How to become an Owner/Operator

Would you give the same advice if I said I did not want to work full time, all the time? Not sure if the financial dynamic would change if I wanted to work say week on week off occasionally, or something like that? Seems that the IFTA and insurance would still be the same if I was running or sitting on the couch with the kids, is that correct?


Thanks for your feedback.

 

YES........... Getting your own authority makes have more in control what you want haul and for who you want to haul, and WHEN you want to haul it.

 

Thanks for your input, I am trying to weigh all the pros and cons and will be making final decision this summer to Fall. I have the luxury of time to research the options and want to make use of that time to make the best decision.

Have my eye on a '04 FL Classic XL with 490k, CAT C15 550 (pre EGR I believe), 18speed, APU. I believe it can be had for less than $40k. I have up to $100k to start with and feel going in with no debt gives me the best chance to succeed.

Do you use a service to do your paperwork, IFTA, etc etc etc? After I filed for my DOT number I got calls from several companies who offered one stop shopping for most record keeping and filing services. Seems to be an added cost that can be avoided, but also helps keep things more complaint? Your thoughts?

 

I do all my paperwork, but again, I only run intrastate. I don't need ifta and the other stuff. I know many that do use that service for filing. But beware, some do take your money and don't file what has to be done. I had a buddy who waited almost 6 months to get his apportiont plates. I told him he better keep bugging them, and he finally receive them. Like everything else, shop around and ask questions or get a refferal from someone who uses them.

 

I'm not going to tell you getting your own authority is better, it very well may not be, but IFTA is based ENTIRELY on how many gallons of fuel you use in a quarter, it is not a fixed cost. If you use five gallons in Florida and five gallons in Georgia, but buy all ten gallons in Georgia, then the tax that you paid on five of the gallons will be credited to Florida, and you will only be responsible for paying the difference in the higher tax/gallon that Florida charges for those five gallons.

Cat didn't have EGR at all until the '07DPF engines, if it's really a 550 in an '04, it's an ACERT, which has two (compound) turbos. That's what they used when everyone else went to EGR. That sounds like a lot for that truck to me, that sounds about like what a comparable Pete or KW should go for to me.

I don't have any advice on whether or not to use bookkeeping services, but if you use one, you still need to have a good understanding of what's going on, because you will ultimately be the one held responsible.

 

Thanks G/MAN and Diesel Dave. I always hope for more and better information and the experienced hands like you never disappoint me. I just thought after I worked that up, knowing #### well it wouldn't work out that good, it was a big eye-opener to see how short the money was. It's no wonder so many fail.

On financing. I have a local bank that I have done business with for 47 years. Got my first bank account at 7 with a milk cow. We milked 13 head by hand. It was a second job for Dad. Boy was he smart to start me so young. Anyway, they will loan me anything except for a truck. Used to be able to get thousands on a signature before crooks made that a thing of the past. The point is truck financing isn't that easy to get. When I get a little further in, I may find I'll be facing a higher rate.

As for lease or authority, I've done both. Not an expert at either. I'd say authority because of the potential and the direction that leases have taken. If I were unsure I could handle the many tasks that authority will add, I'd consider leasing, while honing my other skills and make the change later.

As for a part-time approach, I think authority would offer the best opportunity. I think it would take more of a full-time mindset to make it work starting out, but you would soon have the bull by the horns and be ready to set your hours. I'm sure there are companies that you could make your plan work with too.

 

Depending on the carrier, they may either pay for your base plates or advance the cost and take it out of your settlements each week. Some will allow you to get your own base plate. The carrier will pay for your liability and cargo insurance. You are usually responsible for either bobtail or unladen liability insurance, depending on the carrier.

If you have not driven since 2003, you may find it difficult to lease to most carriers. Most require experience within the last 2-3 years.

I do think that it would be a good step toward getting your authority to lease to a carrier. The lack of recent experience could be the problem.

 

Most carriers to whom you lease will usually want you to be prepared to run. Those who are agent based and pay percentage may offer more flexibility. However, if you want to work part time, you may be better off running your own authority. However, I am not sure that I would go to the expense if I only wanted to run part time.

There are services whom will do your IFTA filings and bookkeeping for a monthly fee. There is software specific to the trucking industry that will help you gain control over your business. I like Trucknpro for the smaller operator. It will do most everything you need other than the actual IFTA calculations. Some states now offer online filing for carriers. This software will track and print your state mileage and gallons that you can then put into their online software or enable you to transfer the numbers to the state IFTA forms. www.trucknpro.com. Easy Trucking is another trucking specific software. It will do everything including invoicing and IFTA calculations, but is not as user friendly. www.easytrucking.com. Another software is Truckers Helper. They have several versions of this software from company driver to fleet or motor carrier. Some consider it a bit more complicated to use, but it does more than most other software including one that has compliance and brokering. www.truckershelper.com. Any of the three can do what you need. All offer either an online demo or trial so that you can check them out. You should be able to buy what you need for less than $200.

If you are computer literate, you can also keep track of costs and revenue with a spreadsheet. I just happen to like the trucking specific software, especially for the cost.

If you run your own authority your insurance costs will be the same whether you run or sit. IFTA is based upon the number of miles ran and gallons purchased in each state. That cost will vary from month to month. There are a few states which also have their own surcharge or added tax and quarterly returns which need to be filed. If you don't run you won't have any costs for any of these taxes.

 

Finding financing can be a real challenge for the first time buyer. In fact, it may be a challenge for those with experience with the current market. Some lenders may be willing to make a commercial loan when they may not make a loan on class 8 trucks. I have had two different lenders make me a loan on trucks even though neither did class 8 loans. If you have a good track record and credit it is easier to find the right financing.

 

Deff keep looking.... that engine (guessing it is a ACERT but might be a MBN. If it's a MBN, DO NOT BUY IT!!! I have one now and get terrible fuel mileage.

Anyways, that Classic gets bad MPG to begin with, then add the 18spd and CAT and now your around 5.2mpg on a good day.
Since you are good with numbers, figure this truck you're looking at gets say 5.2mpg and you are going to drive 2,500 mile s a week
Now figure a truck that gets 6.5mpg at the same mileage...... you will spend roughly $385 more EACH WEEK just to do the same job a different truck will do. Multiply that by 4 weeks a month and now you are blowing $1,540 a month. You could just get a good used truck that gets better MPG and reinvest the $ into your company. I highly doubt you will spend $1500 a month on repairs to said truck EVERY month.... just think about it.

Unless you are planning on running over 80K groos, the 18spd is really overkill unless you preffer it. Some guys love em, but it's really not needed unless your gonna do coils or something OS/OD

I honestly would suggest trying to find a International 9900i with a ISX and a 10/13 spd. They are great trucks, get good MPG and are eay to work on. Plus, their resale is still descent. If you can find a nice clean one with under 600k miles for say $30k I'd go for it. But that's just my .02

Like stated before, you can easily go find a nice used 98-00 Pete 387 or W900 that has a rebuilt engine for about $10k-$15k. Then you go buy a nice used trailer for $15k and you are into the whole deal for about $30k, thus saving your other $70k for unforseen happenings. Trucking happens a lot, and I'd rather break a $15k truck than a $40k truck. Same parts, same labor rates, ect..... it would just be the wisest thing to do. You can always upgrade once you have a good customer base and started to figure out the industry a little more.

Here, took me all of 25 seconds to find this amazing truck for a steal!!! And it looks sharp as hell

http://www.truckpaper.com/listingsdetail/detail.aspx?OHID=2891739&