Splitting Profit with 2 Owners

Absolutely. When I started in construction, I started at the bottom, a laborer, because I didn't have any tools. My job was basically stacking wood, and cleaning up the place, and 'fetch'. I bought tools with my first check, and because the cut man couldn't show up on time, I got his job. The boss taught me how to cut. Eventually I became lead. I am the guy that keeps everything going. I have the blueprints, I lay everything out. There are a bunch of building codes that you have to know.

Likewise, if you're planning to flatbed, you need to know where the freights at. Quite a few drivers get caught up in the ol '$2/mile' circus, and pull a load for $2/mile to a dead zone where the best paying load you find is $.80/mile including FSC. And so they sit around for days on end waiting for a $2/mile load out of there. I've seen guys wait 2 weeks for a load out. You kill your pockets when you do that. Doing that $.90/mile plus FSC that the bottom feeders do is smarter than that. Run your minimum in the freight lane. Demand maximum dollar to go out of your freight lane. If they want me to take a load to a dead zone, I plan to bounce out. I'm not sitting and waiting in a dead zone. As soon as I am empty I am bouncing. So the load has to pay enough for me to get in and out and all the way back to the freight lane. Your freight lane differs according to the freight you pull. YOU DONT WANT TO TRY TO LEARN THE FREIGHT LANES ON YOUR DIME, YOU WILL GO BROKE.

Some people want to be owner operators because they don't want anyone telling them what to do. They've heard one too many, "My dispatcher forced me to drive tired" stories. It's like working out and training, but in order to be successful as an owner OP, you're going to have to motivate yourself. You will have to push yourself. In business, the most valuable thing you have is your name and if you want to get to the top of the pile, you're going to have deliver the service that you promised. That means fighting through sickness and fatigue. You train yourself, toughen up. Your name is on the line. Want to see if you're tough enough? Go be a company driver first. You should be able to handle that job EASILY. If you're complaining about a desk jockey running you ragged, you're going to have an extremely difficult time as an OO.

Now, don't get me wrong, I don't drive nowhere the miles like I used to as a company driver, but I can still crank out 700 miles in 11 hours, every day of the week. I keep my stamina up. I make sure that I stay in fighting shape. Point is this, when you become an owner operator, you want to be able to keep your word. If you got a thousand miles between shipper and receiver, and you promised someone that you would deliver their freight by noon tomorrow, you have to deliver. Flu, food poisoning, whatever hits, you keep going.

 

Learn the business BEFORE you go into the business. Drive for a good company (research) and learn, learn, learn....even if you're taking a pay cut, you're LEARNING WHILE EARNING, THEN you go into business, buy the truck and so...also, I have no idea how you plan to dispatch (or do anything else for him, other than write a check) while in the military....One truck WILL NOT feed two families unless you're both driving it.

Thank you for your service and good luck!

 

I do not even trust myself I know me to well!

 

There's another old saying, (no, not about the camels) "don't go into business with family." However, while partnerships can be hard, if the partners have a shared goal it can be, and has been, done very successfully. We don't know about you and your brother, but you sound like you're grownups and have your eyes open. so don't listen to negative comments, listen to the content of the constructive comments.

I have partnership background (not successful but we learned a lot) and I think you should consider a business plan, short, mid, and long term goals. Then the steps to achieve each of them. The driver will need to have a working income, the military brother can maybe reinvest his share into the business. It seems to me you'll do a lot of research/due diligence before writing checks. There are good resources available - here, OOIDA, NASTC, others. Keep asking questions. The whole thing about making money in trucking is trucks rolling down the road with paying loads. If you can get a good (reliable) truck and keep it rolling, you'll be off to a good start because you'll have income and hopefully profit to talk about. Adding trucks is hard because good (reliable) drivers are hard to find. The good ones mostly have work already. The ones who are available? You gotta ask yourself (and the former employers) why.

There's tons of work. There's about $200 Billion/year in freight transportation, so I don't think you'll have a problem finding work. the issue will be paying work. You'll need a lot of information, like cost per mile or breakeven number. You can go a lot of ways: lease on to a company for a while, or jump in all the way, but running your own plates is quite a bit of work with the bureaucracies, and that means someone will have to have time to pursue those requirements. Do you, Cummins? Your brother is driving, right? Well, there are services you can employ, but that's another expense and another chance for a problem.

You might get the MVD and/or DOT in your state to give you their requirements for registration and authority as a starting point. Make a list, work thru it, see how it looks with some facts.

Whatever you and your brother decide, Best! J

 

Pretty simple. First, write a business plan, even if it's a page or two. It will put in writing what your plans are and
Guide you.

As for pay: pay him a fsir per mile rate. Pay yourself a percentage of the loads.
Split the left over evenly.

As your roles change, you might make changes in pay structure to keep it fair.

 

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pay him a fair per mile rate. Pay yourself a percentage of the loads.
Split the left over evenly.
As your roles change, you might make changes in pay structure to keep it fair.

I've been in many partnerships and I know you have to keep it fair.

 

Some good advice and some bad advice here. Some people do not know the difference in profit and gross receipts.

As for if it would be good to partner with your brother, only the two of you can answer that question. What I would do is something like anything over say 5k in cost would have to have the approval of both partners. This way one does not spend what the other does not agree on.

Now as for the splitting, it will depend on what percentage each partner owns. Simple as that. If it is 50/50 then it is split right down the middle but AFTER ALL expenses. Since your brother is also the driver, he will be getting more than you even on a 50/50 split.

When you get a payment it needs to be budgeted for everything....(Not necessarily in this order except #7)

1. Driver pay
2. Fuel
3. License, Insurance taxes etc.
4. Overhead expenses
5. Maintenance Account
6. Keep in company (company has to keep some money to grow with)
7. Profit.

What you will split 50/50 is line 7. Your brother will make more than you do because he is also getting the driver's pay.

I think that it is you that is footing the bill for the truck so I would do this....

Set up a LLC or something similar and the title to anything that you purchase goes into that company name, say ACME Holdings LLC. ACME then leases the truck to Billy Bob's Trucking company of which you and your brother both own. You alone own the ACME company.

Now say your brother makes a bonehead move and sells or loses a load of pharmaceuticals and the insurance does not cover it or refuses to pay. Well the shipper will come after Billy Bob's Trucking but since they do not own the truck they can not ever get the truck.

Also if the partnership for some reason does not work then you still retain ownership of the truck and can use it or sell it to get your money back or at least most of it.

You also need to set up some sort of corporation for the trucking company and you MUST make him aware that absolutely no money from the company can be used for personal expenses. Even a pack of cigarettes will pierce the corporate veil and both of you can lose everything you currently own.

A good book on the subject is one of the Rich Dad series that was written by a lawyer called Own Your Own Corporation. It explains all this in detail and laymans terms so it is easy to understand.

Even with your brother, first and foremost you must protect yourself and your assets.

This is just a down and dirty version and not the nuts and bolts of how it works.