Question about investors in the trucking business

Discussion in 'Questions From New Drivers' started by Trucker.1986, May 22, 2024.

  1. Ridgeline

    Ridgeline Road Train Member

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    You called?

    You know China, he isn't going to like my answers. I just went through this exercize with someone who took up four hours asking me if I would like to invest in his trucking company - At least I got a good dinner at Black Rock out of it.

    Why?
    I don't know, how does it work?

    Not to be an ****** about it, but this is something that is between you and your "freind".

    If you are looking for advice, that's one thing but you are leaving a lot of unanswered questions.

    Don't know, you have to explain what you mean by all of this "start up".

    Are you going to get a few trucks, buy an existing authority which has a good track record or what?

    Specifics are important.

    Location, what kind of trucks, what is your focus for freight, what are your sources for work, how willing are you to walk away from all of it, what liabilities are you willing to risk (this isn't a "get an llc and protect your assets industry"), finance the trucks, and so on. Maybe 100 questions need to be answered.

    Another and more important question is how much money is he willing to invest?

    $500k?

    $1.0m?

    I would think the minimal entry point for a good well funded and well planned trucking company would be between $600k and $750k.
    Going to tell you right off, that's bs. Either he is in at the beginning or not at all.
    So you going to drive, take care of the back office and so on with no experience at all?

    Pretty time consuming thing to do.
    Why not? He is going to invest in a high risk venture, he needs to be there at the beginning and take the same risk as you do, otherwise it is not an investment.
    I don't know, how does it work?

    This is between you two and no one else.

    I don't have investors in my business, I never did and there is a reason for this, they are not willing to take a risk of having a 10% chance in a business to survive its first year, this means 90% of all ventures in this industry FAIL.
    So you have ZERO experience in the trucking industry. Box trucks unless it is a niche market OTR thing, is just P&D junk work, almost the same as hotshot work (no offense HS people).
    You have no clue how bad it is if you are trying something new.
    Well sell it and focus on the trucking business, you can't do both.
    How?
    Contract? Seriously there is no contract, there is an agreement and a partnership or stock holdings. You will need lawyers involved and possibly one that can maneuver around SEC regulations, seeing this is an passive investment for the other party.
    Here we go with this aging crap, you need to step into it, promote your services and move on freight because it sounds like you are going to be dependent on load boards and brokers.

    Lifestyle?

    Seriously this is not something that you can be an arm chair owner and make the big bucks.
    Not realisitic.
    SO then forget this idea and expand your other business.
    Is he a freind or an investor?

    Is he a accredited investors?

    If so then you need to get a lawyer involved.

    If he is a passive investor, then he will have to be willing to take a 100% loss on this venture.
    Then don't do it. You never learned the number one rule in business - never go into business with a friend or a relative. Most of the time it ends up being a mess and you lose that person.

    This alone tells me you are clueless to everything about this industry. I would recommend that you get your CDL with your hazmat endorsement, work for a company for at least 5 years and then rethink all of it.

    It is a hell of a lot different.

    OK this last quote seems to show you have your mind made up I see, don't take the advice of others who know what they are talking about.
     
    Last edited: May 22, 2024
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  3. roundhouse

    roundhouse Road Train Member

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    Have you gotten quotes on the insurance ?
     
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  4. Chinatown

    Chinatown Road Train Member

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    www.OOIDA.com - ?
     
  5. Lazer

    Lazer Road Train Member

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    The ship that almost guarantees to take on water, and sink is a partnership.
     
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  6. Trucker.1986

    Trucker.1986 Bobtail Member

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    May 22, 2024
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    Well said, that answer 90 percent of my questions with minimal belittling. I'd just partake on this on my own at this point. Minimalize the headaches of bringing other on board unless the market improves.
     
  7. Eddiec

    Eddiec Road Train Member

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    On the surface, this has disaster written all over it. But I am going to be positive and suggest that since you seemed determined to go ahead with this plan, then you should at the very least invest in speaking with someone who is trained in answering all of your questions. A Banker or a Lawyer. Surely your friendship ( and business) are worth the cost of a professional consultation.
     
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  8. Dennixx

    Dennixx Road Train Member

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    Is your friend ultra wealthy?

    Then self insure and spend his money like a sailor on shore leave.
    Find a competent accountant and tax/financial expert and start buying equipment.
    Operate at a loss.

    If you need a driver at an outrageously large salary give me a shout.
     
  9. 86scotty

    86scotty Road Train Member

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    You said a few things that caught my attention that will most likely not work out well for you.

    First, you said you'd like to do this so you can take whenever you like off and tend to your other business or whatever else you want to do.

    Insurance is not friendly to this in my experience. You can't add/drop commercial insurance when you want. Just understand you'd probably have to pay full year's insurance on a trucking business that isn't earning all the time. This is a showstopper for most. I'm not sure if you could structure this somehow with your current box truck thing.

    Second, it is wise to get an authority and have some age on it in theory but in reality brokers nowadays want to see regular inspections. That means a truck that's working.

    You're probably going to answer that you'll get your own customers. Not so easy with one or even a couple of trucks that don't run year round. Customers need a truck when they want a truck. That's what sticks most people like me, who also likes to take off whenever I want without responsibilities, working the spot market.

    Without a truck that's available when the customer needs it you won't find customers, and that sticks you working the spot market and hauling crap freight for the TQL's and JBHunts of the world that will crush your soul while paying you half of what you're worth.

    All of my good repeat customers, and I mean ALL of them, have specific needs that occasional trucking doesn't work very well for. You disappear, they find someone who doesn't.

    Nothing I've said is going to change if the market improves.
     
  10. Trucker.1986

    Trucker.1986 Bobtail Member

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    Ultra wealthy I don't know. But he use to run his own business as a IT consultant. He now work for his friend whom inherit a ultra wealthy business and gave him a wealthy salary. His friend would invest as well if he sees progress. On another note his eagerness stems from a past business that I've ran solo and didn't let him in. To be honest I don't want him in lol I've had partners before and each time I had one it never worked. Now if he invested and dosent call no shots and let me lead thats a different story. I would only consider if it I need it. He has business connections that could potentially lead to freight contracts and he is in sales. I sell designer dogs for a living making 30k each litter. So I can more then afford to do this on my own and wing it untill the market comes back. I'm don't plan to make a killing in trucking anytime soon. Even per say like everyone been saying most quit before 12 months crap. It wouldn't hurt me that much to pay 30k insurance for a year for insurance for 12 months and not drive. Then when the market improves and I bring them in. I'd become a fleet and just hire drivers. If it turns out well sure I'd give you a shout. This is a 2 to 3 years project untill when ever the market returns.
     
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  11. 86scotty

    86scotty Road Train Member

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    If you're willing to throw away $30k a year and not be working, in any business, you're not in business. You've got a very expensive hobby and a business attitude that will fail 100% of the time.

    Also, do yourself a favor and stop showing your cards because you're showing your age and your experience at the same time and it isn't helping you.
     
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