Wannabe O/O's

because if you mind your p's and q's, it is......

I know a lot more independents and O/O that are far more better off than any other group of people. They seem to be way more down to earth, realistic and tend to have sharp head on their shoulders.

Don't believe in debt and pay cash for things more than other people as well.


And it's a great filter. It will either eat them up and spit them out or it will accept them and they will succeed.

 

The biggest problem I see is people see a huge paycheck and not realizing that it is gross not net profit, and don't really know how to tell the difference.

When some of these company drivers ask me what I make as an O/O there eyes get huge when I tell them I can gross $1000 a day most day's. They have no clue as to what it takes to operate a sucessfull business and how little of that 1000 you actually get to keep after everything gets taken out.

 

Forget the other drivers Im still trying to get the wife to grasp the 1099 concept. For years it was a weekly teamster paycheck and its really hard for her to learn to think b the month not the week.

 

This is why the failure rate is so high. "I grossed $7000 this week, I'm gonna go buy a NEW Escalade!"; next post from the same guy "I can't believe these dirty rotten [insert shop, tire vendor, fuel stop, etc] want to charge so much for [insert normal and expected business expense]. I don't know how I'm gonna make a living. Does any one know if you can finance a new fan belt?"

It's the same reason people gripe about cheap rates. If a load is cheap and you hauled it who's fault is it? If I was the broker and could make $1000 off you why wouldn't I? It's just too easy for guys to go down and get up to their eyeballs in debt to buy a truck and trailer with no operating cash to back them up and no clue what to charge or how much it cost to operate.

Anyway, rant over. I sold my truck and trailer and got a normal (kinda) home at night office job. Same one I had before I struck out on my own so I guess I don't have to worry about the fools doing foolish things anymore.

 

They can't manage their own personal budget and bank account, and they write hot checks 3 times a month and they think they can successfully run a truck operation? Good question. You need to have the money management skills of a Jewish businessman, and the work ethic of a Mennonite father who completely supports his family with the fruits of his own land and sweat, then you might stand a chance of getting past year 1 as an owner-operator.

 

Too many see or hear about the gross owner operators make and assume that they can do the same. Many rarely consider that there are many costs coming out of that money. Just because someone can drive a truck doesn't necessarily mean that they can be a successful businessman. I think that a major factor in the high failure rate is a that some cannot make the transition from driver to business owner. Buying the truck is the easy part. Building a profitable business is the difficult part. Those who fail to make it as an owner operator tend to share some common traits. They have poor credit, no money and no business or management experience. You will usually find that they also have no business plan. They don't plan for contingencies. If they do any planning at all it is only for the best that could happen. They don't plan for the inevitable breakdowns that will come. If you breakdown and don't have either the money to make the needed repairs or credit to borrow the funds, you are out of business. That happens more times than I can count. I have hired a number of former owner operators and lease operators and it is usually the major breakdown that does them in. The failure to plan is only the symptom. These people should never have bought or leased a truck in the first place. There are good drivers who make terrible owner operators. New owner operators also tend to buy toys, chrome and other things instead of putting money back to get them through the hard times. These people over extend themselves and when the tough times happen, as they will, they are not prepared. Another factor which contributes to their failure is that they buy more truck than they can afford. Rather than buying an older truck with low payments, they buy new or nearly new and have the inevitable big payments. Those who usually succeed start with something that is a little older that they can afford and let the business pay for something newer.

 

I think they see the gross $$$ and don't consider the expenses.