For those of you who run your own authority, what would you say was your total start up cost? If you could list everything from the truck to lunch food that we be very helpful.

 

try here:

:arrow: http://www.classadrivers.com/phpBB2/viewforum.php?f=5

 

I started from scratch and DogHouse in the Owner Operators section started from scratch also. I won't go into detail listing everything but it took me at least $100,000 to get going and I'm guessing it took DogHouse pretty close to the same if not more.

Hope this gives you a little insight into startup costs.

 

I'm sorry but I find this very hard to believe that it takes this much to start up. I'm not saying you didnt spend this much, but could you list your expenses in somewhat detail?

I'm also not yet looking for all the bells and whistles that you seem to have bought for your biz, just the absolute basics to start.

 

Jamspeed,

They're including the cost of buying truck and trailer for cash.

 

If you do a search, I believe we have listed some of the costs associated with getting and running your authority. I paid cash for my first truck and trailer. There are a few others on this board who have done the same thing. Most will finance their purchase. You can get your authority for $300. The kicker is that you will need cargo and liability insurance. Rates vary widely according to the type of freight hauled, credit rating, experience and where you run. I pay less than $4,000/year per truck. Some on this board have quoted rates as high as $36,000. Most seem to be around $10-14,000/year. If you finance your equipment purchase you will need good credit and from 10-30% of the purchase price for a down payment. Base plates and permits can run from $1,100-2,200. In some areas he rate could be higher. 2290 or heavy highway tax costs $550/yr. The price of your equipment will vary according to they age and type, such as reefer, flat or van. You can buy a used van for as little as $4,000. A good used flat will usually run about $10,000 plus securement equipment. I haven't seen any reefers for less than $6,800. Most reefers will cost more. Trucks can vary from $12-140,000 depending on whether you buy used or new. You can buy a good used truck for less than $20-25,000. You will need working capital, mostly for fuel. You should burn about 120 gallons per day with average running. Unless you factor your loads you should count on having sufficient capital to run for at least 60 days. It is also a good idea to have money set aside for a major repair. Most seem to thing a minimum of $10,000 for maintenance to start. If you eat in truck stops count on spending about $10-12 per meal. Costs will vary according to the type of operation you run and how well you manage your business and resources.

 

Truck $35,000
Trailer $17,000
Insurance $8,000
2 months worth of fuel $15,000
2 months worth of personal bills $6,000
Inspection for truck $90.00
Inspection for trailer $75.00
PM on truck(major one) $300.00
PM on trailer $75.00
Misc repairs $2,000.00
Rebuild 5th wheel $700.00
Tarps $900.00
Chains and straps $1,000.00
A few new tires $600.00
2290 $550.00
Plates and registration $1,500.00
Local town registration tax $1,200.00
Parking spot rental $500.00

Just the figures above totaled over $88,000. Below I listed just some of things I had to buy or fix. I had about $120,000 in cash and it all went pretty quick. Keep in mind that the checks don't start rolling in for between 6 and 8 weeks from the time you haul your first load.

You haul a load that takes 1 week to deliver then you send an invoice which takes 3 days for the mail to deliver plus 3 days for the check to come back. Once they get the invoice it takes them 3 to 5 days to realize you actually sent an invoice then it's at least 30 days from that point before the check goes out. Another 3 days or so for the check to clear your bank when you deposit it.

In the meantime all your personal bills still have to be paid.

Here is just a small list of other things that needed to be fixed, replaced or I just needed.

Fire extinguishers, TV, DVD player, inverter, mattress, sheets, pillows, blankets, comforter, coffee machine, microwave, printer, fax account, internet account, laptop, extra clothes, winter gear, stock truck with supplies, GPS, Sat radio, Stereo, CB, cell phone, atlas, truck stop directory, floor matts, new winshield, 6 billion stainless nuts, bolts and screws to fix stuff, new trailer mud flaps, new truck mud flaps, bungee cords, replace head lights, marker lights, air line replace, electrical line replace, winter chains, chain hangers, spare tire, pogo stick,flush radiator,glad hand replace,truck shocks, replace U-joints, gloves, edge protectors,ladder, extra oil, extra W/W fluid, extra antifreeze, baby wipes, paper towels, mirror, clock......yada yada yada

I could go on and on with a ton of other stuff.

I was VERY lucky that I was on the road for many months with no breakdowns which would have required more cash. I now come home every so often with somewhere around $10,000 worth of checks waiting for me.

My point is that it takes many many months before your into the cycle of checks waiting for you and having enough cash to head back out onto the road again with enough money to pay for fuel and everything else without having to wait for more checks to come in.

I'm sure DogBreath is shaking his head yes on everything I wrote also.

I'm not trying to come across as negative. I had the money, just didn't think it would all go starting up. I could have gotten away with much less but that's not me. I have to have it all or I would have been freaking out.

 

If you have good credit you can finance your truck and trailer. You will still need from 10-30% for a down payment. Most insurance companies will also allow you to make monthly payments with a good down payment. You will still need funds to buy fuel and make any needed repair. At today's fuel prices you can easily spend from $1,200-2,000 per week for fuel, depending on how hard you run and where you go. You could factor some of your loads, but will lose some of the profits. Some brokers also offer quick pay but will discount their bills. You don't want to start in this business without any cash. Even if you finance your equipment and insurance, there will still be a lag in the time that you get a load, deliver and bill it out. You will need cash to pay for your base plates and permits. If your state charges sales tax on equipment then you will probably need to have money for that as well.

Although I paid cash for my first truck and trailer, I still had to come up with money for base plates, insurance, 2290, fuel, etc.,

 

If you talk to any good accountant they will tell you after startup cost, as mentioned above, you should have at least 6 months reserves cash for operation expense. Some will say 1 year. So SteveBooth numbers are not to far off.

IMO this is one of the biggest reasons most O/O fail. They try to get in cheap.

kc0iv

 

INVALUABLE information guys/gals. Thanks so much for taking the time to give me a MUCH better picture of what I would be geting into.

Do any of you run part of the year only? I already have a seasonal business and was lookng for something to do during the winters. Could this be done for say 4 months out of the year? I'm pretty sure one can be insured for part of the year and re new each year if needed.