QuestionQUESTION: Bob,
I've been driving dump trucks for 6 years. I also have about 2/3 years of towing experience, and used to haul for a local auction with a former employer. My question basically is....
How profitable is a dually/or F550 type truck, with a 3/4 fifth wheel trailer? I've been looking, and I could buy a brand new set up for roughly anywhere from $30,000-$90,000. I'm just looking to pay for the business and put some money in my pocket, not get rich in any means, but...would just like to work for myself. I currently make about $45,000 a year driving a dump truck. Would buying a dually type truck and 3/4 car trailer be worth the effort to survive and live?
John aka Pork Chop
ANSWER: Hi John.
Can you make a living pulling 3/4 car trailer? It's possible, but depends on your accounts. Use that equipment to haul used cars from an auction house to buy here/pay here dealers, and you could make more money at McDonalds. Haul vehicles for private individuals or new car dealers regionally or OTR, then there is money to be made. Since you use to haul out of a local auction, you should know what the going rates are.
I would shy away from new equipment, first time out. The second you drive that new rig off the lot, you just lost a new Mustang in depreciation. There is great deals on used equipment out there. Look into www.truckpaper.com. Keep your start up costs as low as possible. Then in a year or two, you know what to expect for revenue then you can jump into that new truck. I've seen too many guys check every option at the Peterbilt dealership only to have the repo man knock on their door.
Which brings me to my next point. Write up a business plan. Sure, it stinks, but it's necessary. Who are your customers? How will you get them? What are your fixed and variable expenses? These are some important issues that can be an eye opener for you. Again, too many drivers just want to buy a truck and drive. You wouldn't just buy a store, open the door and sit behind a register. Have a plan.
John, I think you can make a good living at it. I get accounts by separating myself from everyone else. That's what you should do to. Visit dealerships (dress nice), pass out your card and promise them that your the best hauler in town! I'd build an inexpensive website from someplace like www.register.com and offer your services. I know of one guy who makes a good living just hauling high end exotics to dealers in West Palm Beach and Miami for wealthy customers. He only has a rollback. You never know what you could run into with a little sales effort!
Good luck!
Bob Stephens
---------- FOLLOW-UP ----------
QUESTION: Bob,
Thanks for getting back to me. I guess I'm on the right path because you didn't seem to mention anything that I haven't thought of or already calculated! I look at that being a VERY good thought for myself.
I'm looking to purchase a F550 and take the back seat out and make a custom bed so that I don't have to worry about hotel fees and what not. Like you said, every little bit helps. I Have been looking at a few load boards like Uship, but haven't checked out any others as I'm not ready to pay for their service w/o equip. In my searches I find that I can make decent "profits" after all operation costs if I am willing to do OTR and not a "dedicated" type run. From Va to TX I have come to see that I can make at least $2,000 on that trip 1 way. And then lots of loads going back east to FL and then back to PA/MD area. I figure if I make a big circle in any route in 2/3 weeks. Then when I get back here I could take a couple days to service the truck and do repairs before lining up another set of runs. I'm also looking at local contracts, and would like to stay local, but I'll go where the money is! I do have ONE more HUGE question for you.
I contacted my SBA and have setup a time to go to their 2 hours class about starting a business. After that they'll work with me "as I'm sure you know" to come up with, and complete everything needed for a business. My main concern is....to buy decent equip, and have plenty left over for at least the first 6 months of operation cost...I'm looking at about 100K. That would be more then I need to start, but would also keep and lovely cushion for those very slow weeks. My question to you is this.......I don't have good credit......Are their ways of obtaining a small business loan for that amount with bad credit? My father would possible back me with signing....but would like to do this on my own. Are they banks or how far will the SBA go to back me up? Thanks so much for reading my VERY long questions/comments, but It's nice to talk to someone in this field that has plenty of expertise!!!!
John
AnswerHi John.
To answer your first question, with bad credit, you'll probably need your dad as a co-signer to get a loan. I know you want to do it on your own, but starting a new business (especially trucking) is a risky business and banks want to know that they're covered. Get your dad's help and work on your credit.
It really gets hard in trucking because the majority of banks and the SBA have no clue on how a trucking company runs. If your going to open a coffee shop, no problem. Start talking about things like lumper fees and they'll give you a blank look. I'm not to sure how far the SBA will go to back you up. They can be of great help, but you have to jump through all of their hoops. It's worth it in the end and you'll have a great idea of what to expect in your new business. You should talk to a rep about that. You may look into a loan and line of credit from the bank. Take your dad into your bank and talk to the branch manager.
It sounds like you have a good plan. Like I said before, look into some used equipment. Keep an eye out for a truck with a generator. That way, you won't have to idle at night. You'll save some fuel costs and wear and tear on your engine.
Good luck!
Bob Stephens
