New o/o running a company, pay questions??

Ok, first thing you have to learn is don’t listen to anything the A.T.A or the Megas say. It’s BS. I pay my guys 30% of revenue. 35% if they come up with the load, and I’ll kick them 3% of partials. They do find some, I don’t have to come up with all of it. But you have to consistently come up with good freight. Read that as load board cheap rate #### is not going to do it if that’s what you have in mind. 30% of #### all is…? Drivers won’t stick long. Especially the kind you need. You might want to find some guidance. There’s an awful lot of really expensive lessons to be learned in this racket. It sounds to me like you’re fixing to go out and face plant in most of them. For as long as I can remember I’ve heard “if you want to make a small fortune trucking, start with a big one”. In all too many cases that’s true. Honestly, I don’t want to discourage you, but I don’t want you to be the next one to leave the industry pissed off, frustrated and in debt either. Maybe you should hire a dispatcher first, someone who knows their way around the industry already and knows where to find freight that some bottom feeding pos load broker hasn’t already peeled YOUR profit margin out of. You’ll have to pay them good money too, but it’s worth it. You’d make some money and learn that way.

 

$1500 on w2? Your pay is ok maybe for Texas I just don’t know. In my parts of the world it’s considered low believe or not. But, if they get home some nights and you just run intrastate then I suppose may not be too bad.

I wouldn’t pay percent but that’s just me.

How many drivers do you have? Are they not happy? Can’t attract additional ones? It’s extremely hard to increase your driver count, get used to that. Keep in mind that certain drivers will never be happy, it’s just how some people are. Try and have people with good attitudes if you can, makes a big difference and one bad apple can spoil the whole group.

This stuff isn’t easy and no perfect answers.

 

Sounds to me like your complaining about paying your drivers $1500 a week as being "new to the business" you quickly found out that after everything is said and done, not much is left over.

IMO this is why its important to have experience in this business instead of just jumping in clueless.

My guess would be that your drivers are paid on 1099?

 

There’s another one you need to avoid. Factors. For a couple of reasons. Yes it works. Trust me, I know what it’s like trying to operate with an idea and no money and no credit. For a start up, any start up, the first 5 years can be challenging. Most small businesses fail in the first two years. In this business it can happen in a couple of months because the numbers involved are huge. The root cause of the failures in most cases was an undercapitalized start up. That holds true for any type of business not just trucking. This business it just gets amplified. You’re in an industry where operational costs are staggering, margins are pretty thin on a good day, you’re working today and getting paid somewhere between 30 days and the next coming of Christ, and you have no money and no credit. What could go wrong? Everybody deals with it at some point. It’s how you do it that’s critical. I had a lot more knowledge when I started than you do, I can tell that from here, and I had help. Due to having 2 previous generations in the business I had a whole list of people, both customers and suppliers to deal with that wouldn’t hurt me. I knew where to find freight that I got paid for, and I had suppliers that worked with me. I established company credit with credit history from supplier accounts. I still couldn’t pay myself until the 3rd quarter of year 2. I wasn’t broke, but I didn’t have a lot of money and I was growing. It was tight. I would not expose myself personally, you know, personally secure the company’s debts. To be 100% honest, I grew pot for a couple of years to subsidize my start up. Alternative financing is where you find it. I’ve never signed a personal property security arrangement. Lots of people do that to secure credit for their company, and then they have no protection. They're personally responsible for the company’s debts. And if it goes bad, they’re paying. My company’s debt is the companies, not mine. I didn’t apply for any credit until the bank would lend to the company on its own merits. That took just under 5 yrs. If I was throwing percentage points at every point on the compass, load brokers, factors, shady private lenders and the like I never would have made it. Factors can be a bigger risk than the points. Think about this, what are the chances that your factor knows a few people that have trucks, more of them than you have, that they make more money off of than you, and one of them is up against it and a little short on revenue. Your factor knows who your customers are and what you’re charging them. That information may make it across the table over a bunch of free booze at the nudie bar. Don’t think it doesn’t happen. If you’re going to throw points away, offer it to your customer for short payment terms. That’s safe. Something else that will help is an attitude. I would burn my truck where it sits and fly my driver home before I’ll haul for a load broker. I keep 7 trucks busy and I don’t use Loadlink or any other pimps. I don’t even own a laptop ffs. There’s not really any way around hauling third party freight anymore. But you can choose who you haul it for. Start with people who have trucks in their yard. They have an interest in the business beyond how much money they can suck out of it with next to no costs or risk. The difference in rate between what a pimp offers you and what another carrier would is pretty realistically 20%, or more. The carrier only wants to move something they can’t for a customer for one reason or other in the interest of protecting their relationship with their customer and their reputation. And beyond that he may need to get a load from you next time. They’re not looking at a BMW brochure while they’ve got you on the phone. Those are the relationships to build. If you only go by load boards and pimps you don’t even know what the rates really are to start with. How do you set YOUR rates? I know where you’re getting your info from. Here’s a hint. I charge $2.50/mi to run a truck up the road empty to go get something. What do you think I bill for a loaded one? It’s not $3/mi I can tell you that. A light base load and a little LTL on top and I hit $6-$7/mi pretty easy. I’d leave it against the fence if $3/mi is all that was on the table. Trips under 500mi are your best payers, but there’s risk in it too. You have to have the ability to turn those trucks quick and get them home loaded, or you’re back to running for empty rate. Or you can lose in time spent hunting a load. Empty miles or lost time is no benefit to you. I’ll suggest hiring again. You’ll have to give up salary and points for the guy/girl you need. But that guy/girl comes armed with a lot of knowledge, and freight. Right now you’re running loaded trucks up the road for .50cpm more than I get for an empty one, with a hired driver in it, and throwing more points away after that. Honestly, how long do you think that can go on for? That’s a recipe for disaster. I’m going back to the dispatcher. A lot of dispatchers are freight brokers in function, they maybe just have too much conscience to work for a brokerage, or enough confidence in their own abilities to make themselves some money. They know who the people are, where the freight is, and how to run trucks. You’ll find them in trucking company offices toiling away for salary and points keeping trucks moving. One of those guys/girls is going to cost you $1200-1500/wk in salary and 3-5% on sourced freight, at least. A good LTL dispatcher is worth more than that. Pick the right one and your biggest problem may be how to lay your hands on more trucks. It’s a complicated business and it’s full of bottom feeders and and thieves. You have to have enough knowledge and experience to be able to identify those people or you can get in trouble fast. Loads you haul bleeding points out of are little better than one you don’t get paid for. Trying to feel your way through it can end with you still paying off debt years after you left the industry. That’s what I wouldn’t want to see. I’d rather have you on the phone sometime in the future seeing if you can cover a truck for me, or the other way around. Best of luck man, just be careful.

 

Find one yourself. Easiest way is hunt one down and talk to them. You must know at least a couple of them at this point. They know who each other are. They talk on the phone almost every day. That’s how I’d do it. You talk to one, you have access to many more. They know who is and isn’t happy where they are, who might be looking to make a move of their own. Who knows, you might pick one that’s straight salary now with an employer that won’t move on their compensation, but knows enough to want to get into the game a bit more for themselves. That person would view what you have to offer as an opportunity. You can come up with a lot of stuff for the cost of a couple hours and a few beers. This business runs on those relationships. It’s all about relationships, the trick is to establish one’s that are mutually beneficial. You’re not paranoid, you are in fact surrounded by people looking to take advantage of you. But there are good people amongst them. I have customers and other carriers I’ve been dealing with for over 40 years now. Last year I think I only invoiced maybe a half dozen people I didn’t know already. You’ll get there. Talk to other small fleet operators, that’s an option too. Maybe the guy you talk to hired a dispatcher his fleet can’t keep up with but for any number of reasons can’t just pull the trigger on more trucks. You walking in with a couple of trucks might just be enough to get him over. You both benefit. He expands without a huge outlay, and you run your show under his dispatch while you get your feet under you, and develop even more relationships as you go. You and that guy could end up kicking freight and trucks back and forth between you for the rest of your lives. That’s how this all works, its a people business. It starts with your customers commitment to their customer. They give you a load based on the fact that you will honour the commitments they made. It’s their reputation at risk on your word, and your reputation is based on making it happen, consistently. There’s a lot of trust involved. It’s the same as when I put drivers out on the road, no matter what they do, good or bad, it’s still my name on the door. And that’s the one people are going to remember. If your actions reflect poorly on my name and reputation it’s not going to be pleasant when you get back to the yard. Trust me. I worked hard a long time to build that reputation, and I work every day to maintain it. That’s the same way a shipper or another carrier views it when a load goes sideways. You promised, and I looked like the #######. That doesn’t make for happy chats, and may even result in unanswered phone calls and an account at 120 days. Start with all the dispatchers you know and talk to them. That would be a good start, along with looking for guys with a few trucks in their yard and talk to them too. No matter where you want to go, there are many roads. Some just have more potholes than others. A big part of it is getting out there and introducing yourself to the industry and talk to people. Once you get to know a few of the players things get a lot easier.

 

That’s your girl right there. Pitch to that one, if she isn’t interested herself for whatever reason, she knows someone who would be. I’d bet dollars to donuts on that. It might be an uncomfortable conversation when you get to the point. Keep in mind, working for a brokerage she may be buried in non-disclosure agreements. I’d almost guarantee it. If she seems reluctant to talk that may be why, don’t take it personal. She may have to respectfully decline, but hand you a name and a phone number on her way out. That’s a good one to investigate.