WATCH THIS BEFORE BECOMING AN OWNER OPERATOR (In-depth guide, leasing strategy, beginner pitfalls)

hey thinking of becoming an owner operator take a couple minutes and watch this video five things that you would want to know before you become an owner operator first and foremost before you even think about buying anything or doing anything is you you have to know that your life is going to change when you're transitioning from a company driver to an owner operator the responsibilities absolutely they grow exponentially as a company driver you finish your week you park the truck you turn it off you get in your pickup you go home i take my truck i go home i put it in the driveway and i don't just forget about it i've got maintenance to do i've got things to do the things that i have to do with my truck don't stop at the end of the week when i turn it off you know when i'm parked somewhere and i'm not doing anything i'm constantly looking at stuff on my truck what's this what's that um talking with other people like that they own the same trucks what problems do they have and i'm looking to see if i've got any of those issues going on with my trucks so that would be one of the first things know that your life is definitely going to change you're going to be under uh i'm not going to say a whole lot more stress but you're going to be under more stress for the next thing you're probably going to want to look at as a transitioning from from company to owner operators is what carrier are you are you going to stay with the carrier you're at are you going to go to a new carrier is the carrier that you're at going to offer you what you need to to sustain yourself or to to make the money that you want to make that you think that you're going to make so you need to to find the carrier that you're going to work at if you're new in the business start with a small carrier if you've been doing this a little longer and you know a little more you can probably go with a bigger carrier if that suits you um and then after that you start thinking about okay your truck um what am i going to be doing am i going am i going to be running flat ground running the midwest and then or am i going to be running the east coast i'm going to running down pennsylvania doing a lot of hills what am i going to be doing with that truck where is it going to be going so you've got to start looking at how it's how it's specked out the equipment that's on the truck the motor the horsepower all of that kind of stuff you're going to have to actually look at that stuff to know that you've got the right truck to do what you want to do because if you don't and here's a great example the truck i've got right now was built and spec to do something else that i was doing before this than i'm doing right now and i'm paying a bit of a price for it because i'm not getting the fuel mileage out of it i'm not getting certain things out of it that i should because my truck is not specced to to do what i'm doing now i use it for what i'm doing as the time goes because i'm going to be going into a new truck um but look at that first make sure your truck that you've chosen is is designed first of all what you want and it's designed for what you're going to be doing next thing check out your financing make sure your financing is solid um if you don't have a good credit rating you're going to pay more interest rates for trucks are not like your car i bought a new car i got 0.9 financing on that car you're never going to find 0.9 financing on a truck the interest rates are significantly higher because the the risk factor and the the the turnover of trucks coming back in of guys that don't make it while they still owe a hundred thousand dollars on a truck is much higher so the interest rates are higher know all of this get your get your financing lined up and know up front if you're going to buy the truck or lease the truck how long do you want to keep the truck what's your plan how about have a five year plan how long are you going to do this you know set that all up set that all in place and put it on paper in front of you and stick to it if you can the next thing you might want to look at is if you're going to be an owner operator you're going to you're self-employed how are you going to run your business are you going to run as an incorporated business are you going to run sole proprietor investigate both ways which way is more profitable for you or or will work better for you i run myself as an incorporation it works better for me for what i want to do i have friends that make that run as sole proprietors i see when we talk and we discuss and some of these guys are good friends of mine so they have no problem disclosing what they make and what they do and i have no problem disclosing and i can see the differences in how their business runs and how my business runs i myself personally think we do better as incorporation but that's just my opinion know upfront though how you want to do that investigate that talk to people call revenue canada they'll tell you that they've got people and get don't try to do your taxes don't try to do your own taxes too many guys in the trucking industry do their own taxes and they lose so much money pay somebody who does this don't just run down the street and grab the you know john smith accounting find a company and there's several of them around um i've had the same i've had the same accountant at the same company for my entire term as an owner operator since the day i bought first bought my truck same guy same firm and all they do is trucking trucking and farming so when things change in the trucking business they know they're up to speed they take care of it but investigate that who's going to do your taxes taxes will either make you or can can make you or break you the next thing i think that you would probably have to know about is when you're the owner operator you are the first word you are the owner um the onus is on you the responsibility is yours the truck is yours and the banks you know until it's paid for but it's yours so you gotta you have to know right up front that everything is on you if that truck breaks down that's on you if there's a problem that's on you the check engine light comes on you know you don't just pull over phone the office and go send somebody out to fix it that's that's on you um owner operators um have run up lar like i'm not gonna say large but big um bills know that when when something happens it's gonna it's gonna cost you it can cost you a lot of money i've i myself i've had to replace an entire motor out of a truck um i blew the motor out of my truck the company doesn't pay for that that has to come out of you that's you know that's that's a forty thousand dollar replacement you either you better be able to write the check or have access to funds that can write the check um to take care of stuff like that uh being the being the owner it's great it looks good on paper and it's nice to have a feather in your cap that i'm an owner operator but if you don't take care of those things or you're not able to take care of those things your truck's going to run itself into the ground you'll be broke in three years you won't make the three-year mark i think uh the biggest one of the biggest pitfalls um in our business of being an owner operator is the operating expenses the price of trucks has gone up the price of repairs has gone up everything that we do has gone up the money we make has not gone up as fast to keep up with that but it is slowly um the biggest i think the biggest pitfalls is our repairs the biggest problems we have is our repairs if you don't know when you're coming into this business what potential repairs could possibly cost you you're in deep trouble the first time that you you know you you break down on the side of the road and you call a tow truck and that guy wants 500 bucks on your credit card before he even turns a wheel just to show up and then he gets you hooked up and then he takes you to wherever you want to go to get repaired and you get a bill for twelve hundred dollars just for a tow like that's that's heart stopping the first time something like that happens and then you get somewhere to get your truck repaired and you know if you're lucky you're getting presented with a bill for three four thousand dollars five thousand dollars that's a good we i i got a friend of mine we joke around that if you can go into a volvo dealer and come out with a bill with under under a thousand dollars that's a great day that is an awesome day you do a happy dance off to the side um my biggest pitfall was replacing a motor that was 40 grand 40 000 bucks i blew the motor out of my truck and it was because i was i was pushing my equipment beyond its limits it wasn't even the truck's fault i have a truck that's built to do this this and this and i added this this and this to it and i pushed the truck beyond what it was designed to do and i blew the motor clean right out of her and it was just pure luck for me that i broke down on the qew exactly two miles from the volvo dealership that i bought the truck from i mean you couldn't get any luckier and i was able to limp the truck to the dealership and i was lucky as well because they cut me a break i bought some trucks from them and and done other things but the fact of the matter is i was not prepared when they said okay brian yeah we can fix your truck here's the estimate and this is what it's going to cost and i'm looking at you know a number that to just replace a motor that i bought was equal to what i bought my first truck for i just couldn't believe it i was like oh my god um so that is a huge huge pitfall if you're going to be an owner operator investigate talk to other guys like how much does this cost you know how much does it cost to replace a transmission how much does it cost to replace differentials you know all of the things that are regular wear and tear on your truck that are eventually going to wear out and break down know up front that when it goes this is how much it's going to cost you you're going to need to have you know 8 10 12 000 to replace you know a transmission and a differential you know the motor blows depending on what kind of motor you have you're anywhere from 25 to 40 000 bucks um and you better have it because the dealership doesn't care whoever's got it they don't care if you can't pay the truck sits right there you know or until you can tow it and take it somewhere else and so they can sit in your driveway but until that motors fixture until the repairs are done you're not going anywhere in this business you know if you're a new owner operator if you make it from the time you buy your truck when you make the decision you get everything lined up and you buy the truck you turn the key if you make it from there to the three year mark okay and and sixty percent of owner operators i'm not sure if that's exactly right 60 i think it's maybe a little bit higher 60 to 65 of owner operators fail within the first three years so if you can make it from the first to the third year you're doing well and then from year three to year five the the percentage drops significantly so the fact that i've made it past the five-year mark and i'm still going um that is my success and the fact that i'm still able to do it today at my age and run i guess successfully and i've got a good company behind me that i'm willing to work for they take care of me they treat me well i'm willing to work and go the extra mile to make sure that they make their money they get their value out of me and i guess it's sort of like a marriage like that and that would be success one of the biggest failure stories of ever uh not a big failure story but one of the the stories that that i i laugh at um is i got this friend of mine and he he's he's about a sixer he's only been driving six or seven years maybe eight and he was a company driver and he kind of did it right he was a company driver he paid attention he he learned his he paid his dues he learned the ropes and then he decided he wanted to be an owner operator um he didn't do a couple of things that i would have suggested that he do he didn't spec out his truck properly he didn't you know he he didn't do those things but he finally got his truck and the guy went nuts with chrome lights all the interior he spent thousands and thousands of dollars making this truck absolutely beautiful and it is to look at the truck it's gorgeous to look at it's a really good looking truck and then he starts having breakdowns and he can't afford the breakdowns but he would have had about seven thousand dollars in the bank if he hadn't slapped all this chrome and all these lights and all the all the interior stuff if he hadn't done all that he'd had seven grand sitting there and it takes me back to when i had one of my kenworths i had it all chromed out i had all the lights i had a hardwood floor it was absolutely beautiful and i was showing it off i was being cocky and i was showing it off to a guy one day and this old man comes walking through the yard this guy had been driving since i think jesus was around and he says he sticks his head in my door of the truck i was you know hey what do you think of that look at that it's beautiful and everything he takes one look and he's looking he's looking he sticks his head in he's he sticks he pulls his head out and he looks right at me he goes yeah that's nice he goes but let me tell you something son he said chrome don't make you any more money and it don't make you go any faster and you know what he's right i have not chromed out another truck any any chrome that's on my truck came with the truck i've not done anything to the interiors of my truck except to add a little couple of creature comforts but i don't need fancy i need a reliable truck that's going to get me where i want to go it's going to do what i require it to do and it's going to satisfy the needs of the company being et the industry doesn't decide when you're ready let me just put it that way the industry does not decide when you're ready to become an owner operator um it's suggested that you become you you you're a company driver you do that for a few years i would suggest three to five learn how to drive the truck learn to go everywhere run the east coast run the west coast run the middle run the mountains run the snow go up north run northern ontario run northern quebec when it's minus 50. do all of that and then make the decision if you want to be an owner operator [Music] most guys i would suggest if you're going to be an owner operator first of all you're going to need your down payment and depending on what you're going to purchase or lease will determine how much of a down payment you need but if you've got your down payment and then you're going to work as an owner operator i would suggest that you don't turn a wheel until you unless you've got at least 20 grand in the bank 20 000 is a nice round number number because it's not a matter of if you're going to take a breakdown it's a matter of when you will take breakdowns there are they are going to happen it's part of the business it's just a matter of how big of a breakdown and how much it's going to cost you if you can sustain yourself with some money in the bank for the first year or so or a couple of years you'll do much better but if you're having to if you've got five thousand dollars in the bank and your first breakdown is nine thousand dollars now you're running in the red and then you'll constantly be paying playing catch up and let me tell you it happened to me at one point in my career i was trying to play catch up and it's very very very hard to dig yourself out of that hole once you're in it it can be done and i've done it but it's very difficult you don't go out and shoot the wad on your first truck you don't go out and spend two hundred thousand dollars on your first truck as a new op owner operator you you make some decisions this is what i want to do and this is how long so um a good number for your first truck based on 2021 and our 2020 and 2021 standards your first truck will probably cost you anywhere between 55 and 65 000 bucks and with that most of the companies are going to want percent down if you're lucky you can get a five percent down but most of them want ten percent down so now you're looking at you know fifty five hundred to sixty five hundred bucks as your down payment and you have to figure into the equation where am i going to be working does that company have the miles in the works that i can sustain a payment of this amount you know you have a sixty thousand let's say you have a sixty thousand dollar truck you buy a sixty thousand there's gonna be tax on top of that there's administration fees there's there's a whole bunch of things that go with that by the time you got a sixty thousand dollar truck you've now got a seventy thousand dollar truck after everything's done now i'm gonna bring how quickly do i wanna pay that off do i want to pay that off in a in a two-year lease do i want to pay it off in a three-year lease so i'd break it out to five years the longer your lease the less your payment's going to be each month but the more interest and term you're going to pay in the end you take you take a sixty thousand dollar truck and lease it out for five years by the time by the time you bought paid that made the last payment you've paid for that truck twice over if you if you break it down into a shorter payment you may maybe to make a higher monthly payment but break it down and say a three year lease which i suggest if you're gonna go as a new owner operator make your first deal three years so you need to find a company that's gonna sustain you with a payment of anywhere from eighteen hundred dollars to say two thousand dollars that's a comfortable number you can run that you can run and make that kind of money and sustain yourself so the first vehicle again it all it it's all up to you as well it's how hard do you want to work you know if you if you're a single guy and you're living by yourself you don't own a house you don't have kids you don't have a wife hey go buy a big truck get a 5 000 a month truck payment live in the truck guys do it all the time would i do it i don't suggest it i don't do it um my payment is where i need it to be for the life that i live to sustain my family and work for a company i was green i didn't have a whole lot of people there to help me to pick but i guess i got lucky because the first truck i had um was just a small kenworth and i was terrified it was it was really intimidating having to deal with sales guys and my first truck was 42 000 bucks and back then in 2006 like that was a lot of money for me and that was a lot of a commitment uh to do that was a day cab two and a half years of driving the day cab i then went to a highway unit so it was a bigger truck with the sleeper and again it was more money it was a new another newer truck so it was more money and again um but you learned some lessons of what you didn't do right the first time when it came to purchasing the truck or or leasing the truck and the options and and and the specifications of the vehicle or what you're going to be doing with it so you kind of apply a little bit of that what you've learned to the next one and so much and so forth and then after that i bought the third truck another high the rest of them are all highway trucks and and it's the same thing and uh the truck i'm in now i'm just about finished with and i'll be transitioning out of this truck probably shortly and into another new truck hopefully my last truck one i'm gonna retire out of when i buy the last truck it's gonna be spec the way i want it i'll have it what i want transmission differentials fuel tanks everything motor horsepower all the little intricacy things that make up the truck so that your your truck is best equipped for the job that you're doing things that i didn't know years and years and years ago that i know now that actually by doing so and knowing these and applying these will save you money because you'll have the right truck for what you want to do the peterbilts are well built the kenworths are well built they're nice trucks but they're they're not what i want for they're not equipped and they're not the best truck for doing what i what i want to do um the volvos are more aerodynamic i find and this is just my personal opinion and some of it is market and but the motors on the volvos are more efficient you get better mileage out of them you get better wear out of them they drive better and they're just they're comfortable trucks i just want to be comfortable in my last truck if you're thinking of doing this and you're serious about it we didn't have this option back when i started but one of the greatest options that you've got available to you today is the internet the internet is fantastic it is obviously we all know what it is and we know what it does but there's so much information there's a lot of there are a lot of bloggers out there in the trucking for the trucking industry there's a lot of information in there about trucks you know when you go to spec and buy and purchase and do your trucks research them online right everything you want to know about every truck that's ever been manufactured in the history of the world is online somewhere and you can find out about it use the internet um as much as this pains me to say um facebook facebook for me is is is yeah it's something that you look at once in a while and it's funny you talk to your friends but i belong to trucking pages you know facebook pages uh in the trucking industry there's you know i drive a volvo so i belong to a couple of volvo pages but i also belong to um the canadian truckers pages i belong to flatbedding pages i belong to and when you do that it's not just going in and looking and just oh this is funny and that's cute and there's a cute little antidote a lot of the old timers or a lot of the guys that are in there are willing to share information with you freely you know you can see something that maybe somebody else is dealing with on their truck and you can go oh and you can pm them or you can go on the page and talk and most of the time they're willing to talk to you and they'll give it to you for free whereas before you got to take your truck to the dealership and have some guy plug it in and tell you this and then that or or they got it takes them two hours to find out what that squeak was and it turns out all he had to do was turn a screw you know i've saved myself thousands over the years using the internet and all the resources that it opens up to me hey thanks for watching i hope you learned something and for more great tips on on the trucking industry and what we do in this business subscribe to the et channel you

Channel: ET Transport

Views: 604,230

Keywords: becoming an owner operator, best owner operator truck, best truck for new owner operator, best truck to buy for owner operator, new owner operator guide, new owner operator tips, owner operator, owner operator guide, owner operator sole proprietorship, owner operator startup checklist, owner operator startup guide, owner operator trucking, owner operator trucking guide, truck lease owner operator, trucking owner operator, watch this before becoming an owner operator

Id: GyWhQjfVu_4

Length: 23min 38sec (1418 seconds)

Published: Thu Dec 31 2020