Trucking: Making the leap to owner operator, becoming an owner operator, wal marts

Question
Thanks to someone not reading their e-mail well today, (I am sitting in Phoenix Arizona because my load fell thru for a particular grade of rebar that the customer wanted and the supplier did not have), so then I got to thinking today, and the more I am out here driving again the more I am thinking about becoming an owner operator. I am not the type to hang out at the truckstops, (except to sleep), I don't go crazy with expenditures, I don't eat out all the time, (I invested in a cooler/fridge and keep a sharp eye out for the Wal-Marts), I'd like to think that I am doing things much better this time around than when I did back in 97 when I first got out of the service and into trucking, so, all of this thinking has brought me to these questions, can I become a successful owner operator? I AM out here to make money, it does not kill me to be gone a lot, everything I am doing now I think would work great towards my own truck, but what are some options for someone with less than perfect credit to obtain a truck? (After my divorce in 95 I was not left in the best of shape...) I also have heard before that there is a ton of fellows out there who would just "run enough to make their truck payments" this would not be me......Matter of fact I am going to request another run for this coming weekend since today fell thru...I am out here to make it, I work hard, I like being a flatbed driver, and when I see some of these nice, really clean trucks running around, and what some of these operators are doing to and with them, I know I can do the same....Any good advice would be appreciated, and "danger signs" to watch out for if I dive into this thing head-on"...Thanks....  

Answer
Hi Rob.

Sure you can make it as an Owner-Operator.  It sounds like you have the discipline and experience.  You'll just need to get some idea of your start-up and operating costs and figure out which direction you want to go.  I could write a book on o/o trucking, but I think one of the big keys is knowing where to put your money.  Too many guys have a few dollars in the bank and decide that a Texas bumper, larger stacks and 250 chicken lights are a good investment.  Then, when the engine goes, it's back to being a company driver with a broke down truck in the driveway.  A truck that your still making payments on, that is.  

Are you planning on being an independant o/o, or will you lease out to a company? If you want to be an independant, you have your work cut out for you.  You'll need someone to help you with all the paperwork and getting paid not to mention that your start up costs will be a lot more.  Expect to put down between $5000-$9000 on a used truck.  Then it's time for a trailer, insurance, DOT/MC numbers, IFTA, base plates and even lettering the truck.  A lot of hands will be out wanting money.

I don't want to discourage you, but you should have an idea of why o/o complain about making payments.  In an average trucking company, with every $100 in revenue, there is about $95 in expenses.  Not a huge profit.  There are exceptions, but not many.  

What I would suggest to you is perhaps leasing to a company.  You know flatbed.  Find a company like Melton Truck Lines and lease out to them.  They have a good lease/purchase program and this can start you on the way to being an o/o.  Now, you have a big company backing you up and taking a lot of risk away from you.  Then, down the road (so to speak), you got a good grasp of what it takes to be an o/o.  You can take it a step further and start your own company, or whatever you wish.

My next advice, keep track of the money.  Know where every dollar is going.  I'm not saying don't take pride in your ride, but don't buy the extras until you have an "engine fund" (as I call it, if the engine goes).  I can't stress this enough, as I've seen too many o/o go out of business because of poor money management.  If you take advantage of a lease/purchase, you'll have a new truck with a warranty (most likely), so the fund can be smaller.  You'll want to save as much as you can (and fix your credit) so that one day, you can walk into that new truck dealership and custom order that dream truck!  

I think you can do it.  Be wise, and when your unsure, find out!  

Good luck!

Bob Stephens