Hi All,
My husband bought a Pete this summer for short money and has rebuilt the engine and brought the truck back to life. In the meantime, I've been getting smart on what paperwork we need to file to get him on the road. Hes not computer literate at all and the task has fallen on me to research the registration and insurance process. We didn't anticipate it being so costly before we could even hit the road to make money. Our current status is that it is registered IRP with just our state of residence and a neighboring state, and minimum insurance to have it registered. We have a DOT # but not the authority yet, as we do not yet know what he will be hauling and don't want to pay $300 each authority. Bills are adding up quick. But we're not too far into it that we can't recoup. All in all we're in about $15,000 using our personal savings, an interest free credit card, and borrowing from family (He paid $5K for the truck and about 10k in parts). I'm sure we could sell the truck for at least this and pay off our debts and he can go back to being a company driver. But I know if we back off now we'll regret it. He's so happy and proud of this truck. What I want to know is, Is the money as an O/O really worth it all? Is he really going to have the freedom to be home more? He keeps reassuring me that the business is "big money in, big money out." But right now all I'm seeing is big money out and I'm scared. Whats your take on our situation? Should I stand by my man and see this through, or should we get out and run as fast as we can?

 

You should always stand by your man, it's the only way, you could possibly make it. There is no simple solution to your situation. If you stay, you COULD get hurt really bad, but it's COULD be a success, as well. To bail out, probably will be a safer bet, but you still gonna regret it, for the rest of your life, and that's for sure. So there is no real wise advise, it's all up to you, how you feel about it. Good luck to you anyway!

 

What he said!

You haven't said where you are located. That is a biggie, regardless of what type freight you decide to haul. That right there...The type freight you are going to haul...should have been your first decision.....not the tractor. Now you have to make the decision to keep putting the feet forward and follow through wth the process. You can still lease the tractor into a couple different outfits, if you are in the right spot and the tractor meets spec's. The older the unit, the fewer options. Sometimes leasing into a decent Carrier, gives you the opportunity to learn the things you need to learn. After learning....Then you can finish the process, and get your own authority and take that last step.

my two cents

 

If you run your own authority it helps to have some computer savvy. If you run interstate you will need federal authority which costs $300. That is a one time filing fee. Some states offer intrastate authority, but to my knowledge none charge as much as federal authority. Two of the most expensive are California and Texas. I believe that California is $150 and Texas is $200. You don't need intrastate authority for most states. Intrastate authority is where you pick up and deliver the same load in the same state. No matter what you haul, if you cross state lines you will need interstate authority which is the $300. Unless you haul hazmat you don't need any additional authority starting out. I would suggest staying away from hazmat due to the high costs for a single truck operation. There are also other compliance issues which you may not want to have to deal with starting out. All you need is $300, registered agents and insurance.

In any case, if you decide to get your authority you will need $1 million liability and $100,000 cargo as a minimum. Costs can vary widely, so I suggest you check around should you decide to pursue getting authority.

Your husband could lease to another carrier for a while and that would be a good way to put some money back, pay back those whom you have borrowed to get to this point and start with a clean slate. It sounds like your husband bought an older truck. Some carriers have age restrictions. Others only require that the truck looks decent and can pass a DOT inspection. If you want to get a taste of how it would be to run your authority an agent based carrier such as Landstar would be a good place to start.

Most of us who run our authority have our own trailer. If you lease to a carrier you won't necessarily need to purchase a trailer, depending on the carrier and type of freight he wants to haul. As far as the big money is concerned, you won't get rich but you can earn a good living. There are so many variables when it comes to running a truck. Some do well and others fail miserably. This is a very unforgiving business. The failure rate is high. You are starting out with lower debt than some whom I have spoken over the years. If you are frugal with your money and get with a good carrier then you could do well as an owner operator. It would also require less money going in. Some carriers furnish base plates and permits. Others will front the money and take a specified amount out each week. If you run your authority you will need to front the costs for all those things yourself. You will also need to have the money to front for fuel and running expenses until your money begins to come in if you run your authority.

There is a little more paperwork running your own authority. Personally, I think that it is good for some people to start by leasing to a carrier before getting their authority. It makes for a good bridge.

It is critical for a driver or owner operator to have the support of his family. It can be taxing on a relationship with this type of lifestyle. There are no guarantees of being able to get home more frequently than he can as a company driver unless he wants to do a lot of deadheading. I have a friend who runs his own authority and he manages to get home almost every weekend. I know others who find it difficult to get home more than every 2 weeks. It all depends on the freight and what rate you are willing to haul freight. You can sometimes get lucky and get something that will take you through the house. Other times it becomes more challenging. Things do go much more smoothly when an owner operator has the support at home.

He can lease to a carrier in a matter of days and be making money within a week or so. If you apply for authority it will be several weeks before you can get your authority back. You have come this far, you may as well see it through. You will never know whether you can be successful at something until you try. Since you have invested in a truck I would give it a try. He needs to decide what type of freight he wants to haul. Most carriers pull vans. He could pull a reefer or flat bed. Most carriers who pull vans furnish the trailers. Some carriers who pull flats will want you to either have your own trailer or rent one of their's. Leasing to another carrier would be the fastest way to start getting money back in. It would also give you more time to research what you want to do.

There are no guarantee's. Life is a gamble. When you start a new business venture there is no way to tell whether that business is going to be a success or not. Sometimes, not trying is worse than trying and failing. I would suggest that you give him all your support and encouragement. I have been in business most of my life. When my wife and I were first married she was scared due to my being in business. She had always been used to those in her family receiving a guaranteed salary. You won't necessarily have that when you are in business, especially starting out. My wife has obviously changed her attitude. She has seen that the money will come in as long as I work. It may vary somewhat from one week to another, but she has become much more comfortable with it over the years. In fact, I don't think that she would want me to work for someone else at this point. She understands that I can make more working for myself than I would working for someone else. To be honest that isn't always the case with everyone. You must treat this as a job or business. The money will not come unless you put forth the effort. As long as you work at it the money should come.

 

Thanks for the insight. For what its worth, we're in Mass and he's leaning toward hauling overseas containers out of Boston and through new england. And the pete is an 86 and in beautiful condition, inside and out - but I have seen that many companies dont want older trucks so we realize there are some limitations. After reading your responses I think it best we start with running under/leasing to someone else for now. It could be a full time job for me to establish and maintain his authority, and we have enough on our plates right now. And he does want to get his own trailer eventually, so maybe that would be the best time to make that last step.

I also thank you for the words of wisedom about seeing this through. I love him so much and want to see him continue to do what he loves. We might have a few things going against us - but we did get into this for less money than most, and he has his mechanical skills on his side, and we have maintained very low household expenses (no other debt or payments besides this). I also have a good job myself. Enough said, WE'RE GOING TO SEE THIS THROUGH!

 

Good luck to you both, Andie. As a note, containers typically don't pay all that well. If you need to stay in New England then I would check with some carriers who may have regional freight that you could haul. There is a company listing on this forum which lists basic requirements for most of the major carriers. Many carriers won't accept an older truck. If your husband has done much work on the truck you could show a potential carrier the receipts and that might sway them to allow him to lease on with them. I know of one guy who did that when the carrier he wanted to lease on with would not accept older trucks. Breakdowns are their primary concern when it comes to older trucks. If you can show them that the truck is in good shape and looks good then that might be all they need to give him a try.

 

Mechanical skills will help. I'm no diesel mechanic for sure, but I can do some of the minor repairs and it saves a lot of money. Just yesterday though, I had a repair (bad fuel injector). The cost of the part was $336, but it was a 5 hour job. Most of these shops out on the road charge $100+ per hour. By the time they added labor to the bill it was almost a $1,000. As long as your running for decent rates, you can absorb these types of costs without it hurting you.

The best advice I can give anyone who goes from a company driver to owner operator is to keep putting money back. A company driver is used to bringing home $600-$1000 a week generally. As an owner operator, you may well bring in $3,000 per week at least some weeks. Some bring in more than that every week. BUT....IT'S NOT ALL PROFIT!! Don't make the mistake of thinking you can pay for the fuel and the rest is profit!! Pay for the fuel, take only what you have to have as a salary and put the rest back for a bad day. I can assure you, there will be a bad day. I personally feel very uncomfortable when my operating account gets under $10,000. It does on a regular basis get under that, but I work hard at getting it back up there. When I started out 4 years ago, I wasn't too far financially from where you are. It's a struggle to get paid out of debt and to get a cushion built. I would suggest you try to build at least a $3,000-$5,000 cushion even before you pay off any debt. If the truck breaks down, you have to have money to repair it or you have no income to pay toward the debt anyway.

Your truck will have a mechanical engine in it, not electronic. That will make it quite a bit cheaper to work on, but you may experience poor fuel mileage. The fuel mileage will cost you more in the long run. If you can get it to over 6 mpg, I would be happy with it. If not, it's probably still a good place to start since repairs will be cheaper and easier to absorb for now. After you have established yourself and are financially stable, you can start looking for a newer truck that should be more fuel efficient. If you can get 6mpg or better and can keep busy staying somewhat local, I would stay with that mechanical engine as long as he wants to keep the truck. Very few of those trucks will get 6 mpg, but I have seen some do it.

That's about all I have to offer. For what it's worth, you have some good people her on CAD that offer a lot of good advice. You are doing the right thing to research, research, research. Ask a lot of questions. You will thank yourself for it later.

And by the way...GOOD LUCK!!

 

Andie here is my 2 cents worth
i have my own truck ( not quite paid for yet)and a older trailer,a 1999 Wabash that is paid for

I knew I would have to make it work,in other words I would have to do the work
I went in the hole some when I first started because of in experience with certain business matters,like I misfigured how much fuel would run me a week..
but I have held my own and had some great months
this past June and July I was doing ok,making at least 4000 a week with my best week at 5100 gross
bear in mind I just started out on my own last fall.
Today, it is a lot better weekly and I am home every weekend and sometimes a night during the week
I am in it just as much for the freedom as the money
we are not getting rich,just making a living...but I am free

 

All I know, is that if I switched from O/O to company driver, I'd have to work 7 days a week in order to make that same as I do now, working 4-5 days a week. :lol2:

 

Just keep in mind to put some money back for breakdowns. I know most of you prepare for this. I just know I have friend here locally who didn't listen to me. He is O/O and he would most always spend all he made and he made fair money, well his old Cat laid down and guess what he has nothing. Been telling him 3 years to put back but didn't. Even if only $50 a week he would haver had $7,500 to use towards repair. All you O/O here know to put more than that back obviously because these beast are not cheap to fix!