The correct formula to be an O/O

I think you should take a look at the income and expenses from owning or leasing verses being a company employee before taking the plunge. The average driver can earn between 30K and 40 k for doing nothing more than hauling freight for a carrier. If your ambition is to make more than that you're probably going to have to go into business for yourself. My business plan requires at least 10,000 in start up capital. That is to cover the expenses during the first 3 months. Lease Purchase requires enough capital to form the LLC or Sub-chapter S Corp. and Obtain all the permits and pay taxes and fuel and other cost. Plus you need about 25,000 in the form of a line of credit for maintenance and repairs on the equipment, owners salary, and quarterly taxes. In my opinion you don't want to start up with out a good plan to generate revenue (Taxable income from service) with out having sufficient funds to cover operating expenses during break-downs and off-time (including slow or low paying freight). In this economy a trucking business plan should be able to show at least a break even point. A number based on actual and reasonable expectations. That would just be the beginning. The word success is not determined by others, It is determined by your ability to create and execute a financial plan that nets more income than expenses on a P+L statement. Assets and Liabilities. A truck is a depreciating asset (goes down in value the longer you own it). It is not a wise investment to go too far into debt unless you have deep pockets. Even then, the write offs may not cover your losses at the end of the year. Owning a business can bring personal and financial freedom as long as you are successful implementing the plan of action.



If you don't know where you are going, any road will lead you there!

 

Well, it sure didn't take long for the hecklers to show up, did it?

I think we all know the O/P was talking about lease op rather than actual owner op. Wouldn't want to step on any sensitive toes around here.

It is entirely possible, if done correctly, to succeed by leasing a truck. Will you make as much as the guy who owns his truck outright and runs under his own authority? Probably not. But then, the risk isn't quite as high either. Make more than a company driver? Most likely, yes, as long as you take the reins of your own business and don't expect the carrier to do it for you. It is not easy. There is no such thing as easy when dealing with the transportation industry. If you want easy, stay company.

The key is to set money aside every week. You will need this money for maintenance, taxes, vacation time, taxes, slow times and did I mention taxes? I suggest no less than 10cpm off the top, before you even put your own fingers on that check. This is the single thing most L/Os do not do. Once that money crosses your hand, it is too easy to spend it on something. You either have to maintain the discipline to not spend it or put it somewhere that you will have to think about it before accessing it.

I have actual, real information in my blog that I haven't updated since April...without the distraction of hecklers. You are welcome to look at it anytime you wish.

 

And as one who has been interested in the L/O side - but NOT the O/O side - of things, I scrutinized her "actual, real information" on her blog and can attest to the quality.

 

Now go read Injun's blog.

 

It sounds more glamorous than "renting"...

 

+1 on this thread and Injuns blog along w/ all the positive contributers.
im currently a company driver that's been looking into a l/o and I've talked to a ton of l/o from w/in the company. Few questions if I may jump in..

When you lease do your miles go up, or do you have to work the dm's a lot harder to get more miles.. or are you all working the mac 30 to gain miles? I run decent miles as a company driver, id just hate to lease then see my miles drop off.
I was also told NOT to have the company tax people, forget the name, do your taxes each quarter as you pay out the backside. Someone suggested hiring a bookkeeper and have someone with trucker tax experience do your taxes..
last.. do you have to start a small company llc in order to help at tax time.?

Sorry if my questions are stupid, or have been answered, but these are my foggy areas of understanding the lease process..

Thanks, and safe travels.

 

I became a l/o about three months ago. I use ATBS for my accounting. the cost is 15 dollars a week, taken out of your settlement. i checked for an accountant where i live and had problems finding one who knew how to do books for a truck driver. when i found one he wanted 150 a month. ATBS gives you a profit and loss statement each month. they provide envelopes to mail in any reciepts you have at the beginning of each month.

I f you get an accountant make sure he knows everything you can deduct and how per diem works.

 

What difference does per diem make to you?

It doesn't because you don't get it as a lease operator.