So you want to "own " your own company

First:- APU; Sorry misprint but there are many states that are serious with anti-idle laws and many cities with-in states that don't. NJ and the Dallas metro area has cops just for this reason. --We didn't have one. Depends on where you live, where you run, and where you incorp. or LLC but the fact you will find is-
a)- There is legal protection. A person that says there is not or that it is a waste of money simply does not know. what they are talking about. It is like breaking the law. If someone does and don't get caught it is like it never happened. A ticket is different than some attorney trying to attach your house just because he can.
-An attorney will provide the specifics but it can be agreed it is not a good idea to have unprotected sex with a stranger right? Limiting your liability is very smart. I did not say the corporate umbrella could not be pierced but it is still protection. A lawsuit because of an accident, bankruptcy, etc.. can attack the assets of the company and not your house or other personal property without further action in court to try to pierce the "Corporate Vail". This is a """""FACT""""".
b)- As for "tax" advantages you must talk to a CPA familiar with the trucking industry. There is no bottom line amount where the advantages are more or less. A new business can and will show losses for a specific term. You would not want to lose tax advantages because personal filings end at the year filed. However--I did cover that by advising to get a CPA.

My math may be flawed as I "ALSO" pointed out but do not add like the example that followed as there was no $3000.00 left over in those figures. $1.30 plus $2.50 = $1.90 average and not $1.68 which is "$.22" cents-per-mile difference or 13%. This is a significant amount. As you may reference I did advise to "do the math". If a haul pays $1.68 out and $1.30 back this is a $1.49 average. If this is within the financial operating criteria all is good. Reconcile your statements. Book keeping "Accidents", as in omitted load payments, can be an accident but still not acceptable.
Now, the downfalls; I already mentioned some.
1)- Lack of capital. If you have to start out (or at a near point) pawning your BOL's for cash to continue you are messing up. This is the major reason business' fail. You need to have capital for about 6 weeks.
2)- What state you get your authority in is important and if you are going to run plates or not. We are in Louisiana and it cost $3800.00 for 48 states. This was because of some figure used for new companies and was prorated on a national average. Yea! I hope you are not in LA.
3)- We refused to run for less than the truck needed to break even. We probably could have survived. That is not what going into business is about. I work in the oilfield industry in Louisiana. There was an oil spill and clean up will last a long time. The pay is phenomenal to a driver compared to the headaches of owning. Checks average $1800.00 to 2200.00 to the "driver" and a lot of the time driving isn't even required. There was no oil spill when we got on the road though and our trucks were specked for OTR.
4) Pay the truck. You have to have enough profit to put aside a certain amount for repairs and future replacement.
I did mention the money is out there. It just should not have to be a fight every day to get fair freight prices. We sold out because we "WERE NOT" going to haul $1.20 to 1.30 a mile freight period(Did I mention "Period). The owner-op's that do are the reason that the big companies get bigger (and hire owner op's at a reduced rate) and so many (check the statistics) owner op's go out of business every year. You can bet not all of them just could not manage a business.
In conclusion: Be frugal. Make sure your paper work is in order. Run legal but if you run your own plates make very sure you are compliant with DOT (legal--legal--legal) in every way. You "will" have an audit. Don't run for cheap freight that will only prolong you losing anything you have gained. Get a "bottom" line" figure that it will cost you to run the truck. This includes driver pay. If you can not "average" this amount you will be digging a hole. Taxes are at the top of the list of importance and will be considerable. Non-payment of income taxes can be a pain but not catastrophic up to a point. Non-payment of certain other taxes can be very catastrophic.

I could lie and say you will make plenty of money, all new companies succeed, don't worry be happy, and oops; your business failed but the good news is the economy thanks you. This would probably get me more "thank you" notes but I just want to assure you that statistics are not on your side.
You can dot all the i's, crossed all the t's ,your health remained great, and end the end, for a number of reasons, you could still be a negative statistic. The fact of hauling freight that is 50 cents a mile less may be ok to get from point a to point b to make better money but "overall" it is the average that matters. If a person can not afford to haul freight it is still a fact. No body goes to work and periodically gives a days wages just for the fun of it right?
This means it is imperative to take safe guards every way you can to prevent this. That is fact. This does not mean you will not survive but be aware it is usually a battle. If you can afford it extra protection like breakdown insurance and other things can be invaluable.
Good luck.

 

Just a note on incorporation. As a one man small business owner, you will be driving the truck. You cause a bad accident, the attornys will go after the corporation, which has limited assets, and you personally, since you were driving the truck. No corporation to hide behind there. You had your hands on the wheel.

 

It's not really the loads but having someone who keeps you moving. Before I got this person to help me out I would sit for the rest of the day after delivering a load setting up the next load. With her help she does all the paperwork with regards to carrier packets and I go from one load to another.

I always say, if your not moving your not making money although with her it's a little overboard....

 

What???

Ok, I still have no idea what you just said and how you arrived at the previous figure of that person left over with only $388 dollars.

 

I take it that you are using a dispatch service? I talked to one that charges 10% running under their authority. That's a good deal except they said their average $$ per "loaded" mile was $1.50 for dry vans. Subtract the 10%, deadhead miles, and we are talking about $1.30 pm. In my opinion, not enough $$ for all the increased cost as an independant. Just my .02.

 

I would say now just from what I have read on here and what I know I would not be moving for anything under 1.50 coming to me. That .20CPM makes a huge difference in a year running 120K miles... 24K dollars?

 

I wouldn't advise anybody to be an owner operator right now with that new csa 2010 laws. I herd the government wants to do away with o/o. They own every other aspect of the economy exept trucking and there going for it next as far as i see. These laws don't help the industry one ioda.

 

Not a dispatch service. She is a real broker doing this on the side. She charges a flat rate of $100 per week.

 

The bottom line is capital. If anyone tells you different they are in line to be the next "ex-owner-op". I think one said he needs $11,000 for fuel. That says it all. The more you give to the other guy, as in 25 to 30% off the top to run for them, the less you make. Having to factor is a mistake unless absolutely 100% necessary. This is like payday loans and are expensive. I have not studied on it but I guess saving 25% on a company lease and paying 10 or 15% to factor would still be a 10-15% increase. Somebody else may know better.
--You have to account for all expenses and remember the truck is like a partner also. We got out of it because the oilfield where we are, especially with the BP catastrophe, pays phenomenally well as opposed to what we were seeing leased to someone.
-I drive for someone else, make money when I am just sitting, and clear $13 to 1600.00 a week. My gross is up to $2200.00, PLUS--I am home almost every night and not 5 weeks out.
-Concerning LLC. or incorporating. Here is an example; Unprotected sex with a stranger can be dangerous right? I am not saying a company corporate structure can not be broken but there is protection and the person that says different is simply wrong in so many ways. That is why you consult a specialist. If you have nothing but a truck and something catastrophic should happen you might have nothing to lose. If you do great and have assets you might want to be protected.
-There is also the fact that an owner can be an employee and can be paid as such, certain deductions (other than depreciation) can be carried forth and do not expire at the end of the year, and many other reasons to consider the option. There is a time period for a new company where it is perfectly normal and expected to operate at a net loss. All deductions, including pay and buying a truck personally and leasing it to the company, and many other things may make it worth while other than just protection (even if just limitations) to check into it.
--CSA 2010 will assure you will have an audit fairly soon. Ours was 4 weeks. Model your records like the bigger companies. If you are not leased to another company you have to have all your ducks in order. Someone has to know all the ends and outs of the FMCSA rules, also (concerning alcohol and drug), randoms, a drug and alcohol program, and record keeping. Know what an auditor will be looking for before you get audited. A big company with many trucks can afford a $10,000 dollar fine, can you? A good audit will go good, a bad one and you can get points accessed, maybe fines, but can be certain to be put on an increased enforcement list.
Now, Also know that capital means being able to still run if you get a company that does not pay on time. Check credit ratings and payment histories. There are companies that do this and is probably not a bad idea or investment. It is not a main reason we got out but we had a company that did not pay us and we are taking them to court. For the risk and income we just did not see (from our point) that it was what we wanted. If we had more capital we might have outfitted our trucks for the oilfield but that was a lot more expense so we just sold the trucks at a profit and are happy.
I just want you to understand that for every one that makes it the number that fails is pretty high so study up and be prepared. That way you will not fail because of a surprise. If they ever make fuel surcharges mandatory it will be a help but probably don't count on it. Get a bottom line figure on how much it costs (averaged) to run your truck. Being flexible and losing some might be a given but knowing your cost per mile will assure that you will know how flexible you can be. I was not going to fight tooth and toe-nail to keep running and not make a fair profit.
--Finding your own loads can save a lot of money but there are risks. Flatbeds make good money but the work is hard. I like step-decks and made money hauling oversize loads and equipment with no tarping. You have to find what you want to do that also makes money as I still think that is the name of the game.
--My answer may not get a lot of thank you's but it is true and I hope helps. Also, some may argue but I found that OOIDA had valuable tools. They have a contract department, legal department, insurance that was competitive, and other reasons I think is worth the money.

 

I've been doing this for 5 years without any previous experience. I always maintain at least $30,000 in cash that I will not dip into. That's my operating capital and emergency fund.