I’ve met a lot of sharp owner-operators over the years. Men and women who track their miles per gallon and various costs per mile, who cautiously spec equipment with an eye to the bottom line.
Landstar System’s Gary Buchs isn’t just one of them, he’s one of the best. He’s worked out a system that dictates which loads he chooses, based on his annual goals for earnings and downtime. You can read more about Buchs’ business plan later on OverdriveOnline.com, and in the May Overdrive, where we’ll feature Buchs, recently named 2016 Owner-Operator of the Year by the Truckload Carriers Association and Overdrive.
Buchs, by the way, is also a genuinely giving person. With his well-honed system for time management, he gets plenty of home time. He devotes much of it to doing church mission work, growing vegetables and fruit to support food pantries, and teaching high school students how to share the road with trucks.
You can glimpse Buchs’ personal side in a short video at the end of this post, where he recalls “the hardest job I’ve ever had.” It was shown to fleet executives at the TCA banquet where Buchs was honored. Thanks to sponsorship from Love’s Travel Stops and Cummins, he won $25,000.
Now on to his business tips:
START WITH AN ACCOUNTANT. “That’s the first person you need to hire,” Buchs says. “You can make so many wrong moves so quickly and not realize it.” He’s met new owner-operators who have no idea who’s going to do their taxes and don’t understand depreciation or even the per diem deduction.
CAPITALIZE ON TRUCKING’S WEEKLY FLOW. “Being able to deliver a load Monday morning will probably increase your income 20 percent over the year,” Buchs says. “If you start empty on Monday morning, you’re going to lose a whole day each week” because many shippers will not load after Friday. An owner-operator’s ideal week starts with loading Sunday afternoon or night and ends Friday afternoon, he says.
LIMIT DISCRETIONARY SPENDING. Because of appearances, most drivers consider his Freightliner Century “not an owner-operator truck,” Buchs says. “They overspend on their initial capital purchases. They buy the chrome.”
NEVER STOP TRAINING. “Continuing education in our business is very lacking,” he says. For example, most drivers don’t bother to read the Federal Motor Carrier Safety Regulations compilation, as important as it is, he says. Writing a business plan is critical, too, even if you’re not applying for Owner-Operator of the Year. “You’re encouraged to write a business plan now when you come into an orientation session at Landstar.”
PRIORITIZE CASHFLOW. As he considered becoming an owner-operator, Buchs says, “I saw too many people struggling to get accounts paid. Being a former business owner and trying to collect bills from customers once they had a product, I knew sometimes it’s very difficult.” Not wanting to waste time on collections was a key reason he felt leasing instead of operating under his own authority would fit his “risk management” goal.
DON’T BUY EXPENSIVE TRUCKS FOR TAX WRITEOFFS. The value of depreciating a new truck every three or four years is outweighed by the savings of maintaining a used truck for many years, he says. “Tax writeoffs don’t create wealth. Tax writeoffs don’t create long-term stability.”
FIND A TRUSTED MAINTENANCE PARTNER. When he bought his truck, Buchs found an established family-run repair shop and uses it for all maintenance, even though he had learned years ago how to maintain his own farm equipment. He computes his own time as being worth $100 an hour and feels many owner-operators are kidding themselves by thinking “they can work on their own equipment and it doesn’t cost anything for their own time.”
He praises Landstar’s requirement that contractors go through its own rigorous inspection every 120 days. “They’ll find little things before they become big things,” he says. “In the long run, sound maintenance and repairs will save money.” Buchs’ truck, a 2000 Freightliner Century Class, has been towed only once, and that was due to a stolen battery.