No bank will give you start up capital unless you get a gov't backed loan... maybe put the biz in your wife's name and go the minority route.
Why not try to find a job working for a private carrier or an outfit that only runs for one company? Those jobs usually pay better and give you better benefits and home time. The outfit I'm leased to gave out spring bonus's and profit sharing checks a few weeks ago... one guy got $9300.00... and he got $6,500.00 earlier this year. Yes... those job DO exist!
This economy is headed downhill for a little longer before it starts to expand. Real unemployment is around 16% not the 9.X% that the feds say... it's unlikely wages and benefits will rise as long as we are struggling....
help!!! i am thinking of becoming an owner operator
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If you put 20% of gross in the repair fund something else goes short. You need to develop a Cost of Operation in Cents Per Mile. There was info in one of those threads on how I did this. You can't plan a business until you understand the cost of operation. This is the first step. No disrespect intended. Read the threads and come back to ask questions. Most of your questions will already be answered. It won't make any difference how much of an entreprenuer you are if you don't have a handle on cost and cash to operate on you fail. We read the stories all the time.
I'm not the most positive one around. If you'll read the threads I suggested you'll find out about my success and my failure as an owner/operator and why my view is so conservative.
Still I'll say if you don't have a few thousand, I don't know how you plan to pull it off.
If you are thinking about a lease purchase you are about to find out what poor is. That is a negative statement many weeks instead of a paycheck.
If you think you can make enough in five years to cash out, again you probably have a bad idea.
If you think you can afford to pay twice what a trailer is worth renting/leasing it, another bad idea.
With the slim profit margin in trucking, a mistake or two, a bad decision and no capital equal a short business life.
I fully agree. I own 2 trucks, one of which I drive and the other is a cow buggy (cattle hauler in yankee land).
if you want to try being an owner operator and are worried. Here's a couple options. A. get a decently put together OLD truck after finding a contract hauling water to oil fields...it's long hours but good pay and a great way to learn the BASIC ropes.
B. Lease which I highly suggest you RUN AWAY FROM unless you go to a program similar to a certain company out of Sepulpa, OK who has the most fair and most driver profitable lease program in the industry in my opinion.
With 18 months under your belt, you're most likely not going to be among Landstar's head of the class making 2.50 a mile...but "pay your dues" so to speak and complain not about your last job and make em a hand and they will make or break you but only with your "blood, sweat, and gears".
Sit and think LONG and hard which it seems you already have, before you decide to become an Owner Op. Yes we stand out and are highly regarded by the industry...but there MUST be a reason other than the whole "rebel" appeal. This is a tough industry driver, but if you are good to it and dedicated to your goals as well as the industry, it'll be good to you.
You may want to consider factoring as a form of financing. I run a factoring company and would be happy to answer any questions you may have. I can't promise you financing, but I can help you understand what factoring is, what to look out for and how you might get the best deal. Best of luck!
Unless you have some money put back, I would not buy a truck. Perhaps you should consider changing carriers, if you are not making any money where you currently drive. You may check to see where your money is going if you are unable to save. If you buy a truck without having any money then you are asking for problems. How do you expect to buy a truck without a down payment? Most lenders will require from 10-20% down with good credit. What will happen if you blow a tire or turbo and don't have any money?
You need to step back and take a realistic look at your situation. Most new owner operators fail due to a lack of capital. They start with limited or no capital and shortly after starting something happens to the truck and they don't have the money or resources to make the needed repairs. If you need a tow, you are usually looking at several hundred dollars and that is before the mechanics get started.
One big thing to remember about financing equipment and getting a bank loan or credit card for the startup funding is the fact that it is going to take at least 1month most likely 2 before you can have anything put in that trailer. The credit card companies and banks are not going to give you a break just because you are not making money yet. When I was looking into trucks I had between 12-15k budgeted I had a couple dealers tell me they could put me in a 1-3yr old truck and with that kind of down payment financing would be no problem and payments would only be around 1500 per month. However if you think about it 1500 for the truck probably around 1500 for the trailer and about 1-2k for a bank loan payment that is 4-10k that you would spend from startup funding just to cover those first payments.
As a final note listen to what most of these folks say, even I did not want to hear some of it but they are not lieing to you. You have to throw some money behind something like this and you have to accept that you could be sitting somewhere in a few months watching someone move into your house.
In the past 6-months I have 4 brokers that seemed to have played every game in the book to delay payment. When I ran them through several different factoring companies credit process, three came back as 60-day plus. But the load boards give them 30-day ratings. Hmm, not so much.
Some of the early issue I had with factoring had to do with contracts and fees. Seems that most that I looked at had some ugly contracts. As I got some referrals and learned more you can find companies that do not want to have you sign over your house.
On added fees, that was a balance between low or no fees and fuel savings. As I do not need money to run day-to-day, I can send invoices in on weekly or bi-weekly basis reducing Fed-ex fees (also have very low rate in Fed-ex). Then only have money transferred to fuel card and bank in single transfer versus on every invoice.
Buyer Beware is advised but as I have learned it is more than just a pay day loan at high rate.
I reread some of your earlier posts and I think that I may have misunderstood your position and what you may be able to do. If you have made the money you stated, then you should have a decent savings built up. I looked at your limited experience and lack of money you are making as a company driver and not the money you stated you made before becoming a driver.
I understand that you want to provided a good livelihood for your family. I am not clear as to whether you want to buy a truck and lease it to a carrier or get your authority. If you have the money to buy a truck outright or have a good down payment where your payments on a truck and trailer are low, then you may make it work. I do have some concerns about your limited time in the business.
I don't know that you will be able to get home more frequently as an owner operator than you can as a driver, but it is your truck and if you own it you can deadhead, if necessary, to get home. You need to play with the numbers and see if they make sense in your case. It is critical that you understand what it will cost you to operate and how much money you should reasonably expect from this type of venture. OOIDA has a basic worksheet you can download and play with different scenarios.
The amount of cash you need to get started will vary according to whether you want to lease to a carrier or get your own authority. I think you would probably be better off leasing to start, but everyone is different. You will need much less cash to get started when you lease to another carrier. Running your authority you will need considerably more reserves to help you get along until you get money coming back into the kitty.
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