The dream to start and run your own business as an owner operator or fleet owner is a powerful thing. But dreaming and doing are commonly separated by one critical element – money. More specifically the money needed to launch your new business, sustain it and help it grow until it reaches a point where it can consistently sustain itself and you at the same time from its own revenue. That usually means tens of thousands of dollars are needed to just get the business off the ground in the first place, then tens of thousands more to cover operational and emergency costs over a period of several weeks to several months and beyond.
So how are you supposed to come up with the money you need to get started?
- Borrow It – This is the route most people take, in one form or another – and though it is a very popular way to go, it also is the downfall of many right out of the gate. Having huge debts and loan payments immediately will strangle your cash flow and put you in a position where you struggle just to survive from day one, and that is a terrible way to start a business. If you do decide to borrow money to start your business be certain you know what you are getting yourself into, what the payments are actually going to be and be very conservative with your borrowing. In other words, if you are determined to borrow money – then at least borrow as little as possible and even then pay it off as fast as possible. Common mistakes are buying equipment that is too expensive and that is not necessary, and even then overpaying for it relative to its actual market value at the time of purchase.
- Lease Purchase – More often than not this is a terrible way to attempt to buy equipment. For starters, you are typically trapped and captive to the one carrier that is providing the program. Should you decide to leave you will usually be required to leave the truck there and may incur additional fees and costs that can be expensive. Even if you stay – the company controls the freight you get access to and as a result they also to a large degree control your fate. While there are a few such programs that can be beneficial – in very rare cases – most are designed to stack almost all the benefits toward the carrier and little if any in favor of the participant driver.
- Become a Company Driver First – This can help solve many problems. First, it can absolutely help you produce the money you need which you can save up and buy your equipment with cash when you have it, without any debt at all. That is powerful. It can also give you time to develop all the other critical skills and knowledge you will certainly need to be successful. Beyond that, it gives you an opportunity to actually scout out specific customers, begin building relationships and developing your freight lanes – all before you ever haul the first load under your own authority. The challenge is that this takes time and effort, and patience. It may also require serious modifications to your existing lifestyle so you can afford to save most of what you earn instead of just paying other existing expenses and getting by but not ahead. This requires thought, planning, and serious effort – but it can be a good way to go. You can also become a rolling recruiter and or road trainer in the process and earn even more money faster – while developing even more skills that you will need for your own company too.
- Start A Freight Brokerage – The costs for starting a freight brokerage are FAR less than they are for starting a trucking company as a motor carrier with your own truck and trailer or a fleet with multiple trucks and trailers. The operating costs are also far less. You don’t need the same levels of insurance, nor do you need fuel, tires, maintenance, roadside repairs etc. You just need your authority, a business entity (LLC, Corp etc.), a surety bond, a computer, software, a good internet connection and phone system along with some basic office supplies. You will need specialized knowledge which you can get through courses and books with determination. Then you will have to supply some serious effort over a period of time – still learning as you go. Before you know it you will be building your customer base – and your revenue in the process. Eventually, you will have more than enough to get your motor carrier authority and begin operations with your own truck – or trucks – without any debt at all. If you are willing to put in the work and the time to make that happen, that is. It is possible to start a freight brokerage as a part-time business too until it is earning enough to justify leaving whatever it is you do now.
- Work as An Agent – You may decide to work as an agent of a freight broker and as such you work under his or her authority – so you do not need your own, and you can avoid the costs of having to get your own bond etc. On the plus side, you will have access to tools, information, training, and support as well as the opportunity to earn income based on your own skills and abilities along with your drive and determination. As you gain experience you can continue to save up money to go to the next goal as you see fit. That may be to become a broker yourself – and you will already have the knowledge and skills and possibly a large customer base before you even open your business. You may decide to save up and buy your own truck and trailer or start a fleet with owner operators.
- Start A Dispatch Service – Similar in many respect to a freight brokerage – but there are some technical differences that allow you to do it without needing a bond, or authority at all. You are simply an independent contractor working on behalf of several different independent owner operators with their own authority to help then get their loads – for which they each pay you a fee. This does, however, require every bit as much specialized training and effort as becoming a freight broker does – and even more care. It will typically pay you less money than you can make as a broker – but it will give you experience and money that in time can both help you go to the next level. Maybe get your brokers authority after a while, then take that as far as you wish and need to before starting your own trucking operation as a motor carrier too.
- Fleet Owner From Day One – Once you have your authority and have met all requirements to become a motor carrier you can begin leasing on owner operators who will run your loads under your authority. You do not have to buy a single truck or trailer until you can afford it and desire to do so. However, you do need a TON of education and information to have a chance at doing this successfully – and it will NOT be easy. It is quite possible though. Just be sure to set up an honest and fair program that is profitable to you while at the same time a good deal for your owner operators too. Whether this is right for you or not only you can decide, but this route requires far less money up front than starting with your own company truck or trucks. I will caution you though – this is NOT simple to do, if you do it right that is, and doing it wrong – well lest jsut say you dont even want to go there…
The point is that you can find a way to fund your business if you are serious and want to do it bad enough. There are multiple options available to you right now, including these and many others not mentioned here as well. Its a matter of finding one that will work best for you right now and then use that opportunity to move you to the next step. Step by step you keep moving from one goal to the next until you have your dream company launched, operating successfully and growing.
When you are ready to take the next step visit us at L.D. Sewell.com for additional resources and training. We have many trucking and business related courses, checklists, reports and books and other resources and we are adding more all the time. I also offer coaching and consulting on a very limited individual basis.