Sorry It's Been So Long

Well everyone I am here to first apologize for leaving so abruptly from my blog on my first year as a lease operator. To the few of you who were following me sincere apologies. The reason I discontinued my posts were simple I needed to devote all of my time to my new business. As some of you know I went against conventional wisdom and became a lease operator instead of a company driver. Many of you warned me about the pitfalls of doing so. It has been 6 months give or take now and I am happy to say at this point I do not regret my decision one bit. I am not here to gloat or paint a Rosy picture. It is extremely time consuming work and exhausting at times. Many of you may ask if I have been rewarded financially these past 6 months. Yes, yes I have. I would be happy to share my P&L with Brett, Old School, and Errol so they may verify its accuracy. I don't want to be accused of inaccurate info. To this day I still believe this website is the best truck drivers site on the net. I credit everyone here for giving me the knowledge and tools to be successful. I am in my 56 week of trucking and loving every day of it. I would really like to pay it back by being here to answer anyone's questions. Thanks for everything brian

How much have you made (net) so far as a lease op? Are you still teaming? Any mechanical problems with the truck? Any accidents/incidents so far in your first year? Sorry if I'm being nosey, I was avidly following your thread when you disappeared. Glad to see you're back!

Hi CS thanks for sticking with me. I would be happy to answer all your questions. First let me say that if there is anyone that has concerns my numbers are not accurate I've made it clear I will be happy to share my P&L with 3 individuals that everyone respects. Yes I still have my trusted and reliable co driver. Of course without him I wouldn't have achieved what I have today. Of course we have are moments but in the end he and I both know our success in this business has been mutually beneficial. Since Jim has been on my truck he has averaged a little over $1000 a week. Hopefully we can do better in 2016. Knock on wood! We only had one small incident with our truck when we were at a Tyson plant I drove too close to a really deep mud hole at got the trailer so buried that we needed a wrecker to get it out. Not my best day! That little stunt cost me $300. No damage to the truck, trailer or product just a little ego bruising. As far as repairs nothing major thank heavens! We are religious about our pre and post trip inspections. We take care of the equipment and "Betsy" has taken care of us. Our PM's are done on time our tire pressures are checked every other day so I feel as if we are rewarded with a great running rig. The list of repairs are as follows. One steer tire coming from Mexican border in Arizona it had mysteriously been cut on the inside wall. Was able to get it to a loves and have it replaced cost after core turn in 500, and minor warrant work that had no out of pocket or downtime consequences. As far as money is concerned after 30 weeks my pay after all of the fixed and variables costs. $44,490 plus 9250.00 in my emergency fund. I just paid the IRS another 4200 which I still haven't subtracted yet. Of course I am hoping to get some of the 9200 I've payed the irs back in April. Hope this answers your questions

Congratulations! Many businesses don't show a profit the first year and many business owners go a long time without paying themselves. You've done it, kept a positive outlook and I for one appreciate it. You've let us know that despite all the negatives it can be done.

Good luck in 2016. I hope it's even better than you expect.

Thanks still livin the dream

Hey Brian, I can't tell you how glad we were to see you back in here. Your absence made us think you had sunk already, and that would not be good! I like your responses to folks in here, they show that you really do get how much work and commitment it takes to be a successful lease operator.

I'm curious about several things, and forgive me if you have addressed them before, I can't keep up with everyone in here, and I could easily have forgotten these things if you've shared them with us previously. I'm curious how you guys handle home time. Do you have a family? How are they handling your absence if so? Do you still run the truck solo while your co-driver takes home time, or what do you guys do so that you just don't burn out? I know that a leased truck is like a harsh mistress, you need to spend a lot of time with her or it won't go well for you.

Another thing is the numbers you gave out:

As far as money is concerned after 30 weeks my pay after all of the fixed and variables costs. $44,490 plus 9250.00 in my emergency fund. I just paid the IRS another 4200 which I still haven't subtracted yet. Of course I am hoping to get some of the 9200 I've payed the irs back in April. Hope this answers your questions

It looks to me like you are doing well, but I have seen this so many times where a "new" lease operator jumps in here like a ball of fire thinking he can work miracles and make all kinds of money, but he eventually comes up against the "mean averages" of the industry and then gets all frustrated with it. That is why we talk at times about the "honeymoon" period of leasing. That first year seems like a bowl of cherries, but eventually the thrill and the adrenaline wane and then comes the daily grind of the business that everyone must face. You have not had enough time yet to have experienced any major setbacks, heck, you haven't even had to buy a tire yet!

What are you doing for Health Insurance? Most company drivers pay would show a deduction for that... so does the expense of that come off of that 44,490 dollar amount you show? Also am curious about the taxes of $9,200. Are those included in that income number? Or are they already subtracted from that number? It looks like at the rate you are going you are going to be paying close to $20,000 in taxes for the year. What about your co driver, how do you handle his taxes? Is he a 1099 contractor?

What kind of miles are you guys turning on average, and do you think you can continue that rate? Is that something you concentrate on, or do you concentrate more on getting yourself into areas that you know have really good paying loads? I ask because I know that the rates on loads are different all across the country and a lease operator has got to be able to try and keep himself in the best money whenever possible.

Sorry to bombard you with so many questions, but I think all these things have some bearing on just how well you are doing at this or not. I wish you every success, and I really am glad you showed back up, but like Brett has decided, this topic for us, has been a non producer. I actually enjoy trying to be calm and logical with folks on the subject, but there is usually such passion on the one side that people don't want to hear why we don't recommend it. You seem to me like a guy who has thought it all through and chose to try and use his head more so than his heart, and I hope that strategy serves you well. The industry averages are what bothers me - I was in a business for thirty years, and while we did very well at times, we would always be brought back to the industry averages in one way or another. That old booger of "return to means" was a hard thing to conquer, in fact it was impossible - averages are just that - they show the true story of what's happening, and even though we might really be kicking it at times, there were always those times when we were getting kicked ourselves. It's just really hard for me to take a look at a new business, just six months in, and take the numbers seriously.

Just bumping this back up in hopes that Brian will see it and respond.

OS thanks for the compliments I really do appreciate everything you said. Your right though I am still in the honeymoon phase quite a bit of work yet to be done. Since I really do respect everyone here and understand why leasing is taboo on this sight now. I will try to give you a little more insight on how we are achieving our goals without talking to much of the details for the sake of the new policy.

I would be honored to send you my last weeks reconciliation which details almost every dollar I have made and spent to date. The dollar amount of 44500 approximately is net to owner. The 9200 is combination of emergency fund, tire fund, and bond. By the way I did have to purchase a steer tire I mentioned it above. I use my nontaxed emergency fund money in order to pay quarterly taxes so the amount in my emergency fund will soon be 4200 less when good old Uncle Sam cashes the check. So to be fair I now have 5000 in the fund. I put 10 cents a mile in emergency plus 2 cents tire. Since I hired a co driver I also pay a over mileage fee.

My lease is not based on years but rather miles. i turn in this truck anywhere between 450,000 and 500,000 miles. Which means I will no long have this truck after July of 2017. Since this is the method they use all the overage mile money will be returned to me after I complete my lease.

Like the truck my co driver is leased to my company as well. He is an employee of Prime and recieves all the benefits of a company driver. He recieves a Prime paycheck and they deduct everything from my settlement. I think they charge me around 10 dollars a week. Basically prime pays his salary ssi health dental etc etc and it comes out of my settlement.

When it comes to hometime as of December we both had 25 days of home time. We like to take longer than a few days so we are generally home for a week at a time and two weeks during Christmas. That leaves us on the road for 10 to 12 weeks between hometime. My co driver rather not drive solo so we take hometime at the same time. I prefer it as well because I can get warranty issues or any maintenance done on hometime.

We are averaging between 5000 and 6000 miles a week my net per mile is .365 right now lease to date. As far as loads I am really comfortable with my fleet mgr and let him decide what to take. I have yet to turn down a load although I do question them sometimes. One thing I learned really quick is that I don't make money on every load I just want to be in a good position for the marathon. I have taken .60 a mile load 2000 miles asking nothing in return to be rewarded with 3.80 a mile back hauls. Old school my best week was one I only ran 3200 miles.

Anyway like you stated the honeymoon isn't over so I'll just be thankful I'm still afloat. My father was CPA for a pharmaceutical company and has checked my trucking CPA s work and doesn't have a problem with it.

Oh I have a girlfriend (24yrs together) and her work requires her to travel as well so this is nothing new to our relationship. My health benefits are taken care of by the company that purchased my business I had. I hold the title of professional consultant for 16 more years with them and recieve a small yearly fee and my health benefits. The money was enough to retire but not life changing. For some odd reason I love challenges like this.

Please pm me someplace I can send you my last statement. I really would appreciate your take on it

Thanks for the reply Brian!

I looked into being an owner/operator or lease operator at the beginning of my career - Like you, I had previously been self-employed and knew my way around ledgers and balance sheets. I ended up settling for being a company driver because I was averse to the inherent risks of the business - I had experience with truck ownership, and found it challenging in the least. I had forgotten that you were with Prime - I think their lease program is set up fairly well with some clear advantages over some of the others out there, and had I realized that, I would have know some of the answers to the questions I posed to you.

Old school my best week was one I only ran 3200 miles.

That statement gives me confidence in your abilities to make a go of this. Most people don't realize the disparity in the rates for various loads out there. Once an owner operator understands where the money is at they can concentrate on those areas, and learn little tricks like taking a few short hauls out of an area where the rates are depressed so that they can get a little higher rate on those short hauls, but take loads that move them into a better area for potentially better freight rates. Some lanes just pay a lot more than others, the company driver doesn't have to give a thought to any of this, but those things may very well be vital to your success. It seems like you pay a great deal of attention to how your monies are being handled and where it's going - that is all good. I like the fact that you have got Prime's accounting system in place to help you sort things out, that makes it a lot easier to understand your settlements and how the money is used.

For some odd reason I love challenges like this.

We are alike in this - I love the challenges this career puts forth. I just chose to be a company driver because I didn't see enough advantage to the owner side of things in this endeavor to make it worth the risks involved. But, to each his own, I'm glad to have you in the forum, and glad to see you making a go of it all. It's a great challenge, and whether a person is leasing, owning, or operating as a company driver - it is only the strong that survive.

Brian, don't take offense, but I don't need to see your statements, I can already see that you are doing a fine job of it. I hope you can continue it for many years to come. If you hit some rough spots and want some advice you feel free to ask us, and we will offer what we can. One very smart move you made in my opinion is to hire a co-driver. We've another Prime lease operator in here named Ken C. and he did the same thing - Props to you Ken! I think having that co-driver on board gives you guys a better shot at some of the best loads.