I'm following both Double Yellow's thread and your thread closely. Becoming an O/O is part of my plan, and certainly not with Swift (where I'm currently a company driver and trainer). I'll want to maximize my revenue and for my way of thinking and inclination that means flatbed, leased on with a company that gives a percentage of revenue. Fleece/purchase isn't part of my plan either. I'll want to either outright pay cash or finance my truck with enough in reserve in an operations account and a maintenance account to be successful.
My many thanks to you and DY for giving us a look at the PROCESS of becoming an O/O, whether on a leased on deal or with your own authority. It's instructive reading.
The journey begins - purchased a truck.
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I think you're on the right track mentally. I liked the fact DY went van, and full O/O right off - his figures so far show that yoou can't simply dismiss van freight to the 'cheap' seats. My thinking was flat offered better rates, but it comes with it's share of equipment costs and volume swings too. One of my deciders was the need for some physical exercise after 7 years solid steering wheel holding.
We intended to start February 2016 - and would have gone in with cash up front for everything, with reserves set aside for maintenance and 'oops' funds. It's a personal flaw of mine to jump the gun on projects, often half ####ed - but one tidbit of KR's advice made sense to me (but not my morre fiscaly conservative wife) - in that, If you start a truck operation with a bunch of cash, you're less likely to budget shop, and scrape together to make it work.
That's certainly been the way. First mistake was looking for the trucks on Truck Paper, finding them, getting all excited, then becoming depressed when we'd agree "not till next year". That progressed into looking at local finds, investing in reports and dyno, and then . . . a big red thing in the back yard!
I remember a teacher saying "The Japanese perform 90% research and planning, and 10% actual work" - and I think the research is very important. Of course there's a balance - after looking at the KW, and pestering the owner for details, having his shop run the ECM in front of me . . . I returned home and reported findings to the boss. After listening to me for a while she said . . . "Well? Are you gonna buy it or not? You've been faffing around with looking at trucks for the last 3 months - if you think it's a good truck, then go and clean out the accounts and buy the dam truck!"
I'll say there was a lot more involved in the process - even leasing on with a pecentage based company - than I thought, and it takes a bit to arrange while you're still out working company, but still easily achievable.
I'll also add that there's not a lot of "freedom" involved - it'll be my truck, and I can modify it as I see fit, and open it up to 90mph if I want - but I still have to play by the rules of the FMCSA, DOT, Landstar and the IRS. Any foolishness in any area will have my butt back in a company truck in an instant. The main freedom for me will simply be the 'book the load if you want it, when and where, and for how much - depending on your needs".
congrats. I would say good luck but a famous guy once said "luck favors the prepared" and from what I have read a lot of preparation went into this purchase so it seems luck is on your side.
My turn to give some advice, take or leave it, it won't cost me anything. I do have some experience with LS, 22+years.
1. Insurance try First Guard, out of Florida, they will give you instant quote online, I think they give LS a discount and the are good with claims. First hand knowledge from storm damage
2. The cpp insurance is you best protection if you get hurt, buy the high limit. Better than workers comp, you can use the best Dr's and hospitals, plus get a weekly check while you are off.
3. You have never pulled flatbed so work orientation so you can go to securement school at the same time, (you don't have to take your truck to orientation)
4. When getting flatbed equipt don't forget to get corner protectors, pads for chains(used carpet) and padding for tarps or you will ruin new tarps quickly. I like pieces of old tarp or furniture pads. Start with easy loads to tarp like steel or boxes, don't try uncrated machinery till you get exp.
You can buy from Tri City Canvas in Granite City, LS discount and no tax http://www.everythingforyourflatbed.com/ Collect a good supply of dunnage, it will save you time and trouble. (get hard wood)
5.You spent all that time cleaning up the truck don't put their cheap signs and number on it, have some cut to match your truck. Put them on the doors, don't be fancy, it will help at the scales. Don't even bother putting you new LLC name on it. (LLC is a waste of time and money, but that is my opinion)
6. Let LS get you tag and permits, buy fuel on the card and no IFTA worries. Open all you mail from LS and put permits in the truck and you will never have problems with being legal.
7. Don't over analyze every load, set you call alert high enough to keep from getting overloaded with cheap loads, have them sent to Email and phone. You have to make fast decision, the good stuff will go fast. It is not go where you want when you want, it is go where the money is when it is offered.
8. Don't waste 2-3 days waiting for that perfect load, before you know it it blew a whole week, don't be afraid to deadhead 5 hours to get to a good load is better than waiting several days hoping one comes to you. No one pushing you to go is the biggest reason for failure at LS, other than some people are just stupid.
Trailer, and financing.
Called LS today and got the recruiter and the lady from trailer utilization on a 3 way (call, folks - minds out of the gutter), to confirm that YES, the open deck trailer rental has been suspended as of January 1st until further notice. Trailer rent of $170/week and 73% of revenue, has been replaced by no rent, and 65% of revenue. I imagine they'll be a few nasty phone calls from new BCO's who may have qualified late December, and picked up a trailer in the first 2 weeks of the year.
At a load board rate of average $3/mile, and 100,000 miles/year, this represents $24,000. The new 53' spread with 2 tool boxes prices at $30,119. I think this is a no-brainer. Remember, my initial thought was to rent for 2 months and assess my local market for trailer need before buying. Between working and looking, this could easily stretch to 3 months - or $6,000 in lost revenue. I'll take a calculated bet that a 53' spread combo will give me the most versatility and go forth. The trailer will not be available until Feb 26th.
After a 14% offer and a 22% offer on trailer finance, I got in touch with our bank. The options are:
1) -$25,000 unsecured loan. We make up the $5,119. Rate is 8.5-9%
2) - $30,000 secured (trailer title lien) loan for full amount - rate is 4-5%. This is currently being reviewed by head office as they consider trucking 'high risk', and will be assessing it on my personal credit score, but offering a business loan rate.
The business accounts are set up now, they approved the credit card for $5,000, then sent it in for a $20,000 limit which approved. I think they goofed up, as there is another credit account with $20,000 available that appeared also. Not sure if I need to shut that down or leave it open for the credit score gain.
Slight hiccup. Went to the podiatrist today, she has a bunion that I've been hounding her to have taken care of. Needs surgery, Feb 12th. The other foot will also require it, but can't be done at the same time. We're on a call list for cancelled surgeries, so may be able to get in earlier. 3 week wait between feet, and would be ideal to have this taken care of while currently covered under insurance. I asked the doc what his cash price is - $800, and then there's the surgery center and anesthesioligist for another $X . . .
Worst case scenario we'll have the other foot taken care of later in the year once under our own health insurance. It doesn't bother her yet, but it will.
Qual center rang to say the drug test results came back and they said - "sorry, the crack is still in your system". I said "I know - why else would I consider buying a truck" . . . and we laughed and laughed. Aaaaah, the hilarity. No. Seriously. Qualification is done with me, now it's corporates' turn to give the final OK. I have the number for the Ft Worth orientation center, so I'll call tomorrow and plug her with lots of questions. Plan is to fly down for the week and get it done.
We raced (and I mean raced, 1560 miles in 27 hours - 65mph truck) back from L.A. to make the podiatrist in time, after 28 hours waiting in the motel on freight. I'm getting a bit old for the whole "up 24+ hours" game - something I won't miss. Catch some sleep tonight and hit the dentist (again, get the health insurance while it's there) tomorrow. Back out Friday I think.
So - kick off is looking like early March. This will give time for the tax return to come in, preliminary figures pending the W2's point to $9,500 (state and fed), which will help ease the possible $5,000 trailer deposit, and have a little in reserve for transition.
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