QuestionBob,
My husband has been a truck (tanker) diver for 20 years and has always talked about becoming an owner operator. He wants to buy a dump truck and do local loads in Long Beach California. I have the business background and he has an outstanding work ethic but I am really nervous about this move. He makes about $65,000 a year now but says there is a lot more money to be made as an owner operator. What are your thoughts on starting a dump truck business? and How much would you spend on a first truck?
AnswerHi Leslie.
I get a lot of emails from worried wives like yourself. Truth be told, $65,000 a year for hauling a tanker is excellent pay. On the other hand, there is no other feeling like owning your own truck and calling the shots. You have to weigh the pros and cons while doing your research. Can he make more with his own dump? It's possible, but it depends on your accounts or company you lease out to. If he was here in Florida, I'd tell him to stay with his current job. The market in California is completely different.
Write out a business plan. Are you going to operate under your own authority or lease out? If it's under your own authority, how will you get loads? What do they pay? Is is steady work? You get the idea. The business plan should also have a list of all your fixed and variable expenses. Don't be optimistic, be realistic. Many people don't put enough in for repairs, for example. I don't care if that engine was just rebuilt with papers. If it doesn't have a warranty, you could be buying a rebuild the second mile off the lot. I've seen it happen. You must calculate everything and plan for the worst.
That brings me to your last question. I'm a big fan of buying a used truck for your first one out. Try to find something fleet maintained with an engine warranty (if possible). You can find a lot of good deals in the $40k range. Too many guys want to buy that new Peterbilt 379 for $140K. I wouldn't do your first time out. Trucking is no different than any other business, you want your start up costs LOW. After a year of two, when you have a good idea of income, then you can shop for that new truck. I've got a friend who's business just went under after he bought two new Freightliners a year ago. I told him to buy used, and learn the business, but he wanted those shiney new trucks. Well, he had them for a year!
Your husband knows trucking, and with your business background, I think you two will do fine. Like I said before, do your research. Know where accounts are going to come from and what they'll pay. If you lease out, talk to other owner operators and see how they like it. Try and see what their gross income is (Some won't tell and others will inflate it, but it doesn't hurt to ask). I go to www.truckpaper.com and search for trucks. My last used truck I bought in Indiana. I saved thousands and they paid for my flight and hotel. I had to pay for fuel to drive back to Florida, but if I save money in the long run... Look for deals anywhere you can get them.
My final thought is that dump drivers do a lot of night work (if working for the DOT, which many do). This may not be new to your husband if he hauls gas do stations (which is a lot of night work also). Long Beach has a huge port and it may be worth your while to look into container work. The pay may not be as high, but the loads are always there and it's a position where he's home at night. Just a thought.
Finally, find a good trucking accountant. Mine saves me a ton of money every year! He's worth every penny! There in SoCal, you should have plenty to choose from.
Good luck in your new journey!
Bob Stephens
