Monday, January 16, 2017

Yes get your authority

Should you get your authority

When I got started 6 years ago, as an owner operator the first company, I looked at was Landstar. You get to pick your own loads, and they take like 30%. This sounded like the best thing ever until I seen an advertisement for and found out that I could keep 100% of the money and work with all brokers if I got my authority.

The Risk:
You will lose everything will never happen. You will always have your CDL that lets you get a job anywhere anytime you decide to give up. You can always resale the truck for something. I guess the biggest risk would be not being able to pay any debt you might have.

Load board success:
Most of my loads come from brokers and load boards, I have done this from day one with no experience needed and every year I have outperformed the average contract rate. Some people are quick learners, and business savvy, some are not. Some people are going to catch on faster than others. Using a load board to find loads is really simple.

How much money do you need:
No correct answer to this question. Some like to say the more you have, the better and that could be true but looking back at when I got started if I had more money I would have spent more than I should have. I started with no money at all. If my truck did not have fuel in it when I bought it, I might not have made it. I literally waited in a truck stop parking lot for a broker's quick pay to get into my bank before posting my truck because I was out of money and fuel.

Buying your first truck:
Commercial equipment can be hard to get loans for. I used 4 credit cards to purchase my truck at a local dealership. This was a ding to my credit score for maxing out the limit on the credit cards, but the good part was that I paid 0% interest.

More paperwork, more responsibility, you have to create your own customer base if you are not going to use a load board. You no longer get a weekly paycheck. Most of the time it takes 40 days to get paid from a broker unless you take quick pay or factor. You will not enjoy big company discounts that you might be getting with the carrier you are with now.

Who should not become a carrier:
Bad credit score or deep in debt.
People that are easily intimidated and can be fooled into taking bad loads.
Drivers that just want miles and money really isn't necessary.

Bad advice:
The people that hate the idea of encouraging owner operators to get their authority the most are other carriers that would make more money if you stayed leased to them. So many think that you have to be leased on to a company for a few years before you are ready to get your authority. This could be bad advice in many ways. I don't know what it's like to lease on to a company because I have never done such a thing but I can tell you that I would have made less money if I leased to a company that was only giving me a percent of what the truck was making.

Your spouse:
Most spouses at the beginning find it hard to adjust. It's best to hire a service to help with your needs then to overwhelm your spouse with unusual documents that need to be filled out. Saving money by doing it yourself can be learned in time.

How to survive:
Have extream fear of debt. Bad months always happen, and you might not make any money during these time. Always know what your rate per mile, write it down and keep track of this. Spend less money than you take in.

Here is a great place to learn more about working with brokers

Don't forget:
One day you will have to retire or will want to retire so open a SEP IRA and save. I know many countries that you can retire to for less than $1000 a month. Just think what the cost of a new truck for $150,000 invested in stocks that get's an 8% gain each year could have your truck driving life living it up on some tropical islands never needing to drive again.

Enjoy your freedom this is the greatest part of being a carrier and owning your own company. Take vacation whenever you want for as long as you want. Go find that island you want to retire to. My wife and I along with our kids all took a trip to Asia for free with club passes just with the miles saved from credit cards on the money spent on my one truck company.

You need to know how to work on trucks. This is such bull crap. Actually, this was my biggest fear. I know nothing about working on trucks and even the stuff that I do know how to do I will gladly pay others to do it for me.

My biggest mistakes were: 
Not getting pre-pass sooner.
Not getting the NASTC fuel card sooner.
Factoring my first year.

The biggest mistake of all = Was not getting my authority sooner.  
Here is a great blog on How to Get Your Operating Authority

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