Hi everyone,

I'm looking for some advice for a buddy of mine. He lives in the Sacramento area, and has always wanted to own his own business. He has a full time job which has nothing to do with the trucking industry, and is thinking of investing some money in a truck. A good friend of his is an out of work truck driver, and is very eager to drive for him. He's real close to pulling the trigger on a truck purchase, (a two or three year old truck in good condition), but has started hearing from some people that this would be a lousy time to try to break into the industry. Again, he would own the truck, but would continue working his job, and would have his buddy drive for him.

What do y'all think of this? Could they keep the wheels turnin', and should they try to hook up with a company like JB Hunt?

Really appreciate any advice...thanks!

 

Good deal(not JB) if he wants to help a friend. 8)
Very bad investment! :sad:

 

I'd say he'll be better off by buying a cheap house and renting it out to a tenant as a part-time business. Not only will he make some money, but he can also use DEPRECIATION of the house against his job income. With this setup your friend can start getting huge tax refunds from the government. I'm not kidding.

 

It is admirable that he wants to help his friend. It is difficult to advise someone without more information. If he starts this by getting his authority and little money, he could be in for a rude awakening. If he leases to a carrier that has good rates and pays percentage, he could help his friend and make a small profit, providing his friend does his job and he watches his expenses. A potential problem I can see is if the friend decides to go on to other things and he is stuck with a big truck payment and no driver.

As to whether this is a good time to enter this business is concerned, it depends. Freight and rates are soft in some areas of the country. It is not a good time to enter this business if you plan on doing so with a lot of debt. There can be advantages to coming into a new venture when business is soft. We are staying fairly busy. Some people are sitting a lot. I have one friend who is not doing very well right now and another that is doing much better. The first leases to a carrier, the one who is doing better runs his own authority. Both have been in this business for several years. The first for more than 10 years. The one who runs his authority has been in trucking for well over 30 years. In fact, I believe it is close to 40 years now. Another friend of mine is going back to leasing to a carrier and giving up his authority. He has already been told by the carrier that freight is slow in his area. He doesn't live far from Sacramento.

I would suggest your friend check with some carriers before buying a truck. See what they can offer him. Some people run I-5 and make a good living year around. There are some carriers who only run from Southern California to Oregon or Washington and do well. If your friend's driver has a good MVR and work history, he may want to check with carriers such as Landstar who have a strong freight base and a lot of agents. Carriers such as J.B. Hunt still pay low mileage rates and I don't see how any owner operator can do well with them. Company drivers may be another issue.

Doing some research in his area would help in his decision.

 

Thanks for all of the info...it's very helpful. I think I may have been unclear as to my friend's motivation for wanting to buy a truck. While he does want to help his friend by putting him to work driving, his hope is that the truck will provide a nice side income for he and his family, and could prove to be profitable enough to allow him to purchase a second, and possibly third truck, down the road a couple of years. Ultimately, his hope would be that he would have a handful of trucks on the road, and be able to quit his "day job", and live off the profits of his trucking company.

Is this realistic, or wishful thinking?

 

It is possible if he can find good drivers who will take care of his equipment and get decent rates. I don't see how anyone can own trucks and not keep a close eye on things. There are a lot of dishonest drivers in this business. It would be much better for him to get some first hand experience before he starts buying trucks. There are other things he can do which would generate a much greater return on his investment than buying trucks. You can't just turn a driver lose with your equipment.

 

Mostly second...

 

The first thing that jumps out at me is, why is his friend unemployed? Good drivers don't stay unemployed unless they want to. Otherwise, I'm with Solo...there are better ways to invest that money.

 

I would never get involved with family or friends in a business,......ever.

 

Trucks. Everybody should own one. My boss offered to sell me the one I am driving now. I pointed and laughed.