It's a Team's Life
Expo Workshop Success as Owner Operator
If you missed the Expedite Expo in July, we were honored to be asked to do a workshop on how to be successful as an Owner Operator In a Straight Truck. We will cover most of the items we did in the workshop.
In this blog we will try and help someone that is thinking of becoming an Owner Operator and wants to be successful at it. We will cover everything from expenses, cost of equipment, credit, and financing, to whether to incorporate, lease, or get your own authority, and more.
Let’s start with: have you been in the industry? Have you run or are you currently driving for a carrier as a company driver or driven for a fleet owner? If so, you have an idea of what it should cost to run a truck. Keep track of the expenses that you can. You know how many miles you drive. What we are talking about what is the expense per mile and we mean every mile. Not just the loaded miles or deadhead miles: each and every one of them. So, for us, we are in a Straight Truck (Expediter) and for example let’s use cost per mile as $1.25 for every mile we drive.
From that example above this would include every expense you have for the truck. Here is a list of some but not all of the expenses:
- Truck Payment
Now that is a very short list. We have many more but those turn out to be our largest ones. You need to know those and all of the others to figure out your per mile cost to run the truck.
Let’s look at what a truck costs to buy. The figures we are going to give you are for a Straight Truck. As you will see they are expensive. We will cover class 8 trucks in our figures.
- New Reefer $355,000
- Used Reefer $140,000
- New Dry Van $270,000
- Used Dry Van $80,000
Those prices above are for a very basic truck. Not many bells and whistles on it. The more you add to it the more the price goes up.
In choosing a truck it's all up to what kind of freight you expect to haul. Let’s for example you plan on hauling automobile parts. You most likely would not want a reefer truck. You would never use it for the part and it would be an expense you would not have to spend.
Come into this with good credit. If you have some bumps in your credit report work to get them ironed out. The better your credit is you should be able to get better finance rate.
What we have done with our financing is we bank with a small bank that takes care of farmers. We have built a relationship with them and we had to explain what kind of truck we were buying and they kind of money we could make. Once they understood the part of the trucking industry, we were in they gave us a loan on the truck. We have found it very easy to work small banks over the huge national or worldwide banks.
Check with your financial advisor or tax advisor, but we suggest that you incorporate. Either a chapter S or an LLC. Talk to them and see what best fits your situation - not just one size fits all. You need do your home work on what would work best for you.
Should you lease on to a carrier, or get your own authority? Our first thought is you should lease on to a carrier. Why? They do a lot of back-office paperwork for you. Some examples are they file your IFTA, get your permits, handle a lot of your truck insurance, etc. Another thing is that a carrier will have customers with freight. You would not have to go out and find customers and freight.
Before becoming an Owner Operator ask a lot of question to people you know that are already Owner Operators. Educate yourself and find out what they think and if they any advice on becoming one. Go to truck shows and attend that workshops they provide. You can learn a wealth of knowledge by listening and asking questions.
Start building a peer network. This is where surround yourself with people in and around the industry that you can contact to ask questions. Most of the time what you are trying to do or figure out, someone has already done. No reason to take forever to figure out when a fast phone call to someone in your network can help you out.
We would like to leave you with one last thought. You only get one chance to make a first impression. Dress for success, keep your equipment clean and well maintained, always keep a level head, and remember, the customer is always right.
Here is a screen shot of our presentation slide:
We hope this helps you in some way if it is worth it to you to become an Owner Operator.
Sandy & Stephen
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