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I didn't make it, but I want other startups to learn from my mistakes.

Discussion in 'Ask An Owner Operator' started by Michael H, Feb 2, 2017.

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sailboatjim Light Load Member

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Michael H said: ↑

After making it past the dreaded first year, I am now giving up my authority. Just as rates were going up and I was starting to get a handle on the business.

I thought I knew something about trucks and trucking when I started my company. I did my research, talked to people, had OTR and local driving experience, etc. In this past year, I have come to the realization I didn't know anything. What I've learned over the past year is amazing. The knowledge I have gained would have kept me from making my fatal error if I knew it beforehand.

Learning to deal with brokers, shippers, receivers and other drivers is not too bad. Basic people skills take you a long ways. Negotiating rates is fun. Having the ability to turn down a crap load is more fun. Keeping up with the paperwork is challenging, but kinda fun. Paying the bills and dealing with the government? Not fun. Never will be.

Here's where I screwed up. If you are thinking about becoming an o/o, this is free advice.

-I was underfunded going into this. I knew it, so no excuses. I had been working for a company, socking away startup funds. The company went out of business 6 months before I was ready to head out on my own. I rushed into my authority with no reserve funds. Had I not made mistake number 2, I could have sucked it up and recovered. However, I made my fatal mistake...

- I invested in a "lemon" truck. Plain and simple. I bought a truck I couldn't afford. The payments were killing me, but not as much as the maintenance. The added stress of the monthly payment caused me too many problems and led to robbing Peter to pay Paul. I was just talking to a friend who owns another trucking company. He complained about spending $5k on repairs over the course of last year on one of his trucks. I laughed and told him I spend a minimum of $5k a MONTH for repairs to mine! This is true. I had a lousy dealership mechanic pull one over on me last summer, which resulted in my truck sitting for three months while they did nothing with it. It took some strong arming from my financier to get them to finish the job. That resulted in at least $43k in lost revenue alone. But the payments and insurance were still due...
I couldn't dig out from under that when I finally got back on the road. I just spent 3 months out trying to play catch-up, to no avail. I was still constantly facing downtime due to repairs. That truck was as unreliable as the day is long.

I realize now, I could have taken the hefty down payment I had and bought a better truck with cash. No stress over monthly payments. No getting behind on two months of payments, no repos. I could have owned the truck outright, probably had a more reliable truck, and still be in business. Taking the knowledge I've gained, I'd have bought a much cheaper truck from Iron Planet auctions, or something similar. Owning the truck is the key to success, in my opinion. Having monthly payments, on top of all the rest of the learning curve and troubles you will face, is not a way to start on the right foot in trucking.

I offer this story of my failure not for pity, I don't deserve it. I offer it as an object lesson to those of you doing research on starting your own company. Don't over purchase. Stay with what you can afford to own outright and upgrade down the road after you've become a successful o/o. I hope this serves as a cautionary tale for someone else. Now, it's time to go store all my trucking gear, tarps, chains, binders, etc., sell the house and plot my return to trucking.
Click to expand...

That's why I'm driving my old 96 International, 3406E and no crap thrown all over the motor or all over the truck. Cheap to maintain and easy to work on. Always runs and very little trouble ever. It's safe, reliable and ugly. Do you think the loads know the difference?

sailboatjim, Feb 3, 2017

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swaggerjacker, rank and Hermit825 Thank this.
Accidental Trucker Road Train Member

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Hope you recover quickly and completely, sounds like you will.

Pre-emissions motors aren't a guarantee.of success. My 2001 Series 60 needed an inframe 6 months after I bought it at 630 K miles, and again after a head gasket failure at a million. Sometimes, it's gonna break, regardless. Darned near broke me the first time.

Money in reserve in a maintenance fund, bad debt fund, and general rainy day fund is absolutely necessary to have a good chance at success.

Accidental Trucker, Feb 3, 2017

#32

blairandgretchen, rank and Toomanybikes Thank this.
blade Heavy Load Member

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pattyj said: ↑

Excellent post,its stories like yours that kept me as a company driver.
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That's a horrible way to live your life afraid to take a chance on life he may not have succeeded but he tried and as long as he keeps trying other doors will open

blade, Feb 3, 2017

#33

Al. Roper, Oxbow, redoctober83 and 2 others Thank this.
pattyj Road Train Member

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blade said: ↑

That's a horrible way to live your life afraid to take a chance on life he may not have succeeded but he tried and as long as he keeps trying other doors will open
Click to expand...

Do you have any idea what the percentage is that fails?Its high.You wanna take a chance more power to you.Me I listen to other folks and make my determination then.I'm not talking about just owner ops but also lease operators.I'm not going to gamble my money and work harder then I should for peanuts and an outstanding debt.You wanna throw your money away then why not lose it in a casino.

pattyj, Feb 3, 2017

#34

wore out, rank and Western flyer Thank this.
LoJackDatHo Medium Load Member

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I think the problem lies within the perception that you can just buy a truck, get loads and make money. In the OP case, he was trying to do it right, but bc the company he was with shut down, it forced him to move up his time table by 6 months or more.

Now getting a lemon truck doesn't help matters. Also, we don't know what kind of freight he was after, did he own or rent a trailer, did he work for non paying brokers or companies. Also, the 3 months in a shop with no income and still out the repair bills killed him. I used to lease on O/O's that begged for help, just to have them stab me in the back. Another situation I had with an O/O was he tried it on his own, bought a junk trailer, couldn't work on a darn thing himself, and didn't know that you could negotiate with brokers. He had been an O/O for several years before coming to me, so I figured he had a clue. I was WRONG.

I am more than willing to help anyone out. I have often thought about bringing O/O back on, but I run a tight business. My customers are very discerning and I am in a specific niche market. I work about 9-10 months a year. Run about 75k miles and am happy with what I do. I fingerprint most loads. Everything sounds good till that point, right. Once you tell a driver he has to work, ba bye potential driver.

LoJackDatHo, Feb 3, 2017

#35

Oxbow, redoctober83 and Crusader66 Thank this.
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Loose Leaf said: ↑

Maybe you can use your authority and put others like me to work?
Click to expand...

Did you try Craigslist?
Did you try "Seek Employment" thread on here?

Chinatown, Feb 3, 2017

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Triple C Thanks this.
Loose Leaf Medium Load Member

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I know all the companies cl for over 5 state radious.

Been on that site looking at options for 3+ years

Loose Leaf, Feb 3, 2017

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This OP's experience is 100% of why I don't own truck(s) right now. I'm very much in the industry and I have freight... But I'm not sure I want to bet this kind of money on owning trucks, an activity I have no experience of. Seems like the actual act of buying the truck is a hugely skill intensive activity that is very risky.

boredsocial, Feb 3, 2017

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LoJackDatHo Medium Load Member

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Loose Leaf said: ↑

Maybe you can use your authority and put others like me to work?
Click to expand...

May I ask what it is you meant by your statement? Just curious

LoJackDatHo, Feb 3, 2017

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mjg4015 Bobtail Member

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Michael H said: ↑

After making it past the dreaded first year, I am now giving up my authority. Just as rates were going up and I was starting to get a handle on the business.

I thought I knew something about trucks and trucking when I started my company. I did my research, talked to people, had OTR and local driving experience, etc. In this past year, I have come to the realization I didn't know anything. What I've learned over the past year is amazing. The knowledge I have gained would have kept me from making my fatal error if I knew it beforehand.

Learning to deal with brokers, shippers, receivers and other drivers is not too bad. Basic people skills take you a long ways. Negotiating rates is fun. Having the ability to turn down a crap load is more fun. Keeping up with the paperwork is challenging, but kinda fun. Paying the bills and dealing with the government? Not fun. Never will be.

Here's where I screwed up. If you are thinking about becoming an o/o, this is free advice.

-I was underfunded going into this. I knew it, so no excuses. I had been working for a company, socking away startup funds. The company went out of business 6 months before I was ready to head out on my own. I rushed into my authority with no reserve funds. Had I not made mistake number 2, I could have sucked it up and recovered. However, I made my fatal mistake...

- I invested in a "lemon" truck. Plain and simple. I bought a truck I couldn't afford. The payments were killing me, but not as much as the maintenance. The added stress of the monthly payment caused me too many problems and led to robbing Peter to pay Paul. I was just talking to a friend who owns another trucking company. He complained about spending $5k on repairs over the course of last year on one of his trucks. I laughed and told him I spend a minimum of $5k a MONTH for repairs to mine! This is true. I had a lousy dealership mechanic pull one over on me last summer, which resulted in my truck sitting for three months while they did nothing with it. It took some strong arming from my financier to get them to finish the job. That resulted in at least $43k in lost revenue alone. But the payments and insurance were still due...
I couldn't dig out from under that when I finally got back on the road. I just spent 3 months out trying to play catch-up, to no avail. I was still constantly facing downtime due to repairs. That truck was as unreliable as the day is long.

I realize now, I could have taken the hefty down payment I had and bought a better truck with cash. No stress over monthly payments. No getting behind on two months of payments, no repos. I could have owned the truck outright, probably had a more reliable truck, and still be in business. Taking the knowledge I've gained, I'd have bought a much cheaper truck from Iron Planet auctions, or something similar. Owning the truck is the key to success, in my opinion. Having monthly payments, on top of all the rest of the learning curve and troubles you will face, is not a way to start on the right foot in trucking.

I offer this story of my failure not for pity, I don't deserve it. I offer it as an object lesson to those of you doing research on starting your own company. Don't over purchase. Stay with what you can afford to own outright and upgrade down the road after you've become a successful o/o. I hope this serves as a cautionary tale for someone else. Now, it's time to go store all my trucking gear, tarps, chains, binders, etc., sell the house and plot my return to trucking.
Click to expand...

I'm thinking of pulling the trigger to go on my own right now. I had money put away to cover me and two out of three trucks are paid for. I have people skills and some knowledge of dealing with brokers, agents and chasing your own loads. My concern is more on the getting paid? I have a company that is offering factoring for .5% of a minimum of 20-25K per month. Is that possible? I want to get back into flatbed work but I'm thinking maybe starting with a box might work out better for now? I can cover my fuel cost for a couple months, insurances, etc. but then I might sweat a little.

mjg4015, Feb 3, 2017

#40

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