Don't Be Fooled By Owner Operator Math - Old School's First Podcast!!

Sure, one started with a small supplement store in the Chicagoland area who now has 3 locations set to open another 2 in the next few years. Another owns a gym that's been open since the 80's I'll take that as a success. I'd say that speaks for itself

Well that's awesome. So they are not owner operators, not truckers? It's an apples to oranges comparison.

Chip the presentation that Old School put together is highly factual and focused entirely on the Lease Operator and/or Owner Operator. Did you listen to his Podcast? It's incredibly good, especially for someone considering this path. Old School was a very successful business owner for 30+ years, he is not offering negativity of any kind for running a business or becoming an entrepreneur. The whole point of this discussion, many others like it and the podcast is to completely understand the facts of Owner Operatorship, the true costs involved and the paradigm shift a driver must first understand, accept and then make from employee to owner.

I cannot understand how or why you find any of that negative.

Really don't understand the negativity towards someone who would want to be an owner operator or small business owner for that matter.

Chip Bagg, it's hard to understand how you come to this conclusion. I was a small business owner myself, and Brett has owned several small businesses. We're full blooded American entrepreneurs.

What we try to do is point out the false pretenses that people are under when wanting to own a commodities business like trucking. It's just not a very good business to be in when you're a small time operator, in fact it's horrible. There's a ton of bad information out there, and people get duped by it everyday. I laid out what I think is the best approach to success in trucking at the end of the podcast. All throughout the presentation I tried to point out the false information that lures people in all the time. It's what we call "Trucking Truth." A lot of people don't care for the truth, but would rather go headfirst after a dream that is not based in knowledge, understanding or reality. That's how a lot of people get hurt and lose everything.

When we try to help people steer clear of what usually ends up being a very bad decision, we get accused of being negative toward those same people! The world is upside down, and people are going to do whatever they want. I get that, but I am still willing to take the heat for trying to steer them clear of something I've witnessed turn out badly time and time again.

I know of two personally that are very successfull.

How do you measure their success? Is it by the fact they stay busy all the time? Or maybe it's because they have a really cool big rig? Is it because they have a nice home? Or maybe you've seen their tax returns? Did you hear the examples I gave of owner operators telling us about their success? They didn't really have a clue, but people believe every word they say. That is unless those people already understand the way a commodities business works. We see right through the smoke screen and just sort of grin inside because we realize, "I'm listening to someone who has clearly bought into the hysteria that says you've got to be the "owner" if you're going to make big money in trucking.

Chip, it's much easier to make really good money in trucking as a company driver, but you don't have to trust our experience. You are free to believe what you want and even try what you want. We have begged people to come back in here after being an owner operator for several years and give us some black and white evidence of their success. Guess what? Not a single person has ever taken us up on that challenge - NOT ONE!

Geeez, Chip! Try to stay focused here. We're discussing trucking.

I see plenty of shiny Peterbilts kw's going down route 30 in Indiana hauling either reefer or cattle. Are you telling me everyone of these operators are just on the edge of financial ruin waiting to be put out of their misery?

I see plenty of shiny Peterbilts kw's going down route 30 in Indiana hauling either reefer or cattle. Are you telling me everyone of these operators are just on the edge of financial ruin waiting to be put out of their misery?

You guys are killing me! Where did I say any such thing? My point is that in a business where the average profits run 3-5% there is no way anybody is going to do a lot better than a company driver just by becoming the owner. Through the years we've challenged people to show us the evidence, and nobody can produce any evidence other than bombastic figures out of their mouth that make no sense at all.

Take a look at this article...

Confessions Of An Owner Operator

While you're there take a look at the big Peterbilt pictured. That is the Owner Operator's truck that I spoke with for the article. It's pretty nice ha?

It is nice, and very well kept. But it's twenty plus years old. Why do you think he keeps a truck with over Two Million miles on it? You can come up with all kinds of reasons, but the truth is that he lives off of revenues that should have gone back into his investment in assets for his business. He's stolen from his business to falsely prop up his own income. He simply cannot afford to purchase a new truck every four or five years like most company drivers get. That's the issue. It's not that they are on "the edge of financial ruin." It's that they really aren't managing to be able to keep up with advancements in equipment and technology because they keep robbing Peter to pay Paul.

We all love a big shiny Peterbilt or K-W! But that's hardly our definition of success. A business has to show something credible on it's financials to be considered successful. Having to operate with decades old equipment is generally a sign that something's not quite right. Now, if you're just a fan of those old big rigs, and most of us are, that may seem really cool. But it doesn't give any proof that you're doing really well at this business.

When I see things like this O/O's social media page I think man, that's awesome, really inspiring stuff.

https://www.instagram.com/truckersjourney/

Working for himself like that and accomplishing what it would appear he is, it's possible. There's a path to it. I was looking forward to listening to the podcast and hearing some real numbers and unless I heard wrong the only numbers that we're mentioned was the 3 to 5 percent profit margin and numbers some previous members through out.

And as has been said to me in the past when I mentioned something I was told "you cant say that! That's subjective and you don't know! Well someone like the above owner operator could probably say the same thing.

I understand it's to help rookie drivers but it's coming across the wrong way. Coming across as it's not possible period.

You did allude to that though when you mentioned all you sure hauling containers in Georgia were beat up trucks that hardly looked like somebody who made 250k

I understand it's to help rookie drivers but it's coming across the wrong way. Coming across as it's not possible period.

Look Chip, we're not going to puff you up with inspirational B.S. when we know that every large trucking company out here would absolutely do everything in their power to squeeze out higher profits than they've been getting if they could possibly figure out how to do that. Don't you think they've tried everything possible? How is it that you think one solitary Maverick is going to outsmart and outperform some of the greatest most successful trucking companies at their own game? Is that a business, challenge you're willing to take on? It doesn't happen - that's the reality of business, especially a commodities business, where the best price gets the job. Do you think Kraft Foods really cares if their Macaroni & Cheese rides in a trailer with Chicken Lights all over the place? They care that it gets there on time, at the least cost to them - period. That's the reality of a commodities business.

It's not that it's not possible period for you to be an owner operator. But it is implausible for you to think you are going to do way better than a really good company driver. At best, and I mean if times are really good (which they are now) you might possibly make 5% more than an average company driver while the times are good. Here's the real rub though... people get frustrated with their pay in this business and they go right to thinking they should be the owner. Where they need to go is to examining their own performance. I have been told by my managers that I'm making twice as much money as some of the drivers in my fleet. Those other drivers get the same rate of pay that I do. What in the world do you think makes such a difference in our outcome? Wouldn't you prefer to make twice as much as the average driver than to settle for 5% more while taking on huge financial and legal risks?

The best way for each of us to make more money at this is simple. We just have to get better at it. We have to prove we've got the stuff that makes us valuable.

You did allude to that though when you mentioned all you sure hauling containers in Georgia were beat up trucks that hardly looked like somebody who made 250k

If I alluded to anything, I alluded to the reality of what many (and I dare say most) owner operators are suffering through. They are using revenues to prop up their salary. Therefore they can never improve their business model with better more efficient assets. They are robbing Peter to pay Paul. You may not interpret that like I do, but usually it means impending disaster is coming. It might be soon, it might be five or six years, but running a business like that never turns out well. Some of them have a really cool looking shiny Peterbilt rig now, but if they run their trucking business so they think they are making hundreds of thousands of dollars per year, it won't be long before they look like this owner operator who parked next to me the other night.

I was looking forward to listening to the podcast and hearing some real numbers and unless I heard wrong the only numbers that we're mentioned was the 3 to 5 percent profit margin

So you really weren't looking to hear some "real numbers," because those are the real numbers. You were looking for some pie in the sky B.S. that would give you hope. If you are smart enough to outsmart some of the best financial managers in the trucking business then you may very well be one of those headstrong Mavericks that I mentioned in the podcast.

Guys, I like to keep it real and honest. There's a reason Brett calls this site "Trucking Truth." We actually try to teach people the truth about this business. We've had quite a few people get really angry with us for not encouraging them in their pursuit to become owner operators, but we've never seen anyone who could convince us that it was a worthwhile proposition. Math has an edge to it. Especially when it's not in your favor.