I'm a non-trucker with general business experience. I have an opportunity to invest in a new small trucking company. I am being told that now is a good time to get in because small companies with capital can book lots of loads now because many individual truckers have gone under and demand is still there even though the economy is slowing.
I am also being told that brokers and shippers are generally covering for increased fuel prices.
In other words, they're saying that the small companies currently left standing have no trouble finding business and that fuel price worries are not justified.
Thinking about investing in a small trucking co.
HAVE YOU EVER WONDERED WHY PEOPLE ARE ALWAYS TRYING SELL YOU SOMETHING, THAT SO PROFITABLE, THAT THEY NEED YOUR MONEY TO STAY IN BISINESS. --------SOMEBODY IS LOOKING FOR THEIR NEXT SUCKER.------IF YOU CANT ANSWER THE FINANCIAL QUESTIONS YOURSELF. THEN YOU ARE NOT INFORMED ENOUGH TO MAKE THIS KIND OF FOOLS INVESTMENT.--IF YOU HAVE MONEY FIND ANOTHER INVESTMENT. -------NOW--RUN,RUN,RUN P.S THE BROKERS ARE MAKING MORE BY KEEPING A PORTION OF THE FUEL CHARGE.
Buy a bond or invest more into your 401-K. Don't prove P.T. Barnum right yet again.
Capitalists are like honey bees. If there is an opportunity, they will be at the nectar long before you get there. If you really could make money investing in small outfits now, no one would have made the offer to you. That's because they would have had a line down to block of people willing to invest in these small companies last month or even last year.
If you still want to go ahead with this, slip me some of that investment. I'll take it in small bills.
The small companies currently left standing are standing on tip toe up to their chins in $I##. Times are tough and are not going to get better for small companies until enough of them have gone bankrupt to make it worth the while of Swift, JB, Schieder etc ... to raise the rate.
Think of it this way, if a company with 2000 trucks makes 2 cents per mile, per truck, per day they are still making money. If a company with 20 trucks earns half again as much money, they are going broke. It's Wal-Mart vs Bill's five and dime. Volume, volume volume.latanea Thanks this.
most companies operate on margin to begin with - and any gains will have to be absorbed back into the infrastructure of the corp. if it is a "new company".
realizing ANY profit with a trucking company requires a ruthless approach and a willingness to squeeze employees.
I was a TYRANT when I had my own trucks... - but in return I made some good cash.
(guys MF'd me daily - but being nice would have put me out of business)
you need to learn what you can about the owners personality - experience in the industry and their working capital.
a 5 truck operation (like I am familiar with) required close to 250K working capital as well as an equipment outlay of 175K a year at minimum.
hard assets need to be 200% of the working capital if you expect the company to last and to be able to weather issues such as the "fuel cost" demon and other legal / insurance issues.
good luck - but your investment would probably yield better results in foreign bonds or even the base currency market right now.
trucking is taking a hit - and will continue to do so for a few years at the least.