Love The Forum But.... It's A One Sided Pancake When It Comes To Company, L/O, O/O!!

So many are for just promoting company driving, and to hell with running a business it seems. It was stated in another thread that the ownership business side is dismal at nearly a 3% margin...wow, that's why there are no O/O on the road doing well for themselves I guess. I just wanted to say, that keeping expectations realistic and understanding the pitfalls (company drivers, you're included here) then it is easy to understand that no one company is the same, and no one lease is the same, and no one... you get where I'm going here. It's funny, I came here with an idea that this was a honest board, and not taking anything away from respectful people here... but as far as the O/O, L/O goes... they are all sharing the super trucker myths. Fact is, without a constant savings plan, and no understanding of how to leverage financial products to your benefit... you are just playing addition and subtraction with relatively predictable and static sums and differences. There is much that goes into owning any business, and a properly functioning savings is paramount to success. Many former O/O's, L/O's that I have talked to that failed... lost sight of their hands when the dollar signs grew bigger (they lived outside their means and it caught up with them), in effect, ruining their business... or if you heard them talk about it... "they were scammed from the get go" . My response you might ask - "Right right.... of course you were, that's the only possible explanation for your failure."

It's funny, I came here with an idea that this was a honest board, and not taking anything away from respectful people here... but as far as the O/O, L/O goes... they are all sharing the super trucker myths.

I'm not sure if you're thinking you're at a different forum than you are or what but you can be d*mn sure there's no Super Trucker Myths being spread here. We push hard to keep people away from leasing or buying trucks so I'm not sure what you're referring to.

Here here, there is a knee-jerk reaction here to L/O & O/O that is quite obvious ... there is a lot of truthful information about the pitfalls of leasing (especially for newbies right out of the gates) but there is two (or three or more) sides to very issue ... personally, I chose to lease right away (no company driving for me) and I compared notes constantly with Ken C. who went company ... both for Prime, Inc. I did decent in terms of money (some great weeks, some not worth mentioning) but the main difference I noticed was the level of control the company had over Ken that they didn't exercise over me ... he often HAD to make side trips to fuel in order save a few pennies per gallon (the economy of which was questionable in my mind) and had virtually NO choice on routing ... I (on the other hand) fueled where I wanted (good guidance on pricing and discounts was always available) and selected my OWN routing as I was responsible for paying for fuel and was not beholden to someone elses' judgement in either matter ... I could also turn down loads if I wanted (never did except one to the Michigan during a horrendous winter storm) while Ken was force dispatched to the most ungodly places during peak winter months ... he recently went lease himself but it's gonna be a while before he decides if it was worth it or not ... to each his own, I always say ... I had to turn in my lease truck as the result of having a medical procedure (a "stint" in my artery) because DOT disqualifies a driver for 90 days after such a procedure ... however, I am free to start another lease with Prime when I have finished my penance to the DOT ... we'll see what other opportunities are available in 60 more days ...

Jopa

So many are for just promoting company driving, and to hell with running a business it seems.

Matt, you need to do some more reading in here before you jump to your conclusions. Brett and I both have been business owners, as many other members in here have. We are pretty big on entrepreneurship. I ran a custom electrical sign manufacturing business for thirty years. I decided to give truck driving a try after that. I love business, I love the challenges of it, but I also want to make a decent profit at it after putting in all the effort it takes to keep it going.

Unfortunately many people take your opinion about us after seeing us discourage rookie drivers from trying to break into the L/O or O/O business. It is a risky business with a very high failure rate. I would love for you to jump in there and give us an annual report each year of how you are doing. I think it would be an eye opener for many of us, including yourself. This forum primarily helps rookies or folks who don't even have a clue about how to get started in this business learn the initial steps they need to take to make a decent start in this career. If you think leasing or owning a rig is a smart move for a beginner, then your research has definitely led you down a primrose path. We are simply trying to help folks avoid a major heart wrenching career move and possibly a bankruptcy.

but as far as the O/O, L/O goes... they are all sharing the super trucker myths. Fact is, without a constant savings plan, and no understanding of how to leverage financial products to your benefit... you are just playing addition and subtraction with relatively predictable and static sums and differences.

I'm not sure what financial products you are referring to because there are many available to business owners. But I have a feeling you are referring to "factoring". If you think that is a wise choice you are headed for trouble. Factoring does allow for a much easier to control cash flow which certainly is important in any business, but it also takes away the already small profit margin you are struggling to reach. So, if you have some great ideas about "financial products" to help truck drivers how about being a little more specific with us so we can make sure the facts are being presented in an honest way.

I absolutely love your comments about a savings plan, because that is exactly what I have told so many people in here who have decided to go the L/O route. It is paramount, not to your success, but to your survival as an O/O or a L/O to have a methodical savings plan in place. But here's the kicker - that plan has to be in place because you are going to need that money, probably sooner than later. This is one reason why so many fail at this business. They come up with some excessive unexpected expenses that they cab't handle and then they are out of business - just like that, almost overnight. That money is not profit, it is merely banked against the time that is surely coming when you will have to use it to stay afloat. In my opinion that cannot be considered as profit. I don't care if you've managed to save fifty thousand dollars, because by the time you have done that you are going to seriously be needing to replace your truck - a major capital expense which makes that big fat savings account seem pretty ineffectual.

We have several past owner/operators in here who made a go at it and were successful, but after all the years of doing it they came to our same conclusion, which is: why take on all the added responsibility and stress when you can make very close to the same amount of money as a company driver who can enjoy his career without all the added stress that comes from being the boss also?

We are happy for you if you want to go that route, just be forewarned that it isn't for the faint of heart or the shallow pocketed. This business has a harsh way of bringing on a day of reckoning, just when you least expect it.

Hey guys, thanks for the reply's, and I apologize for the poor choice of words or lack thereof. I respect all of your opinions!

I wasn't speaking of factoring, that is essentially selling accounts receivable to a third party to raise some capital... but selling it at a discount. I couldn't vouch for this as I've never used them, can't see the point honestly... but I'm sure their is some niche to certain industries where it could be applied well. I was speaking more on structuring a savings plan; creating capital through money market mutual funds, of course, funded by a portion of your savings. It sounds intimidating to some, but I can honestly state I have had great success in my personal life using mutual funds to leverage against a static income. I am making more on my investments than I do punching the clock as a ACI, PCI, NPCA 3 QC Inspector. Should equipment (depending on your industry) or break down... and they do and is to be expected... having a way to deal with the cost is what seems to burden most people regardless of industry. It is a common theme among young entrepreneurs to well versed men of business. Machines break down and customers will guarantee, the least amount possible. I guess I see it in trucking as I see it elsewhere, the less liquid capital you have available, the higher the odds of failure are. There's not much getting around it. That's what I meant yet conveyed poorly. I do not claim to be saavy in public speaking by any stretch of the imagination, so don't judge me to harshly please. The phrase "super trucker" was a poor choice of words, again... I apologize. I certainly did not mean any disrespect to any of you who have voiced out against L/O, O/O for new drivers. I understand what risk you are trying to convey and do not want to discredit that. My wording seems somewhat formal, but I type with an open mindset. I should have said what Jopa stated... and that would've been, "There seems to be a knee-jerk reaction to O/O and L/O."

Again, thanks for the replies guys... it's the most action I've had since coming to this forum, not the "action" I was wanting though (insert animated smiley faces here)!!

To provide some type of example for anyone following... here's a good video to give a brief understanding. There are many options such as federal and tax exempt state exchanges... Primary and Secondary money markets... etc https://www.youtube.com/watch?v=iAcH892HHFo It is hard to use a broad brush to explain all the ins and outs... that requires personal research but in short. It is better than having money setting in a single savings account. Separating and diversifying the types of investments (mutual funds being short term safe investments), you can maximize your earned interest. Like most things, you will need to find what suits your financial situation the best... it isn't a "one size fits all" thing, but there are many options. I personally recommend mutual funds... but they aren't for everyone. To keep it related to trucking, if you have $20,000 in a savings account for maintenance etc... you will gain by whatever percentage rate your financial institution is paying. By using mutual funds with a portion of your savings (google "ladders" for certified deposits), you can allow yourself more liquid capital than just using standard savings plans. CD's (since Ive brought them up) is also a nice financial tool to use with certain tax advantages as well. However, using them for a business savings plan should be done with caution; again... I'll refer you to "ladders" for a CD holding business capital. Just trying to provide more specifics. I'd be happy to speak with anyone who is considering any of these options; I am not a finance professional... yet I can refer you to a damn good one who will work your dollars hard for you, if need be!

It takes a sort of self discipline, but investing in proven financial instruments should come with relative ease with a little guidance and explanation what your money is doing and how it's doing it.

We are happy for you if you want to go that route, just be forewarned that it isn't for the faint of heart or the shallow pocketed. This business has a harsh way of bringing on a day of reckoning, just when you least expect it.

I do not want to go that route this early, I couldn't justify risking a piece of my financial house on the idea of a someone else's dream. But, I am looking long term, and I know I do not want to be punching a clock into my later years. No offense to anyone that does, I just know that is not what I want for myself.

I personally know a few O/O's and a couple of them have "failed" (your definition may vary), but they did whatever it was they needed to do, got back out and are doing better than before. One is a very close friend of mine, he's on a reefer run right now from Port Richie through PA paying around $13.00 a mile (if you averaged it out by the mile) but he has his own authority, his broker does him right and he isn't spending his business funds on his personal life. That was a lesson he learned the hard way, and I can't hear enough about apparently (he'll repeat it about once every couple months).

Matt, I fail to see the connection between understanding how to use mutual funds as an investment instrument and being an owner operator can help reduce the inherent risks involved. How does that investment portfolio help you wrestle out of your broker the money he owes you? Or how does it keep you from sitting for hours of wasted time on a farm in California waiting for that fresh load of produce to be ready? The troubles that plague the O/O are not remedied by having an investment strategy of mutual funds.

(mutual funds being short term safe investments

80% or more of the mutual funds out there do not meet or exceed their benchmark averages. In other words, you'd make more money buying index funds 80% of the time versus a mutual fund that strives to beat that index. Like in most things you find these days, even the supposed "professionals" aren't very good at what they do.

There seems to be a knee-jerk reaction to O/O and L/O

I've put almost 22 years of thought into it and I still feel like buying or leasing a truck is a horrible business to get into. And as long as trucking remains a commoditized service industry it will continue to be a horrible business to get into. It's certainly not a knee jerk reaction. It's a well thought out opinion based upon basic math and sound business principles.

And keep something else in mind about owning a trucking business. There are thousands of people that have spent decades running trucking businesses. They've considered everything imaginable to help them make an extra penny per mile. People who haven't run businesses tend to very much underestimate the competition level that business owners face. We've had others come in here thinking they can just drive a little more slowly to save money on fuel or do the mechanical work on their own trucks to save money and that's going to make the difference for them. You've mentioned investing your savings as part of an overall business strategy. These strategies and ten thousand others have been employed for decades. They're nothing new and they're not going to change the fact that you're facing an industry with high litigation risk, high capital expenditures, and a 3% profit margin. An industry so competitive that you can combine the 10 biggest players in the game and they still wouldn't account for 1% of the trucks on the road today. It's going to take a heck of a lot more than driving with a light foot or investing in mutual funds to survive in this industry.

Anyone get the feeling that this original post might be a fishing expedition? Just wonder'n ...

Jopa