Advice, Owner Operator?

Good for you! I hope it all works out just the way you've got it planned, and if it does I want to come up there on that mountaintop and sit down with you and have a good visit over some nice rib-eye steaks!

Hey guys sorry been bust my butt to get this last load in before xmas. Just wanna say I appreciate all the input.. Hey pj I got some questions for you when you can find the time.. Can I send you a personal message on here? Did Brett fix that yet

OS that sounds like we got another goal to achieve. Karl feel free to contact me anytime. I didn't know it was broke. My email is pat.jerrold@gmail.com if you want to use that.

Reach down low and grab tight and ask yourself is this for me? If you're questioning it then you may want to hold off. You see im a rookie just like you. Im leasing a truck. If you can't drive hard dont do it. Are you in the right lane or the left lane? Weigh your options and think logically. As a owner op youll spend a lot of time passing company trucks

It has been proven scientifically many times that people will often believe whatever they want to believe regardless of the fact that their beliefs directly contradict known facts. I've never seen that more prevalent than with people who want to own a truck and be their own boss.

The 3% margin thrown around on here may be correct for the large fleets but I can tell you that a small owner operator that knows what is going on can make well above that

...and there it is again. Do you sleep well at night reciting this mantra? Because it's complete garbage. Small owner operators are just as much a part of that number as large companies. And please, give me one example on Earth where a small company has an advantage over a large company when it comes to a commodity-type business with razor thin profit margins? The oil business, airlines, wholesale retailers (Costco, Sam's club, etc) - where do you see small companies having an advantage over large ones in those arenas? That makes no sense at all. The large companies have every advantage with great financing behind them and hundreds (if not thousands) of skilled people covering all aspects of running a business. They have experts in sales, freight brokering, maintenance and repair, routing, software development, load planning, safety, and finance to mention just a few. They get volume discounts on all of their largest expenses - fuel, tires, parts, etc. But you say one guy with a shiny truck can overcome all of the disadvantages of size and expertise, right? Well I'd like to know how that strategy works.

Like Old School said, the law of averages will catch up to you. Commodity-based industries often have large boom and bust cycles. Things go great for a while, then the walls come crashing down. If you survive and you can pull yourself out of the rubble, things may go well again for a while. Right PJ? But in the end you can't escape from the characteristics of the industry you're in.

Look at the airlines - very similar - commodity based pricing. Right now the airlines are booming. But just a few years back several went bankrupt. Follow the industry throughout the decades and you'll see large cycles where everyone is making a killing for a while and then half a dozen companies go bankrupt in a three year period. It happens over and over again. Trucking is no different.

Guyjax leased for a couple of years and had every advantage you could have. He had over a decade of experience in trucking, ran team with his brother-in-law, and they almost never stopped for anything. They ran and ran and ran. After two years he realized he wasn't doing any better than he did as a company driver and went back to that and stayed.

Old School owned and operated a small fleet of trucks as part of a business he owned and operated for years and years. When he became a truck driver himself he went in as a company driver and stayed that way.

PJ is pretty new to trucking and even more so to leasing but he's already faced a pile of problems that he was barely able to get through. Now things seem to be rolling for him but there is no "catching up" when you're in a business with 3% profit margins and tight controls on how hard you can run. What's lost is lost and all you can do is hope things will go better in the future.

Starcar and her husband owned a truck for quite a few years and she'll tell you that finally getting rid of that money pit was one of the best things they ever did. They're going to stick to being company drivers.

So people with tons of experience as truck drivers and business owners are telling you from their personal experiences that the numbers simply don't work over the long run. I've been a business owner myself for many years and I've followed the business world closely for 15 years now. I've also been in the trucking industry for over 20 years now and I'm telling you the same thing - it just doesn't work over the long run. But hey, I understand that people are going to believe what they want to and do what they want to and I have no problem with that. As long as I share what I know about it I won't feel guilty if you choose to do it anyhow. So as always I'll tell you what I know and you do with it what you like.

As a matter of fact, I sleep just fine. If you took the time to read and understand what I said, I said you need to specialize. Pulling a box only will not do it. There are several people that I know that make well over that 3% margin BS and have been doing it since 1978 - 1985. It is about positioning yourself in the market correctly. Heck all three of them charge more than others in the area. The smallest guy runs 2 trucks and the largest runs 15. They can not compete with the mega's on price but the mega's can not compete with them on service.

Guyjax was leased and you obviously did not notice that I said that would not work.

Old School says trucks are money pits and I agree. Maybe he has posted it but I have not read how that or what that business was. He was shipping his own product. There are other reasons besides the trucks that he is no longer operating that business.

PJ is leased also

Starcar, I don't have all the info on their reasoning. The only thing I am aware of is they pulled flatbeds but did they have their own authority or were they leased? I think they had their own authority. It is my guess they gave it up because of the regulations and compliance headaches more than the money VS hours worked.

You are asking me to believe 4 people that changed because of some reason or another to be company drivers that are on the internet when I have personal family friends that have been in business 30+ years and do just fine. I am driving for the guy that runs 15 trucks right now and he does not have enough trucks to keep up and we dead head all the time up to 300 miles. The other thing he does is repair his trucks. What I mean is things like I drive a 17 year old truck but it runs better than new ones. He NEVER buys a new truck and I don't think that he has ever bought a new trailer with the exception of the beam trailers. Now that I think of it, none of these guys has every bought a NEW truck or gone into debt to get a used one.

About 90 percent of trucking companies and owner–operators have fewer than six trucks. The megas can not cover all the loads. They compete on price where the people that I know compete on service. There are 1.9 million trucks operating and that means that 1.71 million are operated by companies with less than 6 trucks.

There are certain things that you need though. The biggest and most important thing is capital. Most fail because they don't have the capital to start properly and thus get behind the 8 ball right from the beginning. You need to have 3 - 6 months or more of operating expenses. It would also be nice to have a mentor, I am lucky in that area. Debt is the killer of the all business. If you can stay out of debt that gives you a leg up.

There is a difference between airlines and trucking, product still needs to move but you do not have to fly. Airlines are not a necessity and trucking is. Cutting costs and not flying is things businesses have done for the last decade or longer. You do not have that choice in trucking, the product has to move and unless you have a rail spur into your plant you need a truck. Bad comparison on your part.

You see it all the time where a smaller trucking company has the advantage over the larger one. Just look at all the companies that have gone away because they were purchased by a larger trucking company that wanted the advantage they had in their market. Look at how Google and Microsoft have grown. They did not have an advantage in several markets so they bought the smaller competition.

To make it anywhere, in any business, you have to find your niche. Tough to do with a box but it can be done. That is what small companies do, they find a need and they figure out how to fill that need.

You go ahead and drink your "can't compete with big business" koolaid if you want to. This site is about the truth of trucking and part of that truth is the owner operator. How about instead of telling people that it can not be done you instead give them information that they need to succeed. It can be done, it is done every day but if you think that you can go into business with no money you are kidding yourself. Some will make it but most will fail just as with any other business venture.

Things such as leasing a truck.... People say that a new truck breaks down less than an old one. I say BS because out of the 15 trucks that we have, we have had to tow 2 of them back to the shop and both were newer trucks than mine... Well you can write the cost of the lease off! Yeah you send $24k to the leasing company a year to keep from sending Uncle Sam say $7,200 just because you think a new truck is better on maintenance. It may be but for $16,800 difference in cash flow I can replace the transmission and both rears. In 2 years you have over 30k and in 3 years you have over 50k that can be used for repairs.

I think Pat makes some good points. The MOST important one being the need for capital. Having owned businesses, this is the main reason most small businesses fail. I've also noticed that when recruiters give their sales pitch for new drivers they point out that the company is debt-free.

Pat's point about specializing is something (I think) new drivers ought to read as; you better be in a place where there's a niche with a need and you'd better be able to fill that need. If I'm reading Pat correctly, it sounds like being able to switch from one type to another (e.g. from flatbed to box, to refer) would be helpful in case local markets change and there's a new need where an old need fades.

Thanks to all of you for the back and forth on this. It may be frustrating for you, but helpful for me.

Since we are having a lively discussion on business, let me just clarify a few things that I see in this discussion.

I completely agree with Pat about niche markets or specializing in something is the way to succeed and set yourself apart from the competition. There comes a problem with that though, and that is that there is almost always a limited time slot that specialized markets are good. Pat is correct when he says that there were other reasons than the trucks why I decided to get out of the business I was in for thirty years. I had some special skills and knowledge that enabled me to have a specialized business that no one else in my area was good at. There are so many variables to this though - things change, technologies develop, economies change, even populations and demands for your product or service can change. With new developments in technology it allowed others to become proficient at what I had specialized in, and after that started happening we found ourselves constantly competing on price instead of service. That is when I decided I wanted to do something else - it took all the pleasure out of it for me and much of the profit. I refer to that time period often when in these discussions because I did learn a lot about owning trucks during those years.

Any time a person finds a niche market or can specialize in something it is good, but it also means that someone else will eventually figure it out also. Business is tough no matter how you slice it, and many people lose it all just trying to do something they love and enjoy. People often times get all up in arms about our position on being Owner/Operators, but the truth is that we know how tough it can be, and we are merely trying to help rookies dodge a bullet that they might not realize is coming their way. I'm all for the American Dream and I enjoyed my time as a business entrepreneur, but I also love having less headaches and getting a good solid paycheck for my hard work each week.

The trucking industry is a cut throat business - I remember when the oil field work was wide open to individuals who had the willingness and the connections to get in there and work their tails off - they could make a fortune. Now days we are seeing carriers like Schneider go in there and provide the tractors to pull Halliburton trailers and equipment around and the prices have fallen way down because of it.

We don't hate, or have anything against being an owner operator , we just know it can be treacherously risky for the uninformed, and the way that most of these companies push their leasing programs onto unsuspecting rookie drivers is unconscionable. We simply try to sound the alarm for the unwary, but it usually puts us in hot water with the ones who have that as their goal.

If you are going to own your own truck then you need to specialize. To me a true owner op is someone with their own authority. Anyone can pull a box around. The 3% margin thrown around on here may be correct for the large fleets but I can tell you that a small owner operator that knows what is going on can make well above that. People say that you barely make above a company driver with all the headache. Not true at all unless you lease to someone. If you run truly independent you can make much more and if you specialize there is even more to be made.

Now even with all that, if you suck at sales then stay a company driver. It takes more skill than just driving a truck to make it in the world of trucking as an owner operator. If you are the kind of person that could not sell water to someone stranded in a desert then owner op will not be for you. If you can sell ice to an Eskimo but can not keep the paperwork straight enough to wipe with then owning your own truck is not for you. To have any chance of succeeding in a greater than survival mode (making the company driver money or less) then you have to have a little of both skills, being able to sell and being organized.

Take my old boss for an example... Very good at sales but sucked at paperwork. I never even took a drug test for him. Well he is now out of business but still has the note on the trucks to pay. Only took him 3 years to run it into the ground. He also had the thought that the drivers needed him. Well he found out quickly that did not matter. He helped me get my license and thought I owed him. I said really? After driving 5 times and you having to fix stuff on the truck so they would allow me to take the driving test? LOL The rest I did on my own.

I’m new on this forum so I don’t know if I’m doing this right or not, but I came here for some advice and tips about trucking of course lol so I’m a local driver, I haul fuel I make decent money, but I’ve always wanted to try as a owner operator to make more and also be in charge of myself...input anyone ?

This forum has historically been to guide the new person into their first company after school. And has been pretty much firm on being anti lease/ OO.

With that being said, it's my personal feeling that if you truly want to be in business as a trucker, take some business classes, and do your research. Then research even more. STAY AWAY FROM LEASE / LEASE PURCHASE PLANS !!!