Owner Operator Preperation

Also are you prepared for the issue I'm dealing with right now.
I got a transmission that either will be an easy so to speak fix or I will be dropping in a rebuilt unit. So looking at worst case deal.
That will be close to 8 grand for this repair. That includes motel and rental car. Plus new clutch while it's out..
Then on top of that, I had to give up the load I'm under, So I doubt I will make any money off this ld.
So the last check I got was the week of Christmas and do not know when the next check will be as I'm broke down and no money coming.
Now it's the first of the month and those pesky monthly bills still need to be paid..
Also I do not own a credit card any more at this present time.
So I just can't charge it and wonder how will I pay off the credit card bill.
Yes I have the funds to cover this, but alot of people just jump into a trk. thinking I'm going to make the big bucks and spend their money like a drunken sailor on shore leave..
Then when they need to fix the truck or even trailer they don't have the money..
Plus I still got 4 tag axle tires that I need to replace soon as they are getting wore down..
A deal like this can and will bankrupt people who do not plan ahead

 

Its the guys that take a loan out for a Brand NEW truck that puzzles me.........
A 'loan' for a truck.Thats $150k for a 6-7 year term @$2400 a month, PLUS Your phydamage triples in price

A used truck is a winner most of the time......Many variables to discuss, but as for the poster passingthru69, An $8k trans and clutch, No big Deal, It hurts at first...But you'll have that behind you in a few months....Come april, That debt is paid (Or it better be).....

Even If you wanna throw a crate motor in WITH a New paint job 35k Buys Both.( if shopping around )and that should be paid off within 6-9 months if your working your business good and smart.

Its the guys spending $150,000 dollars (or actually getting a loan) AND spending fixed costs on top of variable costs to operate...And Remember, Just cause you have a new truck..your tires and Brakes are NOT coveredunder warranty.(Biggest expense) So in a broad perspective.......If you want a FAT bank account over time, Keep your truck,buy used and Create your wealth accordingly

 

Q1 - Months of research. I mean MONTHS.
Q2 - Yes, about $250,000 - in the form of debt reduction (paid off EVERYTHING)
Q3 - $6,400
Q4 - $6,000, before taxes.
Q5 - Yes.
Q6 - Yes, barely. But I/we left a high paying job, so replacing $185k gross as company team was a stretch for a solo owner operator leased to a company with a cash truck and financed trailer.

 

When we started, we got lucky by signing with a small family owner op company. We get treated like family, and in my opinion, more benefits. Sometimes those bigger companies get costly in their lease programs. Depending on what the company is charging changes how much you need to make. Insurance, percentage, tolls, who is responsible?

 

Sounds to me that you are working at Schneider and are thinking about the Choice program. Schneider makes it look easy and that you'll have nothing but $$$ rolling in every day. I can tell you, it's hard work being successful on the choice program.

Every time someone has asked me the same questions you have posted on here, I always ask them this, "Have you ever run a profitable business before?" It amazes me the number of people that have never run a profitable business before and want to jump into a business that has some of the highest up front costs and day to day expenses in any industry. I mean think about it, you could for the same price of a tractor purchase a subway franchise or a minute man printing press franchise and still have money leftover. Those businesses are almost turn key and can be more profitable then a single truck operation, plus you would be home every night in your own bed.

Now you want to get into a business that is mobile, high risk and very costly. This is a business and therefore needs to be treated as such. That means the business gets paid first before anything else, otherwise you go broke. Second, you'll need to set money aside for all taxes. Third you need to put money away from regular maintenance like oil changes, washer fluid, brakes, coolant, wipers, new tires. Fourth, you need to put money away from emergencies, like 3 flat tires or new windshield because of a rock or bird hit it. Fifth, put money away for the times of year when freight is slow or you take a week or two off, you'll need to cover all the fixed costs since you are leasing that truck and that means a weekly lease payment, permits, plates, insurance. Finally after all that has been done, you get to take what's left over home to pay your personal bills.

So to answer some of your questions, you need to save up a good size emergency fund to cover your personal expenses and some of the mid to minor emergencies you might face out on the road. While you are saving up the money for that, start reading books on how to be an entrepreneur and small business owner. I am not talking about books on operating a trucking company, but the basics of running a business, how to read the numbers, profit and loss statements, basic accounting principles. These are the tools you'll need to be successful in any business you start. They'll also help you understand the numbers to determine if a business is right for you. The first few books I would recommend you to read would be: The Lean Startup by Eric Ries, Entreleadership by Dave Ramsey, Total Money Makeover by Dave Ramsey, Start with Why by Chris Guillebeau, Street Smarts by Bo Burlingham & Norm Brodsky, and if you have a family, wife, husband, or a special someone in your life read Startup Life: Surviving and Thriving in a Relationship with an Entrepreneur by Amy Batchelor & Brad Feld. Also, any written by Zig Ziglar on business, motivation and success is good as well.

Yep this is the stuff most people on here don't want to talk about when they answer your questions. They just say save money, work hard, this is a business, and good luck. By the time you read through a couple of small business books and understand the basics of accounting, and know the meaning of revenue - expenses = profits and what a profit and loss statement means, you'll be ready to make an informed decision on if you can running a profitable trucking business and if you want to run one.

Schneider doesn't help you be profitable. If you follow what they tell you in orientation on the way they recommend you run your business, you won't be that much more profitable than a company driver. And remember that $600-700 a week as a company driver you take home now is after taxes and medical benefits. As an IC on the choice program, you have to pay for all of that out of your own pocket. A medical plan as single driver similar to what Schneider offers the company driver would cost you $300-400 a month, $3600-4800 a year.

Good luck!

 

MsJ,
Almost every week someone asks the same questions you have, and almost every week people jump on the thread with well meaning advice. As good intentioned as the replies are, they all seem to miss the point. Your questions tell me the following:
You have 6 months experience, not nearly enough. If you think you have BS with the company now, it will be nothing compared to what will be thrown at you as a lease operator. Your payments will be due every month, even when THEY don't give you enough miles to do that. It's not like you can grab loads like a real owner operator, who owns his truck and has his own authority to book loads. Most likely you can only haul freight that comes from the company you have leased a truck with.

Lease Operators are NOT owner operators! They're actually truck recyclers, given an older truck, that may have already been leased to 5 or 10 other drivers (with 300 to 500,000 miles) just like you, who couldn't make any money, and had to turn the truck in, or worse have it repossessed. If leasing were profitable to the driver, no company would lease out their equipment, they'd keep them rolling with "drivers", and the company would be pocketing the money. Truth is you're taking a probable problem truck off their hands, and you're assuming all maintenance and operating costs. Great deal for them! Usually not a good deal for the driver who gets sucked into this hamster wheel. Find out how many folks have made it to the end of a lease, with any kind of real equity left in the truck. AND don't consider what the company says about this as TRUTH, cause it ain't. Some folks who work hard, can make a good living as a company DRIVER. BS is everywhere, learn to deal with it, this is no part of trucking that is immune to it! Promise.
Good luck

 

My opinion is that you should buy a old truck for 12-15k and work for a smaller company who will know you by name and will make sure you keep running until you need a break. My recommendation on a truck is 99-05 international 9200-9400 with a cat, the one in my fleet is a 05 and has the least amount of problems so far plus they just look different in a good way haha. Good luck.

 

If you are looking to walk away with 700 check per week I am assuming than I would suggest you find a job in the area where u will be home daily and with family not driving a truck. Your goal for weekly pay should be 2k+ if you are already busting ur ### driving a truck and staying away from family for a long periods of time. Find a company that pays a percentage while driving a company truck and you will have the least amount of a headache and make good money depending on their pay plan.

 

When you lease under someone else's authority, leasing one of their trucks, you are not an owner operator. You're a lease operator. There's a huge difference. Then again, maybe you already know that

 

Lease operator is NOT owner operator. You'll make company money while starving yourself and trying to stay above water, once you fail-they'll find next sucker to become "owner operator" wanna be-Lease operator.
Stay a company driver for a year or more, save up your money and buy yourself a truck from retiring owner operator (they keep their trucks well maintained vs company trucks)
You have to make sacrifices today for a better future tomorrow. Being lease operator is not a good choice, its designed for suckers.