From Company Truck Driver To Owner Operator Questions

Topic 10634 | Page 4

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UberHammer's Comment
member avatar

The answer to this is not black or white. It's not yes or not. It's not win or lose.

It's not impossible to make more as an O/O.... but it does require a well executed business plan. It doesn't just happen, especially for many people who just do it without a plan at all to even execute. In fact, the number of drivers who can create such a plan AND execute it profitably is probably well below 1% of all truck drivers.

Cave Dweller's Comment
member avatar

Uber, couldn't agree more but it gets old being told what one can't do. Don't like having someone else's limitations placed on me!

Old School's Comment
member avatar

I'll tell you guys what gets old to me. That is when I try to spare a green horn rookie like Ride2BeFree from making a disastrous decision to be an owner operator without any sort of a plan, and every new owner operator wannabe who sees it is convinced that I'm putting limitations on them.

A big part of what I try to do in here is to teach people to think. Some take offense and some start to see how critical thinking can benefit them. I never tell people what they can't do, but I hope to teach them how to approach the difficulties of this career without compounding the inherent problems they will surely face.

Owner Operator:

An owner-operator is a driver who either owns or leases the truck they are driving. A self-employed driver.

Ride2BFree's Comment
member avatar

WOW, so much information here, Lot to be learn from others experience.

People assume when you are 59 and broke a certain things about you, I will not even try to assume what they assume but my life experience thought me that people get into a certain position because of differed reasons.

1 can loose it all for medical bills on himself or a love one, another can loose in business going bad and another just lose a divorced case and it can go on and on.

Many people in different industries think their business is unique and special. Yes, there is something unique in any industry but the main goal of most businesses is to make money at the end of the day. And the way to do it is by having more income then expenses.

People are going to different industries because of different reasons and there is one saying IT'S NOT THE PEOPLE'S PLANS THAT ARE FAILING IT IS THE PEOPLE THAT ARE FAILING TO PLAN.

and to contrast it there is another saying

PEOPLE PLAN AND GOD LAUGHED AT THEM.

As I say to start with, yes for the short run it's much better to be a company driver then O/O or Lease/O.

But as someone else said here show me a problem and there is a money to be made by solving it.

Yes a company driver can move to the company that will have what he likes if it their equipment passenger policy pet policy or home time But even with that it looks like companies are running more after O/O Obviously because they make more money with them. But company making more money is not necessarily cash flow, because big companies financial statements are built differently then a small business profit and loss.

In business the higher the risk the bigger the reward

So if one become O/O or Lease\O For one company where he leased the truck from he minimize the risk As I say to start with he can walk out at any time he does not need to put even money in gas they advance it.

If he get a better deal with another company he can move with his truck and still make the payments or get a better deal on a different truck.

Yes, there is a cost in everything and here the cost of minimize the risk And not investing your own money is by paying a premium to the company you lease the truck from.

And another lose you have is by making less in money and benefits combine compare to company driver.

As I learned from previous business experiences there are 2 very contributing factors that a business need in the beginning 1. Is the timing. If the time is good for the industry and how long it will stay that way. 2. Is pure a little bit of luck. Yes I know some will say it can be compensated with hard work but you can see some can work harder then others but just missing being in the right place at the right time.

Thank you all for the info again. At this stage I made up my mind and made the decision not to decide yet.

OOS:

When a violation by either a driver or company is confirmed, an out-of-service order removes either the driver or the vehicle from the roadway until the violation is corrected.

Brett Aquila's Comment
member avatar
Great Answer!
I don't post often, because I'm spending time searching thru the thousands of posts because the site is not "search friendly."

hmmmmm......sorry about that. Have you tried using the search engine at the top of every page? That thing seems search friendly. We also have this forum broken down by tag and you can find the topic tags here - Topics By Tag.

You my friend are the definition of an Online Bully!

Still waiting for examples of Old School being an online bully.

I consider myself a Successful O/O it took a bit of research but I feel like I'm doing way better than I was a Company Driver

To be honest, when an experienced businessman hears someone describe their business prospects using terms like "I consider myself" and "I feel like" without any numbers of any sort it's a gigantic red flag. Businesses are evaluated in terms of hardcore facts and bottom line numbers, not feelings and instincts.

I personally avoid debating such subjects on this Forum but people sometimes hit me up with questions via Email.

And that's really shady. If you enjoy discussing your business with people, why wouldn't you do it here for all of us to see? After all, the peoples are saying:

I do wish though that there was a section to add positive light for someone who has done the research, put in the time and really wants to make a go of it.

Me too! I've been clamoring for this for years. I've asked lease drivers and owner operators to come here and discuss their successes with us. I've asked them to share their numbers. I've begged them to share their secrets. But as you're seeing, we never get anything of the sort. We get a lot of people who are a few months into leasing or owning their truck coming in here telling us how they're setting the world on fire with "piles of cash" and "a river of money". In fact, those are expressions people have actually used to describe their success after only a few months. But somehow every single last one of them disappears shortly thereafter and never returns. What happens to them? Where do they go? I mean, if you're super successful in business after only a few months imagine how successful they should be after a couple of years, right? And yet they never return with their success stories.

Here's a good example: Leasing A Truck: My Journey.

He started out with a few numbers at the very start and then the updates stopped. That was a couple of months ago. What happened? I don't know. It's one of many mysterious vanishings.

One thing you guys have to realize is that Old School and I have both owned and operated businesses for many years. We love being in business and we'd love nothing more than to help others succeed in business. But you have to choose the business you enter into with tremendous care and caution. It's difficult to make a consistent long-term profit in any business. If there was easy money to be made competitors would quickly swoop in, undercut the ones making the big bucks, and before long the profits would be slim. There is no such thing as a gravy train in the business world.

But some businesses are far worse than others when it comes to profit margins, cash flow, and capital expenditures. The worst category of all is any business that would be considered a commodity, which basically means that only the price of the product or service matters. Trucking is one of those businesses. It's a commodity service. Nobody cares who hauls their freight. It doesn't matter how much chrome you have, what shade of red your truck is, how much power is under the hood, or how clever your company name is. All they care about is how cheap you can get their freight from point A to point B. Other examples of a commodity products would be gasoline and corn. An example of a commodity service would be airline tickets or oil changes.

Do you care what brand of gasoline you buy? Does it matter which farmer grew your corn? Do you really care which airline you fly with or who changes your oil?

No. It makes almost no difference whatsoever. All you care about with those products and services is getting the best price.

That's the way trucking is. Nobody cares who hauls their freight. They just want the best price they can get to move their products. When you have a situation like that there is no way for the business owner to differentiate himself. Therefore there is no way you can command a big, fat, juicy profit for your product or service. The only way you make the big bucks in business is by doing things that almost nobody else can do on your level. It's a matter of supply and demand. You have to be one of the few who can supply a product or service that is in great demand. That's where the big money is made.

If you wanted to make big money in a commodity business you'd have to scale it really big. You would never make a worthwhile profit by supplying a small quantity of a commoditized product or service. You can't just sell a little corn or gasoline and expect to get anywhere. You're not going to own one or two trucks and make very much. You have to sell a ton of any commoditized product or service to get anywhere and even then there's no guarantee you're going to make any profit at all. Just look at the balance sheet of publicly traded trucking companies.

Owner Operator:

An owner-operator is a driver who either owns or leases the truck they are driving. A self-employed driver.

SAP:

Substance Abuse Professional

The Substance Abuse Professional (SAP) is a person who evaluates employees who have violated a DOT drug and alcohol program regulation and makes recommendations concerning education, treatment, follow-up testing, and aftercare.

HOS:

Hours Of Service

HOS refers to the logbook hours of service regulations.

OOS:

When a violation by either a driver or company is confirmed, an out-of-service order removes either the driver or the vehicle from the roadway until the violation is corrected.

Dennis R. (Greatest Drive's Comment
member avatar

The only way to become an oo is time save and buy a new truck,from a dealer,with a decent interest rate. $$1500 monthly payment. Takes about 5 years experience,showing wages and or profit, to get a good rate.

OWI:

Operating While Intoxicated

Dennis R. (Greatest Drive's Comment
member avatar

Have to maximize value,and minimize fees,starting from day one.every extra fee,leasing a company truck,adds up to a huge amount after a 5-7 year lease..you might own the truck,but it will be a million mile truck.

Old School's Comment
member avatar

While driving today I was thinking about some of the things that were said in this discussion, and I wanted to revisit a couple of things. I also want to make sure each of you realizes I am an entrepreneur at heart, I love our free market economy, and I truly love the trucking industry. I also get a big old grin on my face every time I see some owner operator pull into the truck stop with his fully custom rig with lights a blazing - man, I'm almost jealous, I'd love to be cruising down the interstate in a rig like that - there's nothing more cool than a big shiny American made Big Rig, i love em!

Cave Dweller said:

Point is, show me a problem, I'll show you an opportunity.

I love that attitude, in fact if you guys knew me at all you would realize that has been the way I have lived my life from the beginning. When I started my business I had a banker who wouldn't work with me at all, I told him I was going to get this done whether he wanted in on it or not. His response was you will never get it off the ground, you've got too strong of a competitor right here in our town. Well, after I got it off the ground he was in my office one day and he leaned forward in his chair and said "Dale, you've got a pair like nobody I know, I can't believe you've done this!" Several years later that same banker loaned me a half a million dollars to buy out that competitor that he thought was so great! At that point we owned the market share in our area.

I very much loved being in business, and I really do enjoy discussing the trucking business in here with you guys. I realize some of you just don't think I know what I'm talking about, and that's alright, I'll just stick to my guns as long as I know I'm on the right track. smile.gif

I made this statement in regards to my reasoning for staying as a company driver as opposed to becoming an owner operator:

I'm all for hard work and long hours, and brother, I know that is what it takes - I love working, but when I put in that kind of effort it needs to yield me a considerable difference in what the company drivers make. That is where it all breaks down for me.

Basically that is my reason for not wanting to be an owner operator, and it is also the reasoning that I try to lay out in these discussions. I don't see the path to making a whole lot more money, and I do see the manifold increase in risks, so therefore it is not worth the extra effort to me. The problem in all these discussions lies in the fact that so often the folks who want to become owner operators have believed some misleading information from someone and they usually don't actually have any business background to help them understand the problems that they are about to get into.

Cave Dweller is different though, here is a man who has managed his own business for 26 years - that lends him a lot more credibility in my mind, at least as far as understanding the differences between net income and gross revenues goes. He also seems to have a lot of family members in trucking, and if that wasn't enough to sway him, I'm sure that I cannot convince him of the downside of it all.

Cave Dweller, I do have a question for you though. Let me preface it with the very true fact that when I decided to get into this trucking thing, it was fully with the intention of being an owner operator - I had always been "the boss," and I saw no reason not to continue with that program. I figured, and figured, and wore out my wife with constant scribbles and calculations on a legal pad. I worked tirelessly with Excel spread sheets to try and formulate a plan and a way to make a killing running my own rig down the road. Here's what I came up with, and trust me, I figured this thing nine ways to Sunday. No matter how I laid it all out, whether I started with a new truck, or an older truck, or even if I tried to lease a truck... I still came up with a "break even" point of somewhere in the neighborhood of $1.73 to $1.85 per mile. That is what I needed to get for moving the freight (I was figuring on flat-bed work) When I started investigating what freight was being moved for I was greatly disappointed - the "big boy's" were fighting over that stuff right and left, and were often times willing to do it for around $1.50 to $1.75! Now just like any business there were little pockets of better paying jobs here and there, which is why the owner operator has to go out and find that "good stuff." The problem with that good stuff is that it disappears just as quick as they realize that there are folks out there who will do it for less. That is what Brett is talking about when he hammers home his point about the problems in trucking being because it is a commodities business.

Continued...

Owner Operator:

An owner-operator is a driver who either owns or leases the truck they are driving. A self-employed driver.

SAP:

Substance Abuse Professional

The Substance Abuse Professional (SAP) is a person who evaluates employees who have violated a DOT drug and alcohol program regulation and makes recommendations concerning education, treatment, follow-up testing, and aftercare.

Interstate:

Commercial trade, business, movement of goods or money, or transportation from one state to another, regulated by the Federal Department Of Transportation (DOT).

Old School's Comment
member avatar
Great Answer!

Forgive my long winded preface to my question, but it is all important to the discussion. My question is: Did you come up with some sort of a figure for a "break even point", and if so was it anything similar to mine?

Of course, the reason I'm asking you this is because you made this statement:

Did the company driver thing for 2 months fully intending to gain some experience before buying my first. Couldn't take it, bought a cheap truck, got way too dirty making it right as possible(parts are reasonable, my time was free) bought a very serviceable trailer, found reasonable insurance and got my authority, done. 3 months in doing 2.06 ALL miles, maintainence account building and weaning off the spot market as I build contacts. Point is, it can be done, you will work twice as hard and personally I would not do it any other way.

Okay, so you admit that you are working "twice as hard." Yet you say you are getting $2.06 for all miles. If we use my calculations, and let's just round it off to $1.75 for a break even point. Then it looks to me that you are making around .31 cents a mile, which is comparable to, and in some cases less than a newly licensed company driver. Would you agree?

Please don't take offense and start accusing me of being a bully like some have done - I genuinely am interested in what the appeal is to you if those numbers are accurate. If there is a different appeal to you then that is all fine and good, but let's don't let it be thought of by the interested parties who are reading this stuff that it is because you are making a lot more money than a company driver.

That is why I made this statement:

I'm all for hard work and long hours, and brother, I know that is what it takes - I love working, but when I put in that kind of effort it needs to yield me a considerable difference in what the company drivers make. That is where it all breaks down for me.

I'm only trying to illustrate the fact that very few owner operators are out there making anything considerably more than a good company driver.

Uberhammer even thought it was the top 1% of all drivers - wow! that is a tough group to get into!

Now, if a guy wants to be an owner operator because he just enjoys hanging chrome all over his rig, and he likes to be "styling" as he rolls down the road, that is another thing all together, or even if he just wants to control where he runs, and when he goes home... I'll concede that too (although I pretty much control both of those things as a highly valued driver), but Cave Dweller, if you think you are going to make a lot more money as an owner operator could you share with us how your break even point is so much cheaper than mine was? Because every way I look at this scenario, that is the only way you can accomplish that feat.

Owner Operator:

An owner-operator is a driver who either owns or leases the truck they are driving. A self-employed driver.

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.

TWIC:

Transportation Worker Identification Credential

Truck drivers who regularly pick up from or deliver to the shipping ports will often be required to carry a TWIC card.

Your TWIC is a tamper-resistant biometric card which acts as both your identification in secure areas, as well as an indicator of you having passed the necessary security clearance. TWIC cards are valid for five years. The issuance of TWIC cards is overseen by the Transportation Security Administration and the Department of Homeland Security.

HOS:

Hours Of Service

HOS refers to the logbook hours of service regulations.
Cave Dweller's Comment
member avatar

Old School, your numbers are pretty good, I'm a little lower on my cpm (roughly $!.56) which will continue to vary as I buy a new truck one part at a time. Your logic is spot on with the risk/reward factor but I've come into this from a different view point. Been in commercial construction where yep, I'm the guy in charge BUT in reality the schedule calls the shots. Example, last Christmas day I was out of town on a job tying up loose ends on the site to be ready for the crew the following day. No problem except that actually seemed normal to me. Fast forward, taking 6 days off to have some fun with my son during fall break this week. That is what really works for me. Money is nice and will continue to improve as I clean up my lanes/work on finding that elusive niche but not my priority. You are absolutely correct, it is not a get rich quick scheme, just something that dovetails nicely with my next 10 years.

CPM:

Cents Per Mile

Drivers are often paid by the mile and it's given in cents per mile, or cpm.

OWI:

Operating While Intoxicated

OOS:

When a violation by either a driver or company is confirmed, an out-of-service order removes either the driver or the vehicle from the roadway until the violation is corrected.

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