Dollars & Sense

Kevin Rutherford | May 01, 2012

PROS. The biggest advantage for some owners is a higher profit margin. There is no carrier taking a piece of the action before you get your cut.

There is almost complete freedom on how you run the business. You decide what equipment to buy, what freight to haul, and when to work.

CONS. That freedom also brings more work and complexity. No longer do you call dispatch for your next load. Do you want to develop your own customers, soliciting freight directly from the shippers? Or do you want to work through load boards or brokers? The latter is easier, but also means giving some revenue to the broker.

In addition to finding and developing customers, you will be responsible for invoicing, collections, compliance, safety, drug testing, hours of service, licensing, permitting, fuel tax and mileage tax. And the list goes on.

Possibly the biggest reason for failure is cash flow. Many owner-operators are used to being leased to a carrier that pays every seven days and will advance money. But when you are dealing directly with shippers and brokers, you may wait 30, 60, 90 or even 120 days to get paid. Sometimes you may not get paid at all.

SMALL FLEET. You can build a small fleet while being leased to a carrier or you can do it with your own operating authority.

PROS. The biggest draw is that more trucks can generate more revenue. Managing a successful fleet can enable you to spend less time on the road, or even none at all if the fleet grows enough.

CONS. By far the biggest risk and responsibility is adding employees. You will be competing with thousands of fleets. Recruiting and hiring drivers consumes a lot of time and money. Cut too many corners and bad drivers will break your business.

Growing a business is a lifetime venture. It’s challenging and potentially rewarding. The beauty is that the choices are all yours.

Kevin Rutherford is an accountant, small-fleet owner and the host of “Trucking Business & Beyond,” which airs on Sirius XM Radio’s Road Dog Trucking Radio. Contact Rutherford through his website, strives to maintain an open forum for reader opinions. Click here to read our comment policy.