To the best of my knowledge the information in this post are factual and it is meant to help those that don't know, the rest is pure humor and I hope that it's taken that way.
You might want to join OOIDA. They will be a lot of help for a new business owner. Go here: OWNER-OPERATOR INDEPENDENT DRIVERS ASSOCIATION - REPRESENTING TRUCKERS The membership fee is tax deductible.
First, Make sure you have enough money, actual cash in the bank. NOT credit cards to cover ALL your expenses including the truck/trailer payments, repairs, maintenance, insurance, fuel and all the expenses at home for 3-6 months, including health insurance unless you wife/ husband has a job that you are covered under. If you don't have this money in place then stop because you are not going to succeed.
Note: I highly recommend becoming incorporated to protect your assets in case of an accident insurance has its limits and once that's gone they look at the owner to pay anything above that. An S corp. or LLC are my choices there. The states of DE or NV are my choices because they have the best laws to protect companies. This cost about $500.00 depending on who does it. I had a firm do ours that is also an attorney; they also act as our agent.
Decide what name your company is going to have and do a search on your state registrar's website to see if some one else has it registered. See link below
You'll need a W-9 and an EIN number from the IRS see link below.
Next you need a DOT number, it doesn't' cost anything you get that here:
You'll need to print out the form when it prompts you to. This is also where you update your MCS150 each year or anytime you add or change anything during the year.
You will also need to decide if you are going to be interstate or intrastate or both at this time. Interstate means you load in one state and deliver into another state, always crossing state lines. Intrastate means you load and unload strictly in one state and never cross state lines, normally your home state.
You'll have to have a single state registration. Here in AL it's about $330.00. This was supposed to be changed to the Unified Carrier Registration on Jan 1, 2007 but has been delayed due to the board being unable to get the rules and regulations ready by then. Check here for updates UCR
Motor carriers operating in interstate commerce (for hire) are required to register their interstate operating authority with a participating state. The carrier must select as its base state the state in which it maintains its principal place of business, if that state is a participating state. A carrier that maintains its principal place of business outside of a participating state must select the state in which it will operate the largest number of vehicles during the next registration year. After receiving interstate authority from the Federal Motor Carrier Safety Administration and before commencing operations, the carrier selects and contacts the participating state to register its authority for all states of travel. The carrier's initial registration must include:
A completed application (RS-1 and RS-2 forms), guaranteed funds equal to the fees levied by each state of travel for the number of vehicles traveling in those states
A copy of its interstate authority issued by FMCSA
Proof of public liability insurance (BMC 91 or BMC 91X) or surety bond (BMC 91MX)
Designation of process agents for service of process in all states in which the carrier will operate (BOC-3).
Then you need to get insurance before you go any farther than the DOT number, most states now require you to have one in order to get a tag. You will need at least 10% down payment on the insurance. The cost of that depends on what coverage you have to have on the truck to satisfy the lien holders if any or to repair them should they be damaged or stolen. The age of the truck and trailer, Do not over insure the equipment as the insurance company doesn't care if you just painted it or dropped a new engine in it market value is all they will pay in most cases What you are going to haul, trailer type, what states you are going to operate in, what's on your driving record will all factor into what the insurance cost. You will need the following coverage:
Auto Liability: which covers the truck anything you damage in an accident $1, 000,000 the minimum is $750,000 with DOT.
Cargo $100,000 covers cargo. You have to have those in order to get your MC number. Some shippers require you to carry a General Liability policy of 1,000.000 which covers what the Auto Liability doesn't. Example: the truck is parked and some one climbs on it or the trailer NOT loading or unloading and they fall, it covers in those cases You can get what they call a umbrella policy which covers what ever the other insurance policies do not, they are very expensive. In some states you will have to have Workman's Comp, more and more shippers are requiring it. It's not cheap. There is another insurance which here in AL is called accidental injury insurance, it doesn't just cover getting hurt on the truck covers anywhere. It's worth the money, so check on that with your agent that writes the policy for the truck.
You cannot get an MC number with out insurance. MC and DOT numbers are totally different. Your insurance agent will file the MSC 90 form with DOT which is stating that there is blanket coverage on all the vehicles operated under your authority.
You will have to pay at your local tag office property tax for your county, depending on the age, weight perhaps some states the value of the truck; each state is a little bit different.
Then you have to go to the IRS and pay $550.00 heavy highway use tax Form 2290, everyone pays that every year. Then you are ready to go to the IFTA/IRP office in your state to get your tag and set up your IFTA account. You will have to decide what states you are going to run in, the 1st year you do estimated mileage. After that you do actual mileage, which you should be keeping up with anyway.
Some states like KS, NY, NM, and KY to name a few you will have to get registration numbers or file property taxes. See the links to each at the end of this post.
Decide how you are going to pay for fuel. We use EFS, all the fees are tax deductible as are any membership fees you pay such as OOIDA. We like EFS because they have a free program that does our fuel taxes, you can access it anywhere that you have the Internet. Stay on top of the fuel taxes! Those must be filed and paid quarterly! Using a credit card is your choice but I wouldn't except for repairs, although you can set up your EFS account for that as well.
Now you and your family need to decide if your family is going to help you or you are on your own. They might not want to get involved. If you are on your own then you'll have to devise a way to get loads and do all the billing, collections, taxes etc yourself. It's better to have some one that can help you.
You need to have some customers, which will be your company's life blood. Be sure to run credit reports on them. Just because they are a business that doesn't mean they pay the bills on time. I prefer to have a contract with them outling payment terms, and detention to name a few.
You can exist working solely with brokers, but remember you are supporting them as well. Also since they only have $10,000 bond to file against if they don't pay you chances are that you won't get paid unless you are one of the first ones to file against the bond. Never work with a broker that doesn't have a bond. When in doubt call the brokers bonding company. Most brokers only pay 30 days after they have received your invoice and POD so that runs into 45 days or more in most cases. Some of them offer "Quick Pay" for a fee. There are factoring companies out there but I don't recommend using them but that's your choice.
Next you need to have a safety program, a drug testing program in place. Owner Operators have to go by the same rules and regulations that all companies do as well as the regulations pertaining to drivers. This means that you have to fill out an employment application just like a driver, and have a current DOT physical. Look in the phone book for a company that does drug testing or talk to your family Doctor they might be able to point you in the right direction.
Now all that's done you need to set up the books, and keep track of everything and file your quarterly estimated tax returns.
So in summation here's how it works
Get your DOT number, free, get the insurance lined up between $9,000-12,000.00 and paid, get your MC number $300.00 this takes from a week to a month depending on how busy they are and how you do it. Get your single state registration. Pay the property tax in your county, and then pay the IRS form 2290 tax, $550.00 at the IRS. Get your EIN from the IRS. Go to your IRP/IFTA office, set up both the IFC and IRP account, and pay for the tag between $1200.00 and 2,000.00 depending on the states you will operate in. Contact the states in the links below to see what you need to do with each one and pay their fees.
I'm sure I missed some things but this is the best that I can do.
Now on the other hand say you get all that done and survived. Your family hasn't disowned you, moved away while you were gone. Whew that last phone call to home had you wondering. You've finally managed to get home without skid marks on your underwear when there was no tissue in the bathroom, because you used your underwear to handle that problem. Then what time you have left because you now "own" the company is spent fielding the telephone calls from irate four wheelers that "your dangerous driver" caused some silly offense to, catching up on all the regulations that changed when you weren't looking ,doing all the various state's paperwork, pay all the bills, invoicing out/mailing all the billing, the collections, the repairs on the truck and trailer as well as your chores around the house you might have a couple of hours to spend with your family, keeping in mind that shippers and brokers have no respect for family time and your cell phone will ring until you throw it in the garbage. That is if you were crazy enough to give that to them and leave it turned on. Congratulations! You are now the owner of your own trucking company!
Until next time, Happy Trails
So you want to "own " your own company
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Stay away from Marten.They will run your *** off for little money.Getting home is also a pain.You must give them a 2 week notice of when you want to be home and they must check to see if they can approve it.Even though it is your own truck.I rode it out for a year till my plate was up and left.
Bought a Step Deck and Leased on with Mercer Transportation out of Louisville Ky.
Alot less miles and alot more money and home when ever I want for as long as I want.
After hauling flatbed as an owner op, I can't even begin to imagine how you guys make it hauling reefer or van. We've been looking at companies to lease on to as well, and are amazed that companies are offering $1.00 a mile to an owner op and are proud of it! Granted it's usually $1.00 a mile all miles, but hauling flatbed we average closer to $1.75 a mile all miles - and for the SAME miles!!!
There's a lot of other factors, I know...like FSC (fuel surcharge), fuel discounts, maintenance discounts, etc...but when you look at the numbers at the end of the year, what does your net really come down to?? It still has to be less than $1.00 a mile...
Not to mention the POTENTIAL to make MORE. If you're leased on to a company that pays $1.00 a mile all miles...that's it...you know that you have to run 2500 miles to make $2500.00 period...there's no cutting corners...but with a flat, you can make $2500 easily by running 1000 miles...up to $5000 for that same 1000 miles hauling LTL's. Then when you look at the numbers, you're not only spending less on fuel, but your giving yourself a chance to grab another 1500 mile trip while the van or reefer guy is still hauling the same load for that original $2500.00 - how do you guys do it????
Sorry...the main reason I posted this is because I was curious about Mercer - we've been looking at Landstar, but haven't really heard much about Mercer - do they run the same way (you find your own loads, etc)
Jancee Trucking - Greene, NY
bravo i was afriad ppl would hate me for not sugarcoating the o/o side. It's good to find a like mind. you gave accurate information and anestnaitzed the sting with humor.Obvious you're the real deal.
Wannabes take advantage of nightwind's knowledge. You won't find that everyday. ThanksHorselovers Thanks this.
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