Don't Be Fooled By Owner Operator Math - Old School's First Podcast!!

I've been thinking about this whole conversation and want to add one more thing. Oftentimes people think our stance against leasing or owning a truck is particularly aimed at rookie drivers. While we think it is a pretty boneheaded move for a rookie, we also think it doesn't make any economic sense at any level of experience. We don't consider going from company driver to owner/operator as The Natural Progression Of A Driver's Career. Somehow people have confused this as a step up and a way to increase their pay, but the reality is that really good company drivers make really great pay.

The economics of trucking do not work out well at all for the owner unless you can gain the advantages of economies of scale. There's simply no way to do that as a small independent operator in a commodities business. I make way more than the average driver, and so can anyone who understands What It Takes To Be A Top Tier Driver.

I've been thinking about this whole conversation and want to add one more thing. Oftentimes people think our stance against leasing or owning a truck is particularly aimed at rookie drivers. While we think it is a pretty boneheaded move for a rookie, we also think it doesn't make any economic sense at any level of experience. We don't consider going from company driver to owner/operator as The Natural Progression Of A Driver's Career. Somehow people have confused this as a step up and a way to increase their pay, but the reality is that really good company drivers make really great pay.

The economics of trucking do not work out well at all for the owner unless you can gain the advantages of economies of scale. There's simply no way to do that as a small independent operator in a commodities business. I make way more than the average driver, and so can anyone who understands What It Takes To Be A Top Tier Driver.

I've been thinking about this whole conversation and want to add one more thing. Oftentimes people think our stance against leasing or owning a truck is particularly aimed at rookie drivers. While we think it is a pretty boneheaded move for a rookie, we also think it doesn't make any economic sense at any level of experience. We don't consider going from company driver to owner/operator as The Natural Progression Of A Driver's Career. Somehow people have confused this as a step up and a way to increase their pay, but the reality is that really good company drivers make really great pay.

The economics of trucking do not work out well at all for the owner unless you can gain the advantages of economies of scale. There's simply no way to do that as a small independent operator in a commodities business. I make way more than the average driver, and so can anyone who understands What It Takes To Be A Top Tier Driver.

Well said, O/S. When hubby and I ran teams 'for' an Owner Op, we came out better than him at the end of the year; no joke. My husband has been driving for MANY years, and STILL wouldn't entertain the thought. We do just fine, being company. No car payments, no house note, taxes up to date, and on and on. ..... And he's the only one driving nowadays, still doing WELL. No headaches at the end of the day, either~!

Yep, top tier drivers rule. . . and will retire as such~!!

Just throwing this out, don't kill the messenger...

I've been a lurker and contributor to this sight for years. I don't say much, but I read just about every post.

I started out as a company driver with Werner a loooong tome ago. I ran Dollar General dedicated, back before they had liftgate trailers. All unload by hand.

Then I went to a local company pulling tankers and pneumatics regional and OTR. Hauled gas, diesel, propane, butane, and ammonium nitrate solution in various configuration tanks (singles, doubles) and ammonia nitrate in pneumatics. Got sniped brom that company by another outfit, went local doing gas and diesel deliveries for a while, but had to get off the road the for family reasons. I did the 9-5 thing for a couple of years, occasionally driving on the weekends for farmer friends. But I still had an itchthat needed scratching.

Went to the oilfield, ran winch truck, vac truck, hauled heavy equipment, strung pipe on pipelines from North Dakota to south Texas and everywhere in between. General flatbed regional and OTR in the off season.

Finally, I ended up at a local company, 50 trucks, hauling regional dry bulk commodities (grain, salt, fertilizers) on hopper bottom. Loved it, found my niche, so to speak. Couldn't imagine doing anything different. But...

That damned itch still needed scratching... See, ever since I was a wee one, I alwats wanted to own a truck, have my name on the side of the door. Freedon from the man, etc., ad nauseum, add whatever catchphrase you want. I have a cousin who has been in the industry for decades, from management and overseeing 2000+ units to owning a single truck of his own. He currently runs a very successful brokerage company. His knowledge and credentials in trucking are impeccable. I asked his advice and he said I was the dumbest guy he knew for even considering it. Undaunted, I was still gonna do it. He offered to mentor me so I wouldn't get in to some shady scheme, and after a lot of hard work, I established my own company, got my own authority, bought a truck and trailer, and currently broker loads through my previous employer (who also said I was a dumbass for even talking about it...)

Long intro to say, yup a fella can make it work. BUT, you are married to that damn truck. You're either in it or under it. If you aren't, something WILL catch you off guard. If all of your ducks aren't in the same row, one will waddle off and wreak havoc.

My COMPANY has made over $170,000 last year. I PERSONALLY have only cleared $55,000. No more than I made as a company driver. That is done on purpose. Big money coming in, big money going out. Lost a turbo last week, cost me $6500. Ten new tires? Peel off fifty-two hundred Benjamins. Oh, every quarter, you better have your quarterlies paid, the IRS doesn't screw around. My business taxes are due the 15th of every month. There goes $900. Insurance? Yup. On the 2nd, without fail. $750... Oh, don't forget your occupation accident insurance. That's separate and mandatory. And an additional $177. UCR filings are due starting October 1st. Then vehicle registration. All said, between now and January 1st, approximately $11,000 is due to various governmental and insurance agencies. Just to stay in business for another year. Not counting maintenance and unforeseen repairs. Speaking of business... How good are you at taxes? Yes, you can learn. But when? On you 10 and 34? Probably should consider a good tax preparer, preferably one who knows trucking. Shall I go on?

It isn't for everyone. Honestly, most people who try will fail. Unless you have a rock solid business plan, sound advice, and a pocketful of cash, don't even consider it. Be a company driver, enjoy the work without the business BS. There is definitely some piece of mind being able to call the boss and say, "YOUR truck is broke down." rather than having to handle that yourself.

I'm still gonna keep scratchin' that itch, though. You know, stick it to the man, an all... ;)

The purpose (I believe, Brett please correct me if I'm wrong) of this website and forum is to help people get into the driving industry, learn the ropes, and be safe, productive, and profitable. This is the last I'll say on the O/O topic as I feel it doesn't serve the unique mission of this incredible forum.

Just throwing this out, don't kill the messenger...

I've been a lurker and contributor to this sight for years. I don't say much, but I read just about every post.

I started out as a company driver with Werner a loooong tome ago. I ran Dollar General dedicated, back before they had liftgate trailers. All unload by hand.

Then I went to a local company pulling tankers and pneumatics regional and OTR. Hauled gas, diesel, propane, butane, and ammonium nitrate solution in various configuration tanks (singles, doubles) and ammonia nitrate in pneumatics. Got sniped brom that company by another outfit, went local doing gas and diesel deliveries for a while, but had to get off the road the for family reasons. I did the 9-5 thing for a couple of years, occasionally driving on the weekends for farmer friends. But I still had an itchthat needed scratching.

Went to the oilfield, ran winch truck, vac truck, hauled heavy equipment, strung pipe on pipelines from North Dakota to south Texas and everywhere in between. General flatbed regional and OTR in the off season.

Finally, I ended up at a local company, 50 trucks, hauling regional dry bulk commodities (grain, salt, fertilizers) on hopper bottom. Loved it, found my niche, so to speak. Couldn't imagine doing anything different. But...

That damned itch still needed scratching... See, ever since I was a wee one, I alwats wanted to own a truck, have my name on the side of the door. Freedon from the man, etc., ad nauseum, add whatever catchphrase you want. I have a cousin who has been in the industry for decades, from management and overseeing 2000+ units to owning a single truck of his own. He currently runs a very successful brokerage company. His knowledge and credentials in trucking are impeccable. I asked his advice and he said I was the dumbest guy he knew for even considering it. Undaunted, I was still gonna do it. He offered to mentor me so I wouldn't get in to some shady scheme, and after a lot of hard work, I established my own company, got my own authority, bought a truck and trailer, and currently broker loads through my previous employer (who also said I was a dumbass for even talking about it...)

Long intro to say, yup a fella can make it work. BUT, you are married to that damn truck. You're either in it or under it. If you aren't, something WILL catch you off guard. If all of your ducks aren't in the same row, one will waddle off and wreak havoc.

My COMPANY has made over $170,000 last year. I PERSONALLY have only cleared $55,000. No more than I made as a company driver. That is done on purpose. Big money coming in, big money going out. Lost a turbo last week, cost me $6500. Ten new tires? Peel off fifty-two hundred Benjamins. Oh, every quarter, you better have your quarterlies paid, the IRS doesn't screw around. My business taxes are due the 15th of every month. There goes $900. Insurance? Yup. On the 2nd, without fail. $750... Oh, don't forget your occupation accident insurance. That's separate and mandatory. And an additional $177. UCR filings are due starting October 1st. Then vehicle registration. All said, between now and January 1st, approximately $11,000 is due to various governmental and insurance agencies. Just to stay in business for another year. Not counting maintenance and unforeseen repairs. Speaking of business... How good are you at taxes? Yes, you can learn. But when? On you 10 and 34? Probably should consider a good tax preparer, preferably one who knows trucking. Shall I go on?

It isn't for everyone. Honestly, most people who try will fail. Unless you have a rock solid business plan, sound advice, and a pocketful of cash, don't even consider it. Be a company driver, enjoy the work without the business BS. There is definitely some piece of mind being able to call the boss and say, "YOUR truck is broke down." rather than having to handle that yourself.

I'm still gonna keep scratchin' that itch, though. You know, stick it to the man, an all... ;)

The purpose (I believe, Brett please correct me if I'm wrong) of this website and forum is to help people get into the driving industry, learn the ropes, and be safe, productive, and profitable. This is the last I'll say on the O/O topic as I feel it doesn't serve the unique mission of this incredible forum.

Actually, that is pretty much what most of us have been saying. It is possible, IF you are a good business person. And it is a lot of hassle for not a lot more money.

In your case, it sounds like you have the business end down, and you realize you aren't getting rich. There are many (from reading other's posts) that think that $170,000 is their salary. You are smart enough to realize that it isn't, it is operating capital. Kudos and good luck to you.

Flatwater, I hope you know we wish the best for you, because we do. As a long time business owner, I definitely wanted to jump right into my trucking career as an owner/operator. I just never was happy with the numbers when I'd try to lay out a plan.

Right now the business end of trucking is sitting at a pretty good status. It's the best I've seen in the six years I've been involved. That's good for owners, but the problem is that it will fall back to those pesky mean averages. Here's my advice, and it's just good old solid country boy logic...

"Make hay while the sun shines."

Hang onto as much cash as you can while the getting is good. There's going to come a time when you need it.

Flatwater, could you clarify something for us? You said your company made $170,000. I just think you need to define that word "made." Are we talking gross receipts? I know you're not talking net profit. That would be unheard of for a one truck operation.

Great post Flatwater. I applaud your honesty and willingness to share. Yes you do in fact help to prove everything we've been saying here. All of that risk, worry, and headache for the same or even less money than some company drivers make. Thanks for coming forward with your info.

As long as you're happy scratching that itch, who are we to judge? However, at some point you're going to have to admit to yourself, and perhaps you already do, that you aren't "sticking it to the man."

The man is in fact still in control, and sticking you with the liability. It sounds like you're coming to realize this.

Don't take this the wrong way. I wish you nothing but success in your endeavor.

Flatwater your honesty is greatly appreciated. Very provacative and enlightening post. Thank you!

I love trucks...really do, but fortunately I do not have even the slightest itch to own one.

Best of luck to you in all your endeavors.

I have to say that I really appreciate this site and the helpful people on it. My wife and I are nowhere near becoming owner operators. Heck, we haven't even moved back to North America and renewed our driver's licenses yet! But going o/o in the future was within the realm of consideration after spending some time as company drivers. This thread and the associated podcast had a lot of the info we would have been looking for to help make a more informed decision. Hearing some owner operators talking gave me an inkling that they were talking more about revenue than end of the day profits. Speaking just for myself, the marginal increase in pay is not even remotely worth the risks and liabilities.

Having Old School guest host the podcast was great too. I hope we can hear the wisdom of other experienced drivers here as time goes on. It's also nice to place a voice with the words people write on this site!

Flatwater thank you for your response. I know first hand everything your speaking of. The business end grips me, but a necessary evil to stay on top of and that requires personal discipline. I pay an accountant for the tax prep, I pay a bookkeeper to do the weekly keeping up. Is that overkill, yes it is. However it gives me peace of mind, and too me that is priceless. I have a 3 and 5 yr business plan in place and I have the discipline to stick to it. I also am fully aware I am an anomaly in the industry. I am retired, have a great retirement benefit, and honestly trucking for ME is more of a hobby. I could walk away today and still be fine. However I have spent the past 35 yrs pre planning my life to make this possible for me. For me its not about the money, its about personal fulfillment. That is why when this topic comes around I always support this sites opinions on it, because it is based on facts not mere opinion. This is not for everyone by any means. Everyone here wants nothing but success for folks. Sometimes that requires some cold hard truth about things. That is why it is so successful because you will never hear what you want, you will hear the truth. When I did it Brett and I had personal discussion, because I respect him 150 percent, and I was not going to disclose what I was doing because I didn’t want to trigger the topic. But once it was I got in, because I felt a personal need to be supportive of Brett, OS, and the other great folks here.

It's common sense ... never spend more then you make ... with either your home or business... it's simple math ... and these leasing offices will try to sell your just about anything...

My biggest problem was book keeping... they offered for a small fee to take care of everything... well they did a great job of that... the first year i had them do my books i found out they took credit for about 75,000 dollars worth of fuel I bought and tried to tell me I was getting it back with my fuel surplus ... it doesn't work like that...

anyway I watched my paperwork very closely ... to make sure they were not ripping me off ...

they will make you all these promises ... but only you can make it happen...