When it comes to starting a trucking business there is good advice, and there is really bad advice. Here is a collection of the worst advice we've heard.
You can do it cheaper than everyone else. Just drop your rates and get more freight.
Cutting rates sounds great, but you will never cut your overhead and therefore you will not make a profit. If you don’t understand your true costs it will almost always lead to bankruptcy.
Planning doesn’t matter.
Planning is an essential activity for all owner operators. You need to plan where to get fuel so you make the most of your discounts and tax breaks. You need to plan routes before you get into heavy traffic. You need to plan breaks so you aren't in trouble with the DOT. You need to plan financially for your future.
Buy an old truck to get started.
Old trucks are cheaper. But they are also more prone to mechanical failures and issues like worse gas mileage. Do you want a cheaper truck that keeps you sidelined at the mechanic's or a more expensive truck that allows you to work and bring in money?
Don’t pay taxes, uncle Sam can wait.
It might take a while for the IRS to catch up with you, but they will. And when they do, you will be looking at financial ruin. Plan for taxes and file on time every time. It isn't worth the headache to avoid the inevitable.
Federal regulations aren’t that important.
Know the laws and follow them. When you are ticketed or penalized you cannot deduct that expense on your taxes. You also run the risk of negatively affecting your carrier's CSA score if you don't stay within the recommended federal safety regulations.
Settlement money is extra money in your pocket. Spend away!
It is so easy to spend the money as it comes in, but if you do you will end up in big financial trouble when tax time comes or when it is time to do major repairs on your big rig. You cannot afford to spend your settlement money; some should go toward taxes, some toward retirement and some toward truck maintenance.
If you want some good advice, try these articles!
8 Tips for Starting an Owner Operator Trucking Business
7 Habits of a Highly Successful Owner Operator
How to Stay Organized as an Owner Operator
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