Becoming an Owner Op, The plan to do it.

good morning YouTube it is me again your favorite Texas trucker and I'm gonna talk to you a little bit today about making the change from becoming a cup or being a company driver to becoming an owner/operator all right I am sitting at home in Weatherford Texas and I'm sitting in the cab of my new truck well it's an old truck but it's my new truck and I'm on home time I'll be going back out with MELAS for about three more weeks and then I'll be making the change to Triple C transit here in Weatherford Texas I'm going to start pulling drive in and then I'm gonna make a switch in a couple of months over to flatbed excuse me so let's let's talk about this a little bit okay each of you have got different levels of experience as truck drivers okay let me shut this door right here and roll my window down shut this door each of you have got varying levels of experience have some as truck drivers okay and each of you have different things that you want out of your trucking career excuse me while I come back here I don't want to run my battery's down any more than I have to and I just noticed that my lights on also okay let's try this again each of you have something that you want out of your career all right and it's all different some of you want to be home all the time some of you want to be gone all the time some of you want to make a lot of money some of you just want to be your own boss some of you just aren't happy working for somebody else you know I don't know the reasons that you might consider being an owner/operator are so varied that you know it's kind of hard to get into them so the first thing that you need to do is you need to identify why you want to be an owner operator okay because it might not be the best choice for everybody now I'm just getting into this so there's a lot that I have to learn there's a lot that I'm gonna make mistakes on the way all right and though some of those mistakes may cost me quite a bit and I'm aware of that okay I've tried to as much as possible I have tried to make allotments for that I'm trying to figure out a place I can stick all time that we're talking today again this is something I probably should have worked out before we started but all right that'll work now excuse the mess in the background if you watch my last video you know that I'm still in the process of moving into this truck and so I do have things just kind of laying around all right identify why you want to become an owner operator because if your reasons aren't solid you're gonna make mistakes that may end up costing you second is to create a plan okay to do it now I created a plan from day one I've been an entrepreneur business owner most of my life okay I don't do well working with other people or working for other people and maybe it's a character flaw I don't know but I don't do well working working with or working for other people I do best when I'm working for myself because when I'm working for myself I'm the most highly motivated to do the best that I can do right and and so for me it was a no-brainer from the day that I made the switch from my last career to coming in to truck driving I was going to be a truck driver and I was going to be an owner operator i trucking has been in my blood since I was a kid my dad was a truck driver my wife's dad was a truck driver I drove trucks when I was in army you know amongst the other things that I did was an army and then when I got out of the army I went to a truck driving school and as things you know I was planning on a trucking career when I was 20 years old but things didn't work out for various reasons and I ended up doing some other things and got caught up in life for a while and so it came to the time when my last business fell apart and I went back into the trucking and never looked back all right now I'm not the most highly experienced person out here okay there's people that are that have more experience that that are better qualified to tell you what you need to do and how you need to do it but I am a businessman and I've run businesses most of my life and most of the time it's been successful ultimately you know my last business failed but for the most part my businesses have been successful so with that said I do have some qualifications all right now when I came into trucking and when I do this in any career when any place that I'm gonna run something what I did was as I spent months analyzing and researching the field that I was that I was going into in this case truck driving okay and and I analyzed it with the idea that I wanted the best opportunities for myself that I could possibly get so when I when I went to school to get my CDL again and and when I went to school to to get back into the trucking industry I wasn't concerned with what was free I wasn't concerned with what was easy I was concerned with getting the best school that I could get and work and the starter company that was the best starter company possible and so I researched company after company excuse me after company and and I and and I researched it with several things in mind the first was what this company or whether or not this company was sufficient to do what I wanted it to do and whether or not it was going to serve me for for the next year so I looked at companies reputations I looked at company's records I looked at companies schools I looked at everything and I chose Melos transfer and I'm happy with that choice alright it was it was a good choice it's been a great company when I went it when it came time for me to to go to school then I already was studying on becoming an owner/operator so I was looking at what's involved what's the cost of becoming an owner operator yeah on one hand you own your own vehicle so you're your own boss but what does that cost alright what what does it take to do that you know you look at you look at you know these vehicles and you figure in the cost of maintenance the cost of tires the cost of fuel the truck payment itself the cost for insurance the cost for the plates cost for permits and tags and and you know if you're going to become a fully independent owner operator running under your own authority the cost forgetting your authority the filing your f to Texas you know the the cargo insurance the book and liability insurance you know that you've got to carry then you get look at the fact that you're an independent contractor and so you you've got to look at what's it going to cost for you to get health insurance what's it going to cost for you to get life insurance what's it going to cost for you to get disability insurance keep in mind the fact that you have to pay both sides of your federal income tax you have to pay your state income tax if your state has income tax you have to pay Medicare and Medicaid all these are costs associated with running a business and and so you know you sit down and you look at it and you think well what's what's the cost of operating my truck what's it gonna what's it going to take for me to to do that you know what if I don't get the loads that I need to cover my bottom line you know and and that goes back into what I was saying earlier and that I wanted my overhead to be as low as possible because the lower my overhead is the lower the amount of money I have to make to break-even is and once you know what your break-even point is once you know well this is what I have to make every week in order to just to break even then you know where your profit margin lies you know where where you you know what you need to put down to upgrade your vehicle I told you when we were going through the truck a little while ago the upgrades I wanted to make you know the I want to change it to digital gauges I want to add different switches I want to add gauges to the truck I want to you know add Chrome I'm going to probably get a brand new hood for the truck because the hood is shot I'm gonna get a paint job for the truck I gotta get some body work done for the back of it you know it's that stuff cost money and and so you've got to set money aside for that it's an old truck it's gonna need maintenance so you know I'm gonna have to create a maintenance plan and get regular maintenance done on my truck you know and that stuff is gonna cost money all right and so you sit down and you look at these things and you think you know well it can be mind-boggling you know you sit down you look at it and on top of all that you know you think well I've got rent or I've got a mortgage I gotta tell you I got foam bills I got Internet bills I got food I gotta buy I've got you know family at home you know that I've got a I've got to provide for and and you know and and so on top of your break-even point you have to make a paycheck you know or you're not getting anywhere in life yeah and then on top of that you want to make a profit you know so so you want your your home bills are paid once your truck bills are paid once your taxes are paid one your fuel is paid well then you got to pay you you know and so you've got a you've got to make a paycheck so make a plan I get a plan I'm not one of these guys that think that you have to start with three months worth of income in the house I'm sure that would be that would be great but when you figure that you know your monthly bills maybe you know on top of the truck you know your monthly bills you know may run into you know $2,000 a month maybe even $3,000 a month and then you add you know your truck expenses into it and and we're just for now we're just going to talk about being least on to another carrier that provides baseplates provides permits provides the the the fuel tax stuff provides all that kind of stuff for you so it takes a good amount of that off of you but still you got a truck payment you got bobtail insurance you might have a writer insurance policy you got physical damage insurance you know and then you've got to pay your portion of your tags and your permits and you know and all that stuff out of there and your truck payments so you know if you're like me and you keep your overhead low my overhead is low that might come out to you know $2,000 a month all right at most you know and and that's fingering in fuel and you know and and all that stuff you know two thousand twenty-five hundred dollars a month and I have I have a low low overhead if you're in a lease purchase where you're paying seven eight hundred dollars a week for your truck well then you're looking more aligned along the lines of you know three four thousand dollars you know a week that you're gonna that you're gonna be meeting all right and so yeah you got to figure all of that stuff in there you got to figure out how am I going how am I gonna do this it's part of your plan alright so when you figure in your expenses like that you know and you think well I got to have 90 days or six months worth of worth of expenses you're talking about you know twenty twenty-five thousand dollars that you got to have in the bank you know or more you know before you can even think about starting and you know I'm not that way I'm running a little tight you know I mean I've only got about two grand in the bank two grand is not enough you know to give me much of a leeway the company that I'm leasing onto is only going to pay every other month I mean every other week so you know I've got the potential of being able to clear well not clear but being able to gross you know six six thousand dollars or so a week to the truck you know but it's gonna take two weeks to get that so oh you know and then all them expenses have got to come out so you have you a plan so this is this is kind of what I did and we're gonna we're going to keep it short and then we'll move to another video another topic what I did was I saved money in a lot of little ways alright for one I did all my cooking or most of my cooking in the truck I'd say about 80% of the cooking that I did I did out of the truck and it saved me an enormous amount of money alright second thing that I did is that I don't spend change all right if I go into a truck stop and I buy something and the cost for it is is three dollars and 40 cents then I pay four dollars the 60 cents goes in my pocket that money all gets all goes into a bag every two or three months I take that bag up to the bank and I cash it in and put it into the savings account all right next thing that I did is is they didn't spend anything more than I absolutely had to spend okay and and I put two three four hundred dollars a week into the bank in order to save money alright so as I put two three four hundred dollars into the bank over the last couple years I was able to save up enough money to go down and put a downpayment down on this truck and pay enough of a down payment to keep my monthly payments down very low alright and that's what I want that's that was my goal was to either buy a truck outright or to buy a truck that had very low monthly payments so you sit down and you look at it you go into a lease purchase agreement and on the lease purchase agreement you could you could purchase a a vehicle you know put nothing down and then pay seven $800 a week for the truck all right and then you have once you finally own the truck you have a truck that's going to have a bunch of problems that's not going to be in a warranty anymore or you can do like I do and you go down you can put five six grand down on a $20,000 truck and you can pay $600 a month you know and all that extra money you know because my $600 a month comes out to you to $150 a week whereas you know your $700 a week you know it's a huge difference my maintenance costs aren't going to be that much not not the difference I'm not going to be spending you know $600 a week or five hundred fifty dollars a week in maintenance although I am going to have some maintenance cost and no it's not covered under warranty so you know you create you a plan and me my plan was for an older truck that didn't have all the computerized EGR stuff in it and something that that I would be able to maintain you know in the short term long enough to make me money okay and then you know if I need to or want to upgrade to a better truck or if I want to just put this one in the shop and have it completely rebuilt and I have that option I have that option to do exactly that so so that was my plan and and and and you have to maintain a plan second is you have to study you need to learn what the rates are coming and what rates are actually being paid out to drivers drivers who use brokers drivers who use direct shippers what lanes are paying decent and what lanes are paying trash you know and that's something that's constantly going to fluctuate you know I mean it's something that you're going to have to get into and you're going to have to learn so you need to find resources where you can learn that information how do you deal with a broker you know or do you want to deal with a broker how do you get direct shipment contracts you know these are things that you need to study and that you need to look on what what is involved in leasing onto a company what is involved in and running your own independent authority study learn talk to owner operators find out what the pitfalls or find out find out what they learned from what what kind of institutions you choose for a truck when you go to buy truck because you know it's going to be an important choice I went through four different trucks that I had lined up to purchase and and all of them were great deals and I turned three of the four down because ultimately after researching the engines I determined that there were some issues that were going to end up being very costly for me you know in in repair work so I chose not to do some of those trucks even though they were better deal than this truck and the incidents were still in great condition it's just the fact that you know the the engine types you know one of them was too weak to do what I needed to do and one of them was you know too expensive to work on to do to do what I wanted to do you know and so there was reasons for each one of those for me not not doing something with them so research your engine research your transmission know your market know what it is that you're you're gonna want to get into when you do it and then make an informed decision on purchasing the truck before you buy that truck and before you bring it home you want to know where it's gonna go to work are you gonna be in your own are you're gonna have your own authority or are you going to run under somebody else's authority it's immensely important and and if you're gonna run into someone else's Authority have all that already set up okay let's go ahead and cut this video short and then we will look at another one I'll get this one here uploaded one look at another one here in a little bit so if you like the video please comment let me know if it's been helpful to you share it like it subscribe and those of you guys out there that have more experience than me feel free to tell me where I might be wrong at and some things that I might need to focus on a little bit more alright much love y'all thanks much for watching and we'll catch you on the flipside and peace out

Channel: Steven Neill

Views: 46,749

Keywords: Owner Operator, truck driving, trucking lifestyle, Steven Neill, trucking, Kenworth, Company Driver

Id: sqijo9sDPfU

Length: 19min 55sec (1195 seconds)

Published: Fri Apr 17 2015