Ken's Korner

I really did it this time. I took the plunge. I bought my own truck! Well, actually it will be mine after thirty monthly payments. I’m a little nervous and excited at the same time. Nervous that I might break down and have a major repair bill that I can’t afford. Or what if I break a leg or something and can’t work for a long period of time? I could lose my truck and ruin my credit too. And what if fuel prices skyrocket? That’s a scary thought. I overcame these worries by realizing that any time you go into business for yourself, you have to be willing to take a chance. You will never succeed if you are afraid to take a risk. The excitement outweighs the fear, because if I am successful and manage to save some real money for once in my life, I could be on the road to financial security and really good credit.

I did some homework before I signed on the dotted line so I thought I would pass that experience on to you. I still have a lot to learn, but I think I learned the basics, for starting-up anyway.

Buying my own truck has been on my mind for many years. The only reason I never bought one in the past was because I was afraid of making such a commitment. I have always been a job hopper and I enjoyed the freedom of being able to quit at the drop of a hat. Plus, I was afraid I would never get to go home. But now that my kids are grown, I don’t mind.

I spent the past four months talking to every owner operator I could find. Truckstops, shippers, even on the CB while driving next to one - I was full of questions. The only problem with that technique was that they all had a different answer. One owner operator would say he doesn’t make any more money than a company driver and the next one would tell me he makes three times as much. When I asked them what their average cost per mile was, some said twenty-five and some said sixty cents per mile. That’s a huge difference!

Some of them would say, “Don’t do it. It isn’t worth all the headaches and aggravation.” And some would say, “Once you go owner operator you’ll never go back.” When I asked them about the commitment, some would say, “You’ll never go home because you will lose five-hundred dollars every time you take a day off and you just can’t afford to do it.” And the next one would say, “It’s great! You can take time off any time or anywhere you want and nobody can tell you that you can’t.”

Some said that you can never change companies because there would be a two to three week lapse in pay and that it would cost you thousands of dollars. But some said that it is very quick and easy to switch companies. Most of them agreed that the real money came two ways. First, get your wife to run team with you. That way, you can double your income and still have only one truck to support. This also allows you to keep the money in the family, versus hiring someone else as a team partner and having to pay them. The second way to the real money is to get your own authority and find your own customers. That way, you can make $1.50 to $2.00 or even more per mile, depending on what you are hauling. But keeping yourself busy, with a consistent income at that rate, may be another story.

You could work for one of the big carriers and only make $0.85 a mile, but the good news is that they (large carriers) usually have a huge freight base and can keep you running. Owner operators are becoming more and more in demand. Many companies would rather hire owner operators to reduce their maintenance and insurance costs. Plus, more drivers these days are striving for independence and a higher income.

Many owner operators recommend that you incorporate. It costs around $500 but it could save you on your taxes. More investments and expenses are tax deductible to a corporation than to a sole proprietor. Don’t ask me why, ask your accountant. Yes, you’ll need one of those too. There are some CPA's that deal exclusively with owner operators. I recommend one of these. You can find them online, in 10-4 Magazine or even through many carriers. Werner has a pretty good one. They usually cost around $75 a month. I found a place in Nevada that will incorporate me and handle my accounting needs for around $1000 a year. I’ll reserve judgment on them until tax time.

The bottom line is to always keep learning and keep asking questions. If you don’t have a lot of start-up capital, you should start off with a major carrier, because they will buy all of your permits, base plate, insurance, and they may even have a maintenance program. Then, after you save some money, you may want to consider getting your own authority and venturing out with your own customers (and of course a trailer). Or, you may want to become a fleet operator and stay with that major carrier, buy more trucks and hire drivers to run them. You’ll make less per mile, but you could make up for that in volume (more trucks) and consistency (with the carrier's huge freight base). Make sure to figure your cost per mile and save at least half your money. Uncle Sam wants his cut and you must be prepared for a major repair. The American dream is alive and well. What recession? I hope I stay this optimistic over the next few years.www.bigcitydriver.com.