Despite The Good Advice I Made An Illogical Decision.

Topic 10932 | Page 1

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Ride2BFree's Comment
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The numbers are not for it. The logic are not for it. The advice I got here was against it. But I decided to go for the lease operator option. I know some will say a wrong choice well future will tell I'll try to keep you informed monthly how it's working.

Blessed 58's Comment
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The numbers are not for it. The logic are not for it. The advice I got here was against it. But I decided to go for the lease operator option. I know some will say a wrong choice well future will tell I'll try to keep you informed monthly how it's working.

Do not get into no lease option program with any company!!!! That is the biggest wrong move that you could ever make!!!!

Anchorman's Comment
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The numbers are not for it. The logic are not for it. The advice I got here was against it. But I decided to go for the lease operator option. I know some will say a wrong choice well future will tell I'll try to keep you informed monthly how it's working.

What were the deciding factors in choosing to go lease operator?

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
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The numbers are not for it. The logic are not for it. The advice I got here was against it. But I decided to go for the lease operator option. I know some will say a wrong choice

I think you just said it's the wrong choice.

smile.gif

Like Anchorman, I'd also like to know why you chose to lease if that's how you feel about it.

HOS:

Hours Of Service

HOS refers to the logbook hours of service regulations.
Ride2BFree's Comment
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Deciding factors are 1. Cash Flow- I know sounds strange but as a company driver I gross around 900$ my net pay check is about 600$ after all deductions and taxes as lease operator I can gross about 1300 my check will be around $1200. I know at year end I will have to pay the taxes but the better cash flow till march-April will help me get through financial difficulties. I was able to negotiate with all my creditors and it will help me avoid bankruptcy.

2. I like to get some items for the truck that will make life on the road more fun so I rather know that I have the same truck for the next couple of years.

3. I think lease operator from a big company you pay a little bit more but look at it as a franchise fee they give you the miles to keep your payments coming in for the truck and as long as you getting the miles everyone happy.

4. Despite what everyone say I don't see the big risk involved, I can return the truck at any time and walk out of it there is no need even for first tank of fuel when you get the job they finance the fuel and deduct it from the money coming to you. It's a brand new truck so everything under warranty.

5. It's lease operator not owner operator so no need to worry about collection from customers permits or anything regarding that it's like a turn key biz.

6. I know companies are making more money on lease operator than on company drivers but it's because they think more about driving then home time, if a company driver take home time a day per week it's 15% of the time that equipment is not in use. I don't have problem with that I can go on the road for 3-4 months at a time.

It's lease operator responsible for gas so company saving on idling money. Lease operator watch out more on the equipment.

In my short experience as a truck driver I realized that in most cases it doesn't matter who you drive for or a couple of cents per mile give or take its more the chemistry between the driver and his dispatch and if he is getting all the miles he can do. I drive for Swift I have a great chemistry with my dispatch I'm getting the loads and the miles and I'm extremely happy with them. I had few hard times when I started but it's all over now. And as many know if you do your job and your dispatch getting to know you that you are on time and do your job you will get the loads.

The hard part will be to find the right balance between how fast to drive to do more miles per day without increasing my fuel cost to a point that it will not be justifiable. As a company driver truck is governed at 62 as lease operator at 68 An extra 5 mph on average it's another 50 miles per day or over 1000 per month that you get paid for.

At about 0.40 cpm net it's 400$ a month more.

So if I had to put money down to start a new business without knowing when and where from ill get my first customer it's a big risk but here I don't see such a big risk. Most people say don't lease from a big company because it cost you more then buying. Yes it does yes they make money on it but I think thousands of owner operators that do stay with the companies for years show that it's more about the person you are and your work ethics and be able to manage your expenses then the biz model. Not everything is for everyone and there are many different ways to do things for me at this point in my life I believe it's the way that can work the best.

Owner Operator:

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

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

Mark P.'s Comment
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I knew up front that I did not want to fo lease since I took the self employment route for years in my other life in stage lighting. Just be very careful about your record keeping, file taxes quarterly, keep money aside for your portion of the Social Security payments, and save those receipts for expenses. Expenses equal tax deductions! Keep us posted on how it goes.

HOS:

Hours Of Service

HOS refers to the logbook hours of service regulations.
6 string rhythm's Comment
member avatar

You're gonna get plenty of feedback here. As a former business owner - a successful one - I must caution you that you're gonna have to be very disciplined with borrowing against your taxes, which is what you're doing, as you already know. I've never done this. I always set aside an over-estimated amount monthly, even though my taxes were quarterly. I'm sure you already know this, I'm just encouraging you to be very careful. That upfront cash flow is borrowed money. You better be sure you can pay that when the taxes are due. Furthermore, your production might drop off, and you might be turning less miles when you might be trying to make up for that tax money down the stretch when it's close to tax time. This seems very risky. You're playing against the house, and the casino never loses.

OWI:

Operating While Intoxicated

Brett Aquila's Comment
member avatar

To be honest, what I'm hearing from you is hope, wishful thinking, shortsighted plans, and guessing.

The number one question you must be able to answer if you're going to be a successful business owner making a worthwhile profit over a long period of time is this:

"What significant advantage do I have over 95% of the competition that will allow me to command a sizeable profit?"

If you can't answer that question then your business is going nowhere. Nobody makes a worthwhile profit being like everyone else. If you can't differentiate yourself from the competition and provide a product or service that's a better value than your competition can provide then you are of little use to anyone.

You already know that in any industry there will be a lot of companies operating on the razor's edge of profit and loss. Basically they're doing business at the cost of doing business. This is very common in the trucking industry. So if you can't provide a significantly better value than those who are providing their services at breakeven prices then you're also going to be operating at breakeven prices. And in this case, if things go well, breakeven means you'll basically make the same amount as a lease driver as you would a company driver. The big difference is in the risk. As a lease operator you can do a lot of work and have nothing to show for it. In fact, you can go negative financially. You can't go negative as a company driver. You might not make money if you're not working, but you won't lose money either.

So if things go well you'll make what you're already making as a company driver and if they go poorly you'll dig an even deeper hole than you're in already. It's all risk with no real potential for reward.

Have fun and good luck!

smile.gif

HOS:

Hours Of Service

HOS refers to the logbook hours of service regulations.
Ride2BFree's Comment
member avatar

To Mark Thank You To 6 String Thank You, I know about taxes this year I got big losses from previous business so I'm covered. Actually I got a refund due that will cover half of next year as well as I plan to keep it there.

Brett Thank You as well Any business starts with hopes and wishful thinking. You deep your feet in the water with short term plans after you move to long term plans.

As you know trucking is a commodity so there are very few that have 95% advantage.

You again are looking from an owner operator point of view not a lease operator. I need my advantage with my dispatch and I got it by being reliable being on time every time dressing professionally Having good attitude with customers and everyone else and not coming from home time with a plan for the next home time in 2-3 weeks. Now a significant profit in trucking it's hard to come by in an industry that average 3 %.

And each person is different and some will rather be self employed for less then being working for someone else.

I love what I do, I enjoy 99% of what I do. I like to have the more sense of freedom even if it's just the potential of it as a lease operator and for me even if I'll ending up making the same amount of money it worth it. Yes I might do a little bit more got no problem with it. Again do not see the huge risk.

Many people are starting business and fail not because of the business but because taking money to quick and too much out of their business.

As lease operator everything is taking out first. You pay everything weekly and you have a maintenance account set up so you put money there for future expenses.

So what you get is actually your net before taxes and expenses living on the road.

Owner Operator:

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

G-Town's Comment
member avatar

Ride2BeFree wrote 4. Despite what everyone say I don't see the big risk involved, I can return the truck at any time and walk out of it there is no need even for first tank of fuel when you get the job they finance the fuel and deduct it from the money coming to you. It's a brand new truck so everything under warranty.

Are you sure about that; returning the truck at any time?" Is that specific language in your lease? Usually the terms of a lease are binding, meaning you agree to make payments for the full term of the contract. If you have an attorney, I emphatically suggest that you have them look at your contract to make sure there are no penalties, etc., cause this doesn't sound right. Remember the person you are speaking to about your Swift lease is a sales person!

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