New owner operator, Lease or Own authority?

Anyone who tells you you need X amount of dollars , not to get your own authority , blah blah is either outdated , doesn’t want you as competition or is repeating something they heard . Do it for the independence , the money will follow . Get your authority and factor, with a company like DATS., make connections and run the wheels off . Any major exipenses can be covered with credit lines . I was an owner operator for fourteen years and hung it up for personal reasons , grossed over 300k a year with a van severely years , Started with a dollar

I rknew a guy who started with 100k in capital , bought a truck and trailer avd was broke in a year . He wanted to cherry pick his freight , only run the south and spent more time at the house working on his tax plan than earning revenue for the truck. Follow the trend lines and run non directional , follow the money . Ethic will make you famous , not capital .

You can be an owner operator with six days experience never mind six months . Working for someone else for a few more years is just going to teach you how to make someone else money money. Leases are ok if you don’t want to think about your next load or think beyond pulling a wagon . But you’re still giving up some of your money .

 

To get your own authority you need insurance at 6 months it would be a lot of money.

 

When we are talking about having 30k+ saved up, we are talking about starting your own authority. Starting as an owner/lease operator leased onto a company is a different story for the most part. I started with $0 leased onto a company, and they even gave me money for starting the program with them. I believe this is the case for most people, with the exception, perhaps, being Landstar, Mercer, etc.

The plan you are proposing is that of a person with a lack of understanding of personal finances. Books like The Millionaire Next Door & The Total Money Makeover helped me understand personal finances. Generally it is okay to borrow money for large expenses such as a home, but using loans for expenses under 20k (especially for a business owner) is usually a sign of bad financial management.

 

He must have gotten his authority in 1960

 

Disagree . Every major trucking company uses lines of credit to keep cash flow going . Maybe you didn’t get to that chapter . Any major equipment purchase should be financed and written off . I’d advise he finance most of the truck and trailer and keep most of the cash . You can’t grow a one man business into a fleet without lines of credit and equipment financing unless you plan on buying junk and crossing your fingers

 

I really have no idea why you think anyone needs 30 k 60 k whatever k. I made a success of it , as well as many of my friends who are still in business ,, some of whom manage small fleets of 20 or more units . If you have the cash you should be able to get plenty of credit lines that spread the pain of repair , illness , downtime , slow freight cycles . Burn your cash and you’re done . As far as the other post asking how he put fuel in his tanks , you can factor loads for cash flow , open up a fuel account ,, use credit cards , advance on loads . I don’t believe half these posts are from real owner operators

 

To the guy earlier who asked me how I buy my fuel I use Loves fuel card and I have over $20,000 in line of credits to help with repairs so I keep most of my cash flow... like I said earlier I used $10,000 to get me started with truck, trailer, and all the documents/filings...

 

So simple

 

Says the guy not even in business anymore.

The original poster didn’t mention anything like his credit. Besides going into too much debt and also using factoring is risky and can lead to failure. We are trying to help him manage his risk to keep from failing. Your thoughts throughout this thread have many valid points from a mindset perspective. But are also risky from a financial perspective.

As far as not actually owning any trucks. I have 8 trucks, 1 owner op, 3 people in my office running day to day, a yard with a warehouse, 100k line of credit with zero balance, and have been in business for 11 yrs. Pretty sure I’m qualified to comment. I’ve grown much slower then some, but here I am still standing with great financials while I’ve seen so many others blow up overnight and gone within 2 yrs.

Not all companies rely on large amounts of debt and credit. Many who do eventually go under. Many who don’t eventually get bought by larger companies and retire to the beach.

Don’t be so quick to discount others opinions because there is not just 1 way to do this. Besides most of us are talking about him getting his authority. Not leasing on.

Edit: oh yeah and I don’t factor either. Shame on me!

 

Major companies using lines of credit? You mean investors? As I said before:

“Generally it is okay to borrow money for large expenses such as a home, but using loans for expenses under 20k (especially for a business owner) is usually a sign of bad financial management.”