*truck company - with multiple trucks

I smell a TROLL. Troll patrol! Where are you????

 

If you are going to manage/control/own trucks....you best be knowing how to operate them, how they work, what can break, why it broke, deciding what is driver error or ware & tare. Understand driver comfort, drive times from A to B, hours on the freeway dealing with shippers/receivers and idiotic 4 wheelers that don't know how to drive around trucks.

The best way to start a company is to buy your own truck, drive it, build a customer basis to the point where you need 2 trucks. Then you can drive and dispatch yourself and your other driver. Watch it grow. Then get another truck. Then step out of the seat yourself and get out into sales, go touch base with your first customers, and pick up new ones, all while dispatching your 3 trucks on the road efficiently, looking for opportunities to grow.

Just my $0.02

 

If I read you correctly, you are currently a college student who is deciding what he wants to be when he grows up? For arguments sake, I will make the assumption that you are a traditional student in your early 20's. That is strike one and strike two in this business.

Whether warranted or not, drivers look down upon college educated managers with no seat time, warranted or not. They would rather work for and would definitely have more respect for a guy who has a million miles in the seat. Secondly, fact is that most people in general, and especially truck drivers, disdain the thought of working for a boss that is 10-30 years their junior. I'm sure if you are in a Business Administration or other type of management program, you have covered this info, but let me stress that the concept is exponential in this business.

Company employed truck drivers are a very fickle creature. You make one mistake, whether intentional or not, and they will walk in a heartbeat. That is the nature of the beast in the ultra competitive recruiting environment that we deal with. For a lot of years a driver could quit one job today, and walk down the street to another company and start for them tomorrow. That effect has lessened significantly in the last few years due to the economic downturn, but it is still there. I am not casting dispersion on drivers. Most of them are just doing what they think is best for them and their family. I personally don't blame them often times, as I would not put up with being treated poorly either. They do, at times though, overreact to small issues and make mountains out of molehills.

Driver retention and recruitment to replace turnover is a MAJOR issue in this business as it will severely affect your cash flow. That is another reason why I would advise against trying to start a company without having seat time. Can you really afford to lose and replace drivers in droves while you suffer through the steep learning curve on the fly?

This business is a game of pennies. Fleet owners like myself only make a few pennies per mile after all expenses are paid. The pennies add up at the end of the day, but you have to manage them very, very closely. If you are paying finance charges to a bank to repay start up funding(good luck getting that by the way), those are pennies out of your profits. If you are having to pay a cut to a factoring company to advance finance your receivables, that is a HUGE chunk of pennies out of your pocket. The list goes on and on.

I would HIGHLY recommend against implementing your plan, but at the same time, I know a little about ambition and following dreams. It is possible to succeed from your position, but highly unlikely.

Good luck to you in your endeavors and if you have any specific questions that I can answer, I will attempt to do so as time permits.

 

Very well put

 

Geeze Dino....that has got to be the SHORTEST post you've ever made!

 

Awesome post and this is my current approach at the moment as well. I just separated from my business partner because he wanted to jump into the 3-4 trucks arena right off the bat. I on the other hand, opted for the more stable pace that you just described above. I will establish at least certain routes, then I will hire a driver to take over my function, I will dispatch him and develop more clients, then get a new truck that I will drive and repeat the process over and over. I know that to keep two trucks moving at all times you need at least 3 drivers. Everybody needs a break at some point.

In response to the OP... I have been a small business consultant for many years, and from a business perspective I will tell you that there are many businesses which you can BUY an established operation and hire a very experienced manager with more knowledge than you to run all the aspects that you are not as knowledgeable about. Unfortunately, at the size of 5-10 trucks, in this industry that is NOT a choice. With that few trucks you could hire somebody to work UNDER you, but you will not be able to afford somebody with enough knowledge (and desire) to run the entire outfit on their own, and you actually expect to make some money. If you were looking at buying out a large company with 50-100 trucks and already a running set of employees and managers, then yeah it would be an option. But with 10 trucks or less, YOU will have to be the more knowledgable and the one in charge.

 

For a guy who has a butterfly sticker on his sport bike he is pretty smart!

 

LMAO!!! Seriously Jay?! Way to ruin a pretty serious business geared conversation. THREAD HIJACKER!
P.S. To everyone else...I DO NOT have a butterfly on my bike....

The owner and the wife is the standard starting arrangement, the manager is usually down the line. I am assuming that if you are interested in purchasing a running operation then you know that you have to get a full picture of the companies financials (assets/liabilities/cash flow/profits). You will then have to see how your costs (your salary/managers salary/wife weekly shopping spree salary/loans to cover the business sale price) will calculate into final net profits/retained earnings (after taxes of course, and don't forget the personal self-employment taxes for your salary, and try to bring in the manager as a consultant/contractor so you don't have to pay workers comp or the quarterly employee taxes, although then he will be responsible for his full self-employment tax but that is 100% his business how he handles that).

Basically, if the target company has solid financials and you performed all your due diligence properly, then if you are ok with the money you can achieve then go for it. But if it is borderline then you have to remember that although you are passionate about the business, you are not knowledgeable about it. Just do like me and spend about 3 weeks with barely any sleep while learning about the industry and all its regulations and little quirks and you should be up to speed pretty quickly