A Successful Business Starts With a Plan
Kevin Rutherford's background includes truck driving and fleet ownership. This article is focused on conventional trucking, but most of the information contained here is applicable to expediting ownership as well.
Let's start this article with a little quiz.
When getting started as an O/O your first step should be to?
A. Buy a truck
B. Choose your type of operation
C. Form a corporation
D. Ask your brother-in law what he would do.
E. Do all of the above in the same week so you can be trucking as soon as possible.
You might be surprised to learn the correct answer as you keep reading. We are going to cover this important issue in a series of articles taking you step by step through the entire process of becoming an O/O. We will also be referring you to some of our other articles for more details on specific topics. So let's get to it!
Most people who become O/O's don't have a specific plan on how they are going to run their business. It's been said that by failing to plan, you are planning to fail. This is very true when it comes to making the transition from company driver to O/O. The number one key to success is treating your new venture as a business and having a plan in writing before you ever spend your first nickel. (Or quarter due to inflation)
The very first step in becoming an O/O should be to decide what kind of operation you want to run. Everything else will revolve around that decision. Some of the questions you want to ask yourself are:
1. How long do I want to be away from home?
Usually, but not always, the longer you are away from home, the higher the gross revenue will be. O/O's who run 48 states and are gone 4-6 weeks at a time tend to have a higher gross revenue than someone who runs regional and may be home every weekend.
This distinction will also become a factor when you spec your equipment. For the 48 state operation, you will probably want a larger sleeper with more storage space. In a regional operation, you may not need a larger engine or certain accessories such as a jake brake depending on what part of the country you run in. Those are just a couple considerations that stem from just this one question.
2. What part of the job do I like doing most, or least?
Do you really like the driving part of your job? Is a great day for you one where you put in your full 10 hours behind the wheel with only a few short breaks? Or do you prefer multiple stops and meeting lots of different people during the week. Do you like dealing with unusual types of freight? Is reefer your thing? Maybe tanker or dry van?
Some operations require less driving and more time loading and unloading or setting up. The list goes on and on. Take the time to decide what it is you really LIKE to do.
3. How much money do I have to invest in start-up costs?
You may have to start your business doing something different than your ultimate goal because of your financial situation. Part of your business planning will involve goal setting and deciding where you want to be one year, five years and ten years down the road.
4. How much money do I need to take out of the business to support my family?
This important consideration is often overlooked. You have to structure your business so that you have enough profit left over to support your chosen lifestyle. You may decide to lower your standard of living for the first couple of years to get your business off the ground. These are just a few of the many questions you need to answer as you start to set up your operation.
After you have decided on what kind of operation you are going to start, the next step would be to find a company to lease to. The best way to get started on this task is to go through the ads for O/O's and identify the companies that will fit the type of work you have decided on.
This website is a great resource. Make a list of all the possibilities and put each company on a separate sheet of paper. Then you can start to investigate each company and keep notes on that sheet so you will be able to compare contracts. Next, contact these companies and get as much information as possible over the phone. Ask them to send you any information they have, including a copy of the contract you would be signing.
Other questions you will want to ask are: How does their compensation package work? Is it mileage? If so, what is the mileage pay, loaded and empty? Do they pay for anything other than mileage such as detention time? What types of expense do they pay, scales, tolls, base plate? There are no right or wrong answers to any of these questions, but you need all of the answers to make your decision.
We have developed a checklist to help you with this process call our office at 866-438-7825 or visit the website for a free download www.43truck.com
You will also use these numbers to do projected CPM's or cost per mile estimates. You can actually start keeping track of the CPM on the truck you currently drive. This will help you become more familiar with the issues involved in being an O/O.
Once you have as much information as you can get, narrow your choices down to 3 or so. At this point, your best bet is to go out and do some leg work. Find O/O's who are with these companies. The more people you can talk to, the more informed you will be.
Ideally, you would try to find someone who has been with the company for more than three years as well as someone who is relatively new. Also you should look for an O/O who is happy with the contract as well as one who is not so happy.
Stay tuned for the next part in this series coming soon.