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New Article From Old School About Buying Or Leasing A Truck

Topic 20161 | Page 3

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Brett Aquila's Comment
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However, If a person is doing something they love, and can pay their bills, and provide for their family, than they are a successful business owner.

Well I guess that depends on what you mean by "providing for your family. " Providing what? Providing a $500,000 house, three cars, and a vacation home on the beach? Or squeaking by in a $75,000 house with two old clunkers in the driveway buying clothing from the thrift store?

There is no set standard, or anything that truly defines what success

In my opinion there is indeed at least one standard you should set and it's based upon simple business economics and logical thinking. If you own a business and your profits in the end are about equal to what you could earn as an employee doing the same job then you're not succeeding as a business owner.

If you own a restaurant and your profits are $40,000 at the end of the year, and an experienced chef can make $40,000 working at a nice restaurant, then you're failing as a business owner. You're taking on entirely too much risk, too much work, putting in way too many hours, and making way too many sacrifices while getting nothing for it in the end. That's not success. That's a failing risk/reward and work/reward ratio.

Think about it. An experienced chef takes off his hat and goes home to relax after his 40 hour work week. He doesn't even think about the business. Then of course he gets to go on a couple of weeks of paid vacation each year, gets a 401k, health insurance, and takes no financial risk in the process whatsoever. He also manages nothing but his own job.

Yet this chef makes as much as the owner of the restaurant who is putting in 90 hours a week, couldn't dream of taking a real vacation and certainly wouldn't get paid for it, has no company benefits, has to manage personnel, marketing, accounting, and a million other tasks, and has his financial future at stake with no safety net whatsoever.

I totally get what you're saying....."but I'm happy owning a restaurant that makes $40,000/year in profits".......I get that. But in the grand scheme of things you've taken on a tremendous burden, given up all kinds of wonderful perks, and have absolutely nothing to show for it financially in the end.

And quite honestly I think that approach to business is going to fail in the long run. In business you have to keep growing and you can never settle for where you're at, because you're competing against people who aren't settling and aren't stagnating. Eventually you're going to be overrun by your competitors.

I've talked many times about a small business seminar I went to years ago where he warned us about staying away from commodity businesses, like trucking. One of the many other great points he made quite clearly was, "In business, if you're not growing, you're dying. You can't survive standing still."

So people may say, "Hey, I'm happy as a business owner making a worker's wages." But what I hear is, "Hey, I'm going to enjoy this while it lasts and when the competition inevitably eats me for lunch I'll say I was successful anyhow and move onto something else."

I can agree to disagree about this. I'm not trying to force anyone to agree with me and I welcome all opinions on the matter. But from my experiences over the years I've learned that if you think small in business you'll be dead before long. In the military you don't train and prepare in hopes of squeaking out a victory. You train and prepare to dominate and overwhelm your opponents completely. In sports you train and prepare to dominate and overwhelm your opponents completely.

In the business world your competitors, and sometimes the people you think are your allies, are training and preparing to dominate and overwhelm you completely. If you train and prepare with the notion of "just squeaking out a living" you're going to be dead before long.

OWI:

Operating While Intoxicated

Brian M.'s Comment
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So far this year leasing I've made 157,000 revenue my fixed and variable costs are 82,000 so before income tax I've Made 67,000 and I have my settlements to prove this. I have less than a year to complete my obligation and at the end will receive a completion bonus which at this point is north of 24000. So as you know I don't agree with this article. Their are risks just driving down the road.

Daniel B.'s Comment
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Am I allowed in this thread?

smile.gifsmile.gifrofl-2.gif

Steak Eater's Comment
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So far this year leasing I've made 157,000 revenue my fixed and variable costs are 82,000 so before income tax I've Made 67,000 and I have my settlements to prove this.

That math doesn't work. $157k minus $82k leaves a balance of $75k.

Brian M.'s Comment
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Sorry your right it's a little late and my math is off. Sorry I quickly looked at my settlement the first two numbers of 157,000 and 82000 are correct

Old School's Comment
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So as you know I don't agree with this article.

Brian, I have no bone to pick with you, and I am thrilled with anyone's success - especially yours, because I know what a hard working guy you are.

But if I remember correctly you are running your truck as a team, you are an instructor, and you very seldom ever go home. I also seem to remember that your rigorous schedule took a toll on one of your co-driver's health in such a way that he had to quit commercial driving altogether. I think this is all relevant information to be considered along with your remarks.

I also think you may agree with us more than you admit...

Here's a quote from one of your posts from about two months ago:

I believe I am in the the small minority of new drivers who have been able to make leasing work. The learning curve is huge. Out of the 50 new drivers I started my lease with there maybe 5 of us left. So it was about a 10% success rate.

I would say that 10% odds of success are pretty bad, well very bad in my opinion. That means there was a 90% failure rate. My research shows the success rate to be somewhat less than what you extrapolate from your personal experience at Prime.

Dm:

Dispatcher, Fleet Manager, Driver Manager

The primary person a driver communicates with at his/her company. A dispatcher can play many roles, depending on the company's structure. Dispatchers may assign freight, file requests for home time, relay messages between the driver and management, inform customer service of any delays, change appointment times, and report information to the load planners.
Brett Aquila's Comment
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We don't care about settlements. We want to see that "Net Income" line on your income tax statement. How much income did you actually pay income taxes on last year? That's the number that tells all.

Brian M.'s Comment
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This year quarter one was 4200 and 6700 for quarter two. I did not give you this information because it does not reflect my other business ventures and capital gains. Also it doesn't reflect losses I incurred outside of the trucking companies industry.

Brett Aquila's Comment
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This year quarter one was 4200 and 6700 for quarter two. I did not give you this information because it does not reflect my other business ventures and capital gains. Also it doesn't reflect losses I incurred outside of the trucking companies industry.

I have to admit I'm completely confused with all of that. Are those quarterly taxes you're referring to?

And naturally we're not talking about anything outside of leasing the truck. I'm talking about net income from the truck, the profit you would pay income tax on after all is said and done. That's the number that tells the whole story.

Dm:

Dispatcher, Fleet Manager, Driver Manager

The primary person a driver communicates with at his/her company. A dispatcher can play many roles, depending on the company's structure. Dispatchers may assign freight, file requests for home time, relay messages between the driver and management, inform customer service of any delays, change appointment times, and report information to the load planners.

HOS:

Hours Of Service

HOS refers to the logbook hours of service regulations.
Old School's Comment
member avatar
I have to admit I'm completely confused with all of that.

Brett, I think poor Brain has worked himself to a frazzle tonight. He just needs to get some rest. He will make more sense tomorrow, I think.

Dm:

Dispatcher, Fleet Manager, Driver Manager

The primary person a driver communicates with at his/her company. A dispatcher can play many roles, depending on the company's structure. Dispatchers may assign freight, file requests for home time, relay messages between the driver and management, inform customer service of any delays, change appointment times, and report information to the load planners.
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