Own Authority or Under Their Authority?

[RamblingPete]

I'm starting my business plan . To keep me motivated I actually created my business name and logo so that I can remind myself , THAT IS MY GOAL .
Anyway I am working with a company now and I like the people , one , and second it's such a pain changing familiar faces and such . But I am curious , is it better as an owner to run my truck under their authority or should I run under my own ?
I've been looking into it and I get the pros and cons of each on paper , BUT on paper and IN THE REAL WORLD are never the same . My thought is leaning towards saving up 15-20k and buy a truck outright then work under their authority , then start process in another year , maybe 18 months , to get my own Authority and even ( through the bank ) buy a truck I really want for myself and hire driver for the first truck I bought . Second option is stay under their authority and still proceed with the rest of the plan minus my own Authority for another set period of time , to be decided when I get to the second stage of the plan .
What's your guys opinion on this ?

( By the way attached my logo and business name ... AKA : INSPIRATION . There is a story behind the name but that's for another thread )

 

[RamblingPete]

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[Electric Chicken]

Well I think if I ever do it, I'll start out under a carrier's authority and then work my way into full independence. I'd rather have less up front investment to see if it's even something I'd want to do long term.

I mostly just want to do exactly what I've been doing, except have my own truck so no one else can drive it and screw it up.

 

[RamblingPete]

My thought is kind of on that track . I mean I know I want my own business but if I can have my own trucks and I'm under someone else's authority it just feels like a partnership to some extent .
I mean I do think eventually I will want and have my own Authority. Guess I just want other opinions to decide if I'm thinking right . Also as to things I'm not thinking about . I mean I see the picture as a whole but even though I see the crystal I'm may be missing the spots on it , or the hairline crack ... Know what I mean ? The minute details I may be over looking .

 

[Electric Chicken]

Yeah I don't know what I'm doing either. I'm just not close enough to pick anyone's brains yet.

But I can at least feel your pain on trying to decide.

 

[Ontario Outlaw]

I'd lease my truck on under their authority. Wheels are turning and earning, let them worry about dispatching, billing, payroll, drug tests, audits, insurance etc.

Then, if you're in a good spot, start working on your authority. It's a lot easier to build it while still getting pay cheques.

My two cents

 

[mndriver]

@Mike.



Class open? Newbie....

 

[mndriver]

The simple answer.


You will have so much going on right now at the beginning, step into it with the truck and Lease under somebody else's Authority.

 

[Mike]

The answer to this is different for everyone.

For me, I was leased to Schneider for a while. That said, I could have went straight out on my own rather than going to Schneider. At the time, I had no idea what the industry was like for an owner operator, and eased into the situation with a lease truck just to test the waters. When I bought my own truck a couple years ago, I toyed with the idea of getting my own authority, but things were becoming a bit shaky in the industry in terms of rates, decided to stick with a company that had contract rates and a large freight base.

Over a year ago, decided I needed to make the leap out on my own. Nailed down the start up costs, started studying the rules/regulations, and continued to put back money.

My plan was to start out at the beginning of 2018, or at least by the 2nd quarter of the year. Then I snapped, had all I could take of changes going on at Schneider, and made my decision early. I had the truck, the knowledge of the industry, the credit, and the money set aside to live on and run the truck long enough to avoid having to factor loads or take quick pays. I also looked at the strength of the economy, and how I expect the freight market to trend for a while.

Now, I am in my 4th month and wish I would have done it sooner.

You need to know the rules/regulations of the industry though, and know them very well. You also need to be prepared to follow them, because when you make the leap, your authority isn't permanent for 18 months after you get started. A couple screw ups could end your plans before they begin good.

As a company driver, it's easy to say "f" this about alot of things, and let the company fade the heat. As a driver leased to a carrier, same thing, because it is the carrier's tail on the line when things go bad.

Not comfortable, lease under someone's authority, but make it someone that will guide you a little in order to be prepared for having your own authority.

Having your own authority will change how you look at most things in this industry. Everything will suddenly be much more important to you. Things that aren't a big deal to most, will potentially have a big impact on you.

Be prepared to run a business, not drive a truck. When you deliver a load, there is much more work to be done on that load still on the paperwork side. One item missing or not signed properly with the paperwork can turn a 30 day payment, into 60,90, or more.

Freight claims become very important as they are not filed on your expensive insurance. In addition to that, a load with a potential claim can hold your settlement up for a long time. That 7K load you did? Missing seal, crushed box, any securement issue, or bad count could have you waiting on that money for months.

 

[mndriver]

Very well put newb

 

[Rigjockey]

I am not an O/O but back in the days when I would consider featuring being an O/O I would have gone leased to a company. Right about now if I had any interest in owning a truck, I think I have gained enough knowledge to go straight Owner running my own numbers.
I would say it depends on your level of understanding the industry and dealing with brokers and permits.

 

[Electric Chicken]

My thought is kind of on that track . I mean I know I want my own business but if I can have my own trucks and I'm under someone else's authority it just feels like a partnership to some extent .
I mean I do think eventually I will want and have my own Authority. Guess I just want other opinions to decide if I'm thinking right . Also as to things I'm not thinking about . I mean I see the picture as a whole but even though I see the crystal I'm may be missing the spots on it , or the hairline crack ... Know what I mean ? The minute details I may be over looking .

Analysis paralysis.

But yeah I get what you're saying. I can't even decide whether a sleeper or day cab would make more sense for me.

I know the benefits and drawbacks of both.

 

[RamblingPete]

I definitely get what Mike , as well as everyone else , is saying . All good common sense .
I've been a manager in the past and carry that thought process with me for one , to relate to what Mike said about the F it moments. Also I haven't considered myself an employee for anyone in years . I work for no one and won't ... I invest my labor making me an investor. ( It is a very different mindset than that of someone who says I Work For with the employee thought process) , but I want to stop just investing in others because , well you know my story , tired of giving all and being a chicken bone thrown out the window at the first opportunity .
The one thing I do know for sure though is I am buying my first truck outright. I know it won't be as pretty as I want but owning it free and clear will be a major hurdle jumped .
The biggest advantage I see is if I save up what I think I will pay my first year as an owner leased out in taxes then I have a double escrow in a sense . Because I put that in a one year CD then put 25 percent of each settlement in savings . At end off year if I have no major breakdown then my savings pay the taxes , I roll over the CD for a year again and bang ... I even made money on the money I give the government.
As you can see I've been thinking about different details for awhile , ever since I lost out on that horrible lease and they took my Freightliner, actually.
But I think Mike way is definitely the way with my little investment tweaks to make side cash for the business.

 

[RamblingPete]

If you plan on being home every night then a coffin sleeper is ideal . You have a bed , JUST IN CASE but it's also extra storage . Real handy if you flat bedding

 

[Electric Chicken]

If you plan on being home every night then a coffin sleeper is ideal . You have a bed , JUST IN CASE but it's also extra storage . Real handy if you flat bedding

Yeah but the rear window advantanges can't be understated when doing rail. Since we gotta record chassis as well as box numbers.

Sleeper guys will face the chassis, write it down, then turn around to hook. With a rear window you can hook then write it all down.

It ain't huge but it's one of those small things that adds up. Kinda like 10ths of point in MPGs.

Short wheelbase and lots of windows also helps a lot with maneuvering tight spaces to get in and out quicker while still being safe.

And they're generally less expensive to buy so initial procurement is lower.

 

[mndriver]

The one thing I do know for sure though is I am buying my first truck outright. I know it won't be as pretty as I want but owning it free and clear will be a major hurdle jumped .

You'd be better off to finance the truck and then use the cash to repair it.

Plan on spending double what you paid for the truck in the first 18-24 months on repairs.

You'll need the cash.

 

[Electric Chicken]

But like you said...having a sleeper just in case...even if it's a small one...would be nice.

Groan.

Now back to your regularly scheduled programming.

 

[Ontario Outlaw]

Why not a small sleeper AND a back window?

 

[Electric Chicken]

Why not a small sleeper AND a back window?

Can't just peek out the back all easy like.

Trust me it ain't the same. Although it would be close.

Having said that, day cabs are a dime a dozen since nobody wants a used one. Anything with a sleeper has a bigger market so it costs more. And to get one specifically with a back window...that's a little too particular when you're trying to be a cheap bastard.

 

[Ranger_375]

I leased on, and will most likely only get my own authority if I'm still driving if/when where I'm at shutters doors. I knew there was a ton to learn, and figured that I would be better off leasing on so I had someone to do the big end of things, provide guidance on any hiccups (like today's pseudo-goat-rodeo of making do with what ya got vs having the perfectly equipped rig), and finally provide feedback on what's going good and what could go better.

I would say that I have more freedom now running leased than I would under my own authority, as there's underlying crapola that I just provide numbers on demand vs having to do all the paperwork, write the checks, etc etc. I could do IFTA, Oregon tax, bla de blah... but I've got enough on my plate just learning the market, what I should be worth to haul someone's stuff, etc. I had a broker about poop themselves on the phone trying to throw money at me to get me to pull a 48k steel tarp requiring load, but in the end he couldn't match the higher price that I was getting for a no tarp 6klb insulation load, going to the same town. He was flabbergasted that I was getting the rate I was getting. I have to credit the wife on it though, she's turning into a pretty reliable and effective dispatcher.

Having done the company gig for the time I did, there's no way I would go back straight company. I enjoy being a freight mercenary, and absolutely love doing flatbed as I actually get to see the gears turn on America moreso than supplying Walmart or the like.

I will second financing the truck over an outright purchase. No matter how much of a pre-purchase inspection you do, there's going to be stuff that you missed or that just flat out breaks on the rig. You will want that reserve of cold hard benjamins in your wallet to be able to throw at it to keep rolling for the first few months especially, until the truck and it's operation starts to get into the self-sustaining level where your income and reserves overmatch your initial operating capital.