: $4,500

SHTF maintenance reserve: $10,000
------------
$63,500

If you don't have ready access to at least that much capital, I strongly urge you to delay becoming an independent owner operator. How much is cash & how much is financed will be up to you, but if you do finance some/all of that, minimize your cost of capital; E.G. factoring: 80% APR, Insurance installment plan: 20% APR, credit card: 15% APR, Equipment loan: 10% APR, Home equity LOC: 5% APR

How long should it all take?

Here is my timeline:

10/06/11: Got my class A
10/17/11: Started as a company driver for Covenant
10/19/12: Left Covenant
12/03/12: Started hauling water in North Dakota for a shady subcontractor of a subcontractor
12/31/12: Left that water hauler owed over $6500 (would eventually be paid in April after filing a dispute with the ND labor board)
01/21/13: Started as a company driver for Con-Way Truckload
11/30/13: Posted preliminary business plan #'s on TTR http://www.thetruckersreport.com/tr...3395-how-do-my-preliminary-business-plan.html
05/06/14: Gave 2 weeks notice to Con-Way and applied for my DOT #.
05/22/14: Turned in Con-Way's truck & began truck shopping.
06/26/14: Bought my truck (and insurance)
07/03/14: Federal authority went active
07/07/14: Submitted requested documents online for my new entrant safety audit
07/14/14: Bought my trailer
08/08/14: California Motor Carrier Permit (finally) Approved
08/11/14: Hauled first load as an independent
08/12/14: Got my first open scale green light on the Prepass (GREAT feeling!)
08/25/14: Passed new entrant safety audit (processing had been delayed until I hauled my first load for hire)
09/14/14: Received first check
10/06/14: Received first roadside inspection (passed)
10/09/14: Income, receivables, & assets exceeded total expenditures -- breakeven point!
11/03/14: Income & receivables exceeded total expenditures (business paid for the truck, trailer, etc)

Aside from taking over 1 month to find a truck, the biggest delay was the California DMV first taking 2 weeks to process my apportioned plate registration (due to a catch 22 where they required IFTA first, yet IFTA required an apportioned plate first), and then taking nearly another month to approve my California Motor Carrier Permit without which I could not do business in CA. In hindsight, I should have just deadheaded to Reno after getting my trailer's license plate since my interstate authority was active, but I kept thinking it'll just be another couple days...
Click to expand...

What about Mc number?

double yellow · Jan 29, 2016

If they are still giving them out, you will get it in step 6 along with the DOT#.

They were going to drop MC numbers altogether last October, but it might have been delayed.

PALOU · Jan 29, 2016

double yellow said: ↑

If they are still giving them out, you will get it in step 6 along with the DOT#.

They were going to drop MC numbers altogether last October, but it might have been delayed.
Click to expand...

Thank you double yellow
One more thing yellow do owner operators need to feel form 720 ?its a question to ask while applying for an EIN

PALOU · Jan 29, 2016

double yellow said: ↑

If they are still giving them out, you will get it in step 6 along with the DOT#.

They were going to drop MC numbers altogether last October, but it might have been delayed.
Click to expand...

Here is my case I just bought one truck and try to put one driving in it
so what is the simplest way for me to protect my personal assets .

double yellow · Jan 29, 2016

PALOU said: ↑

Thank you double yellow
One more thing yellow do owner operators need to feel form 720 ?its a question to ask while applying for an EIN
Click to expand...

My understanding is no, the typical owner op will not need to file a form 720.

I believe where it comes into play is if you have your own terminal where you buy fuel, tires, etc in bulk (pretax).

PALOU said: ↑

Here is my case I just bought one truck and try to put one driving in it
so what is the simplest way for me to protect my personal assets .
Click to expand...

That'll probably be a state-specific question -- I'd talk to an advisor about your options: LLC, corporation, some sort of trust, etc

dca · Jan 29, 2016

Nipton poe wasn't open yesterday. still doing wotk on it.

truckerdo · Feb 3, 2016

Man, what an amazing thread this has been to read through. Tons of amazing people contributing great, helpful and insightful information. It is priceless to get real time info/updates from someone that is doing the same thing that I am persuing.

Up until black friday, I also was grinding it out on Poker Stars 60+ hours a week multi tabling sitngos for about 2 years. The day after I logged on to see that wonderful message from the DOJ I found out we had a kid on the way. At that point I figured either try and follow

double yellow · Feb 3, 2016

Its funny, when I first saw that fbi splash screen I remember thinking "well, there goes supernova elite..."

truckerdo · Feb 3, 2016

DY, what an amazing thread this has been to read through. Tons of amazing people contributing great, helpful and insightful information. It is priceless to get real-time information/updates of someone doing the same thing I am in the process of doing.

Up until Black Friday, I was making a living grinding 60+ hours a week multi-tabling sitngos on PokerStars for about 2 years. The day after I recieved that wonderful DOJ letter I found out we had a kid on the way. I had two logical options, in my mind, either follow a poker circuit like wsop or go get a real job, ya know a good one that would require a piss test . With a good chunk of money tied up between a couple sites, alot of online pros going to play live and uncertainty about what results would be like….well, i’m on truckers report and not twoplustwo. Anyways..I got a little off track.

I started a thread a few years back when I was thinking about going from company driver to o/o running under my own numbers. I was going through it lately and saw that you had posted a few times on there when you were deciding between companies to lease to. I ended up buying a truck and leasing to a small company, 30 trucks with about half of them being o/o and getting 78% pulling their trailer. I ended up parking my truck due to problems I couldn't resolve with emissions on my truck with the paccar engine. I recently traded in/ordered a new truck(kw t680 w/ cummins) that I was planning on leasing on, but now I am seriously considering my own authority again. I think going the lease route at first was a good decision. It was atleast a good learning experoence and a good stepping stone. I know rates have been pretty rough for a while now, but is that a reflection of the low fuel prices more than anything? Have you been running much lately or have you been parked, since the time of year? I guess I was just wondering how things have been going lately as far as rates and all. Also, do you think it was the right decision, for you personally, to run under your own numbers vs leasing onto your best choice company? Hope all is good.

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