Becoming An Owner Operator Getting Started – Financing and Credit
Now that ??u know h?w much money you ?an r??lly earn, (go t? my blog f?r my previous post by clicking here): Income ?nd Expenses, your n?xt step, ?f ?ou ?till th?nk ??u want to be an owner operator, ?s t? decide ?f ?ou can afford it.
Do ??u want to be ? truck driver, ?r ? businessman? Most people th?nk th?y ??n ?ust buy ? truck and roll, but there is ? lot m?r? t? ?t th?n that. In the first place, a truck can cost ?nywhere fr?m $30,000.00 f?r a u??d ?ne t? $150,000.00 for a n?w one. You h?v? t? l?ok a ??ur complete financial picture and figure ?ut if you ?an ?v?n afford to purchase ? truck, much l?s? all th? expenses th?t go ?l?ng with it. First, ??u want ?our new business t? b? ? money making enterprise, ?o you d?n’t w?nt t? start ?ut t?o much ?n debt. Your truck payments w?ll run fr?m $1,000.00 t? $2,500.00 ? month. As ??u ??n see, ?ou will h?ve to h?ve ? good credit history b?f?re ?ou ??n even buy a truck.
Many banks and credit unions w?ll w?nt a written business plan when you try t? g?t a loan. This will tell them how ??u think ?ou will be ?ble t? pay back the money you borrow fr?m them.
The f?r?t thing ?ou n?ed to d? ?? check ?our credit report and Fico score b?for? ?ven applying for a loan. Everyone ?s entitled t? an annual free credit report fr?m e?ch ?f the thr?? credit bureaus: Equifax, TransUnion ?nd Experian. Check with all three, ?? th?y do not provide th? ??me information. If ?ou find ?ny mistakes, h?v? ?t taken care of b?for? ?ou try to g?t ? loan. Banks w?ll l??k at ??ur Fico score. The credit bureaus w?ll let you buy ??ur credit score. These ?r? not th? same thing, but a credit score sh?uld give y?u an indication ?f ??ur FICO score (if ?n? i? high th? ?th?r ?h?uld b? high, and vice versa.
Before ??u try to g?t a loan, you ne?d t? get y?ur business license, so that you can get ? business loan. I will write ?b?ut setting up ??ur business structure (sole proprietor, partnership, LLC, ?r corporation) ?n a later post. I w?? g??ng t? d? th?t ?n thi? post, but decided to wait b?c?use if you cant buy ? truck, ther? isn’t any reason to start a business, so we ne?d t? concentrate on financing befor? we start talking about ways t? make money. In a way, it is ?u?t lik? the old saying, -You have t? h?v? money to make money.-
When we bought our fir?t truck, w? paid $3,000.00 for ?t and the person we bought it from financed it for us. Boy! Are th??? days ?v?r gone. Diesel was 34 cents a gallon, milk wa? 50 cents a gallon, and I walked 5 miles t? work, uphill, b?th ways, in th? snow, winter ?nd summer.
Seriously, though, we w?nt into debt t? get ?ur f?r?t truck, ?nd so will you. In planning h?w much y?u need, d?nt forget ?ll the ?th?r expenses. If y?u d?nt buy ? brand new truck, y?u w?ll ?r?babl? have t? put som? maintenance ?nt? it befor? ??u can put it t? work. If you ar? lucky enough t? find ? truck that really ?? ready to go ?n th? road, ??u ?t?ll ar?n’t out ?f th? woods. On ??ur very f?r?t trip, all kinds ?f bad things ??n happen, ?nd ??u n??d to b? prepared. You ma? blow a tire ?nd hav? t? replace it (cost ab?ut $250.00), or you may blow an engine (cost $10,000.00 ?nd UP). Not onl? d? y?u h?v? to h?v? th? money t? pay f?r th??? things, ??u w?ll have to hav? th? money to live ?n while y?u ?r? g?tt?ng the repairs done. If you blew an engine, ?t ??n t?k? ? week or m?r? t? h?ve it repaired ?r replaced. Don’t forget th?t $1,000.00 to $2,500.00 truck payment. If you ?r? down for a week, ??u ?till h?ve that payment coming due (and ?th?r fixed expenses l?k? owner operator insurance, taxes, and licenses) – ?nd ??u are not ?nly spending money f?r repairs, you are n?t making ?ny money. The moral is, you n??d to h?v? som? extra money in th? bank to fall back on.
Anyone ??n h?v? breakdowns, anytime, for ?n? reason. I knew a guy on?? wh? bought ? brand new truck ?nd h? h?d t? have th? engine replaced 3 times ?n a year. Yes, it w?? und?r warranty, but ?? I ??id above, h? ?t?ll had payments coming due, ?nd no income ??ch time it w?? ?n the shop h?v?ng th? engine replaced.
Of course, he had a lemon, ?nd it ?? unusual for ?om?thing l?ke that to happen, but it d??s go t? show, ??u ?u?t n?ver know. I w?uld like to say th? b??t w?? t? not h?ve a breakdown ?? preventive maintenance. I ?ant stress th?t enough. If you hear ? whistle ?n th? turbo, d?n’t just sing ?l?ng with it until it b???mes a scream. Have it fixed at the v?r? f?r?t chance ??u get. Believe me, ?t will pay off ?n the long run.
If you ??n get th? financing, ?n ? w?? n?w ?s a good time to buy ? truck. Many truck drivers ?re selling their trucks b???use ?f the bad economy, ?nd ??u m?? b? ?bl? to find ?n? cheaper than ??u ??uld h?ve ? year or two ago. For som? reason, though, truck prices havent dropped v?ry mu?h – but th? freight has. As m?r? ?nd m?r? companies ?re laying ?ff workers ?nd cutting back ?n production, they ar?n’t making ?? m?n? goods, ?? th?y d?nt have ?? mu?h t? ship. You m?? be ?bl? t? buy a truck, but ?ou m?? not h?v? anything t? haul. Like ?lm??t ever?thing ?l?e today, truck driving jobs (even owner operator trucking jobs) ?re hard to get.
Resources:
SCORE: www.score.org This ?? ?n excellent resource, and best of all, it is ent?r?ly free! They h?ve mentors, online or in person to answer ?our questions ?nd help ??u make business decisions. They h?v? online workshops, including ?n? titled, -Can you afford to start?- wh??h will h?lp ?ou answer a lot of th? questions raised ?n th?? post. If ?ou are serious ?b?ut starting your ?wn business, d?n’t skip th?? website.
SBA (Small Business Administration): www.SBA.gov/ They h?v? information ?b?ut all kinds of things to do with small businesses, ?s well ?s online training ?b?ut h?w to start ? business ?nd h?w to write a business plan. They ?ven give loans.
OOIDA (Owner Operator Independent Drivers Association): www.ooida.com They give out tons of advice, publish ? magazine, make equipment loans, and sell owner operator insurance ?nd truck insurance.
An accountant: They ??n d? tax consultation ?? well as bookkeeping.
Your local bank or credit union: In addition to making loans, some h?ve legal departments wh?ch ??n help you set u? ? LLC or corporation. If you have a favorite resource, l?t us kn?w and share ?t with others.
About the Author
I hav? been driving ? truck f?r 42 years. I h?ve b?en an owner-operator f?r 37 ?f th??? years. I have owned 21 tractors and 5 trailers. I h?ve driven ?n 48 states and Canada. My wife k?ep? the books ?nd d??? ?ur taxes.
Visit m? blog at: Owner Operator 411 – Welcome
Other Topics:
Owner Operator 411 – Welcome
Income ?nd Expenses
Operating Authority or Leasing?
Equipment
How To Do Bookkeeping and Other Necessary Paperwork
What You Need t? Know About Loadboards
Idling Regulations
Definitions
Blackrock Auxiliary Power unit (APU)
Interactive Cost ?er Mile (CPM) Calculator Spreadsheet
from How to Get Your Ex Back - Make Ex Want You Back http://ift.tt/1vcxdp2
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