Number one cause

Are we talking Lease (Purchase) Operators, or real Owner Ops?

If you are talking lease ops, well it's because 99.9% of lease ops are a scam to get the employee to foot the cost and downsides of owning a truck while still getting treated like an employee.

If you are talking about a true O/O who buys a truck and leases on to someone else's authority... Well I'll let the O/O's answer that as I have my suspicions, but as I'm not an O/O it's 100% speculation.

 

"Hi. I am brand new here. Been researching and I have decided that I want to get my CDL and buy a truck. That way, I wont have to do the who mega training fiasco. What do you think about my plan?"

Everyone sees the driving portion. "Hey! I can do that! He's just sitting there holding a steering wheel! I'm a fat loser, so trucking may be perfect for me!"

Why do you want to be an owner operator?

"So I do not have to ride in a trainer's truck. And I can make the big bucks!"

So, you want to go all in on something you know nothing about...

"Well, ummm...yeah...it's JUST driving. I drove to Grandma's house for Christmas and I enjoyed it. A whopping 250 mile trip!"

Sounds like a plan.


Why do many owner operators fail? Because they have no idea how to operate a business. They're in it just long enough to keep freight rates low.

 

It can be good or bad. But normally bad.

The OO thing. Lease on with your own truck. It's luck and discipline. Does your truck not cost anything crazy in the first 4 months, so you can save. Discipline I have seen a lot of operators spend all there money and save nothing. A transmission goes at 6k and then he has nothing. He dances trying to keep the truck , begging for money. I keep 20k on hand. That still won't rebuild the engine.

 

An employee cannot be on 1099 legally. If a company tries to pay you on a 1099, and you have no stake in the company or running your own equipment, or dispatching yourself, then you are paid illegally.
If the very first thing they do is try to avoid paying taxes, one has to wonder what else they are trying to avoid paying for. Required insurance? Inspections? Registration? Paperwork? Maintenance? Even "employee" paychecks.
And if you get hurt, no workman's comp. If they don't pay you, no labor board help as you were a business 2 business contract, etc....

 

One major reason is inadequate research and due diligence into the project.

 

It what sense? How much money goes in vs how much money goes out. You have to know your monthly nut is. How much you need to clear per month. What you next likely repairs are. That all makes sense. But guys will clear 3k after fuel, insurance, but not after payment. Then they buy a frocking BMW when they dont have the title to the truck. The truck is your mistress. What about down time for a big repair? Do you have 2 months of living exspenses savef. If the engine needs a rebuild do you have 30k of credit card space to use. A home equity loan so you don't touch your 20k cash. Save money for taxes too.

 

Every penny of income goes into the bank. Only thing you spend is on necessary items: bills, food, fuel and truck parts. All the rest gets saved. Be diligent. The amount coming in needs to be A LOT more than the amount going out. Tax time comes, or a major breakdown, you’ll be glad you did this.

There needs to be enough money in the bank that when she needs tires, or an inframe, you don’t even have to think about it. Get it done RIGHT NOW, and get back to truckin ASAP.

Sitting and losing loads is the worst thing you can do. I’m not saying don’t take time off. We all need time off occasionally. But when it’s time to run, she needs to be up to the task.

People argue about this a lot on here, but you need to decide if you’re gonna run older equipment or new. And if you’re gonna do your own wrenching or pay for every little thing to be done by a “technician”. I’ve always been of a mind that doing my own work and running older, simpler-to-fix equipment with little or no payment is the best bet.

I’d say the main cause of failure is not being diligent with the money and/or not working enough to keep up with the bills.