So you want to "own " your own company

i already have my own authority im just driving for a crappy company and want to go out on my own...what is wrong with power loads?

 

Nothing wrong with power only, it's just if you have your own trailer, you have far more options. I've had a trailer and now I'm doing power only. I enjoy both actually!

 

It is much more difficult to successfully run your own authority unless you also have a your own trailer. You could do power only with someone such as JB Hunt or PTL. Both have power only for those who have their authority. But, your options will be limited to those types of carriers. If you plan on running your authority you should also plan on buying a trailer.

 

Nothing. Just seems to be reversing the process. What if power only was the biggest scam in the industry? You are asking questions that should have been asked and answered during business planning process.

 

Whew...

Took awhile to get through all 150 pages (ok, so I didn't really read them all).

I'm another one of those crazy folk that are looking to get into this game with my own truck.

Slightly different plan though...

I'm looking to purchase a later model unit (08-10 VN780/Cummins), all cash (no truck payment to worry about), and lease on with a friend (ok, not a friend, but my old CDL school instructor) to pull reefer for him.

I already have a business that I'm burnt out on - but still pays as good as a "starting out company driver" - even in a bad year. Going out 3-4 weeks and back in a week - would allow me to maintain my one contract support client (computers - YECH), while still getting an idea of which way I want to go (if any) in transportation.

According to my accountant (and lifelong friend) the worst case scenario would be (worst case = if I end up hating trucking) to sell the truck, take the time/mileage depreciation hit of having it for a year, write off my loss and move on.

The logic here (of theres ANY LOGIC in even considering a move like this - LOL) is:

Getting in all cash for equipment = no truck payment - no "having a slow week/month" & worrying about losing the investment or dodging the repo-man.

Later model truck (as in - still under warranty) gets me a truck with some "maintenance recourse", and the ability to purchase extended warranties on "extinction level events" to the truck while I build the maintenance account up.

"Leasing on" gives me the opportunity to stay local (fort lauderdale), without the hassle of recording keeping, maintaining insurance (other than bobtail), going through the FMCSA regulatory hassles (audits, etc.) and just makes me responsible for driving, and maintaining my truck. Though I've been running my own business, keeping records for tax purposes, etc. for many years - so IFTA and other stuff really doesn't look like that much of a hassle. Leasing on the first year also allows me to maintain my secondary cash flow - not worry about the primary (since I don't have to fight with brokers/shippers on net payment - or worry about factoring/quickpay/etc.) while I build an operating reserve and consider getting my own authority in year 2 or 3.

Which also gives me the opportunity to bank funds to purchase a trailer.

I'm figuring year 2 going with LandStar or one of the (hopefully better) "power only O/O" lease-on companies. I'd like to learn flat-bedding, but this probably would require me to go "company driver/trainee" with a flatbedding company to learn the ropes.

I could probably pull off going my own authority right out of the gate - but I'm not willing to take on all that responsibility right from the get-go.

The plan is to get "liquid" for $100K by december (more than 1/2-way there - really shouldn't present an issue), and make the decision to "invest" in the equipment for this tax year - or take the hit on the $100K, bank it and go onto "alternate plan". Put this way - if I wanted to start out with much older equipment and 1/2 startup capital - I could do it TODAY.

An alternative - which is still under consideration - would be to "sign on" with one of the "newb trucking companies" for the "obligatory year" (which would require me to relocate and cut ties with my current "income stream"), and either bank the $$ until year two - or purchase in december (to expense it on this years taxes) and park it until year two (or wait for the employer to try and pitch me on a "fleece/purchase" and say "no thanks, but HEY, I already have a low mileage '10 780, why don't you lease me on as an O/O" - yeah, sure, they'll LOVE THAT idea).

For me, nothing is written in stone yet - I'm just hustling an banking $$'s with that number and this goal in mind. I'm realistic about this from a BUSINESS standpoint, because I am a BUSINESSMAN FIRST - and have done pretty well in previous ventures (as well as my current one). I'm looking for a LIFESTYLE CHANGE as much as anything else - and trucking fits that change from a lifestyle as well as a business standpoint.

Do I expect to get RICH? NOPE - no "false expectations" here. Do I expect I can cover my overhead and make a decent living (considering I have no family obligations, and am "squatting" in my 4 year old foreclosure - so extensive housing expenses are not a factor either) - yeah, I think it's totally do-able.

Am I crazy? Well, no DOCTOR has said so - but my friends all think it, even BEFORE I came up with the "wild trucking idea"...

And so it goes...

Rick

 

Ill tell you Rick, I really like your attitude. Your post was rather inspiring. I have been in trucking since I was a young man and have been rather discouraged with the industry as a whole for the last few years but your attitude has reminded me of how much I have slipped off my path. You sound like you have your head on straight and have done your homework. I just want to wish you luck on your new adventure and get ready for one of the biggest educations based only on experience.

 

Rick,

If the warranty is worth the paper it's printed on you're going to need it with any '08-'10 model truck. Aftermarket warranties are typically only good for wiping your rear end with. Get used to the fact that the only warranty you'll ever be able to depend on will be the one in your hip pocket.

Don't wear out a good paid for truck leasing it on with a mega paying 95 cents a mile plus fuel surcharge. That's about what you'll get at any of the ones offering fleece purchase programs. You'll go broke a little slower than the fleece operators in that sort of situation. A waste of time and effort for nothing is all it will be.

Landstar or Mercer would be a good idea if your experience isn't an issue getting leased on. BigBadBill's company Farm2Fleet would be even better. You could lease on with his company and run pretty much as if it was under your own authority. You'll be responsible for booking your own loads, although starting out if you need some help with that, it'll be there. He'll even be glad to help you out if and when you decide to move out on your own under your authority. Bill@Farm2Fleet.com or Chris@Farm2Fleet.com

Chris

 

I am glad to see that you have given this a lot of thought. However, I do have a few things that I would like to point out to you before you start spending your money.

From your post, I gather that you have not been driving since you went through school? Most carriers will not lease on inexperienced owner operators until they have at least 1-2 years verifiable otr experience. A few may lease you on with 6 months, but those are usually the ones that have low mileage pay. You can get your own authority and most likely get insurance with Progressive. Once you get the year or two behind you, insurance will be much easier to get and most carriers will then lease you on. If your friend can lease you on with his insurance, it might be your best bet to gain some solid experience that you will need to get decent insurance rates or to be able to lease on with one of the larger carriers such as Landstar or Mercer.

Finding enough freight so that you can stay local, especially in south Florida, may be difficult. Unless your friend can lease you on, I would spend some time checking around for carriers who would allow you to do this before buying any equipment. This is not a business that you can usually get into part time, at least starting out. Many carriers won't even hire drivers or lease on owner operators who live in Florida due to the limited freight opportunities and cheap rates. Again, I would spend some time checking it out. If you do manage to find a carrier that will allow you to stay local, you need to understand that insurance companies and carriers don't consider local driving as experience when they hire drivers or recruit owner operators.

You mentioned warranties. You will usually spend several thousand dollars on a warranty that won't cover much, if anything. It would be much better if you spent your money to check out the truck with a dyno and oil analysis ($200-400) or hire a good mechanic to check it out for you and then bank the difference to start building your emergency maintenance fund. I have owned trucks for years and never purchased an extended warranty. There are usually many restrictions and you may actually need to pay them to break the engine down to check it before they will even sell you the warranty. Some warranties may even require that you pay for the repairs and then file a claim to be reimbursed. Save the money and start the maintenance fund.

 

Thanks for the reply G. I assume this is the same G from cad forum?

I would be leasing on (and I still haven't confirmed details yet) to a local company that's running 48 - not just florida freight (though obviously, he takes loads OUT to get into the lanes, then runs the lanes until the driver wants to come home). He basically runs the load boards. I'm going to try and work a deal, where he insures me and runs me under his authority - then just provides dispatch for me and/or allows me to book my own loads.

I had explored just going out on my own when I first got licensed - the insurance was what killed it. While there are other factors (or were at the time) it appears that the primary rating factor was "date of licensure" - where a license under 1 year from issue, could only get 500 mile radius. While I could have located the physical address up in the Panhandle - so I could run MIA on the SE corner and most of the "dirty south" (and have some freight connections in the area) - the balance sheet just didn't work with a 500 mile restriction. And yes, you are correct - I haven't driven (verifiable employment) since I finished school. Have done some "yard mule" at the port (member of the Longshoremans Union - go figure), but no OTR.

So I just got "satisfied" with my current business - and shelved the idea. Similar to going out with a training company when I graduated - I would not have been able to maintain my "contract income stream" from my consulting work, due to lack of availability (in a company driver gig).

I'm in "burn-out mode" with the computer stuff again (seems to happen in a 3 year cycle) - so I'm looking at alternatives. The "leasing on" with a local guy - get's me the year OTR, and gives me the flexibility to not "burn my bridges" with my current business - so if I decide it's "not for me" (transport industry), I haven't given up my current career.

As far as the extended warranty stuff goes - this would be warranties from Volvo direct (or Cummins if I have a Cummins engine) - not a 3rd party "scam" warranty - and you are correct - it would probably be more cost effective to just fund my maintenance account with that $$, than "throw it away" on extended warranties - and purchasing a late model unit that is STILL UNDER original factory warranty gives me some protection from potentially catastrophic failures.

I do all the general maintenance on all my vehicles (I was a mechanic in a "past life"), so doing oil changes, adjustments and general stuff myself is going to help keep costs down (plus I really do love working on my own stuff - just can't stand working on other peoples - pride in ownership kinda thing).

So - I'm still doing my "due diligence" on all fronts. I checked the friend I'm looking at leasing on withs CSA/SMS scores - and he has a number of hits for logbooks and equipment stuff (including a few OOS's for both), so, this early in my career - if he isn't willing to allow me to run SAFE & LEGAL (despite how difficult it is to get ahead doing so), the business association either isn't going to even get off the ground - or isn't going to last too long.

So - despite the additional costs involved - I may be re-examinging getting my own authority. Administratively - the paperwork isn't really that bad - as long as you're used to keeping good records ALREADY - there's a fair amount of decent "industry specific" software already out there (and I've already started playing around with writing a database for IFTA logging/reporting). Just that I wanted to start out dragging someone else's trailer for the first year - to save up for my own. I may have to revise my capitalization goals for december - in order to factor in a trailer into my startup costs.

So again - I'm just at the "spitballing stage" here - better to research it to death NOW, and at least have a clearer idea of what my options are (from a business model standpoint).

I appreciate the reply and the positive feedback - it gives me some more data to consider... (which beats the hell out of people just telling me "you're crazy" or "that's stupid". I had a "friend" tell me that yesterday - "I've owned trucks - that's just crazy/stupid - don't do it". A REAL FRIEND would have said; "that's crazy - but how can I help you make a go at it".

Regards,

Rick

And as a side note Progressive still only does 500 mile radius for Motor Carrier Liability - same boat as a newly licensed driver - http://www.progressiveCommercial.com/insurance/motor-carrier-insurance.aspx

 

Depends what state you're in Rick. Progressive writes unlimited miles for many western states.