Haulin Assets

#57. How An Owner Operator Should Grow A Trucking Company

As always, head to HaulinAssetsLLC.com for full show notes and documents from this and other episodes!

 

Chris and Craig tackle the topic of how (and more importantly, how NOT) to grow your company from one truck to more. The basic principle is this: Chris has seen too many owner-operators try to grow their company too fast, and to step away from a driving role too soon. Chris breaks down the numbers, showing how you can grow your company--and your fleet--in a sustainable, healthy way.

#56. June Financials

As always, head to HaulinAssetsLLC.com for full show notes and documents from this and other episodes!

We're still experiencing the roller coaster ride of a tough economy and a volatile freight market. With that being said, we still made money in June, it just wasn't much. Like my dad always says, "It's better than a swift kick in the butt. The biggest difference this month that really affected our financials were much higher than normal maintenance and repair expenses.

What To Expect From Episode 56

Here are the numbers for the month. Craig and I go over them and talk in detail about what made the monthly profit lower than we like to see.

• Total miles ran – 12,765
• Deadhead miles – 1,178 (A bit higher than I like, but a lot of it was one load that was a good paying load, even with the deadhead)
• Total revenue - $19,889.62
• All-in rate-per-mile - $1.56 (Not very good, we had a hard time with rates for freight that was moving from east to west)
• Full days on the road - 17
• Partial days on the road – 4

In the end Haulin Assets realized a profit of $169.63.

#55. The Ten Commandments For Owner Operators

As always, head to HaulinAssetsLLC.com for full show notes and documents from this and other episodes!

The Bible teaches that if you live by God’s Ten Commandments, He will bless you. Similarly, if you follow my Ten Commandments for Owner Operators, you’re likely to find success.

What To Expect From Episode 55

These are great rules for an Owner Operator to live by. You don’t necessarily have to follow them 100%, but the closer you adhere to them, the lower your risk and the greater your chance of success. That doesn’t mean success will be guaranteed, because sometimes things happen that you can’t control.

However, these Ten Commandments will help you focus on the most important things that you can control that will have the greatest positive impact on your trucking company.

My Ten Commandments for Owner Operators

During the episode Craig and I dive deep into each one of the commandments. You’ll notice that the first 4 focus on finances and the last 6 focus on practicing great business principles.

1. Build a cash reserve
   1. A savings for unexpected expenses
   2. A slush fund for operating expenses
2. Pay yourself no more than what you’ve been earning as a driver
3. Maximize your revenue
   1. Direct loads from shippers
   2. Follow the good paying freight
   3. Develop great relationships with brokers
4. Manage your costs
   1. Fuel
   2. Maintenance & repairs
5. Know your numbers
   1. Use a good accounting system and keep it current
   2. Generate a monthly profit and loss statement
   3. Know your fixed and variable costs-per-mile
6. Maintain your equipment
   1. Don’t defer maintenance
7. Be a problem solver
8. Don’t blow off the FMCSA Safety Regulations
9. Be stingy with your hours of service
10. Constantly improve

#54. How I Made Over $200K My First Year as an Owner Operator

As always head to HaulinAssetsLLC.com for full show notes and documents from this and other episodes.

Over the past year, I have laid out the blueprint for the first year of operation of a one truck, owner operator trucking company. In this episode we talk about some of the keys to my success, some of the challenges I faced, and what the end result has been. I truly feel like there is no reason anyone can’t follow my plan and be just as successful as I was. In fact, I think most people can do better than I did.

Most owner operators won’t experience some of the same challenges I faced, like having to park the truck for 4 weeks because of my Army National Guard Duty or having no driving experience. The first time I drove a truck with more than an empty trailer was the day I picked up my first load.

What To Expect From Episode 54

The first year of any business is the hardest. I feel incredibly blessed that I was able to bring in just over $200,000 in total revenue during my first 12 months as an Owner Operator. Although revenue is important, the number that really matters is the bottom line.

We cover that and so much more during this episode of the podcast, where Craig and I review the highs and lows from the startup phase through the first year in business of Haulin Assets.

Here are some of the topics we talk about:

• The excitement of the startup phase and my total startup costs
• My successes
  • Making a profit (listen in to hear how much)
  • Building something that is mine and will benefit my family and not someone else
  • Saving money
• My challenges
  • My truck getting hit by a deer
  • Dealing with shippers and receivers
  • The stress of owning a business
• What I feel like are my biggest rewards so far
  • Freedom
  • Pride of ownership
  • The understanding that I am setting myself up for financial success

Financial Statements

There are a couple of things I want to point out on the financial statements you see below.

Other Expenses and Tax Benefits

If you go all the way to the bottom of the profit and loss statement, you will see there is a net income. Then, there is a section for Other Expenses that you don’t normally see on my monthly P&L. That is because it includes my annual depreciation expense for my truck and trailer. I usually only make that adjustment once a year, so it is only included on my annual financial statement, not my monthly one. 

The cool thing about a depreciation expense is that it really is not cash out of your pocket but is purely a tax benefit. The simplified version is that because of the depreciation expense, even though I made a little over $32k, the IRS only taxes me on $17,992. This is one of the beauties of owning a business, you get a lot of tax benefits that you just don’t get as a company driver.

Retained Earnings

The retained earnings on the balance sheet is negative. That is because all my startup costs are included in that. So you can see, at the year mark, I have almost completely recouped all my startup costs.

#53. Hiring a Truck Driver, Screening Drivers

When I first started working on this series for hiring a truck driver, I was only planning on 3 episodes. As I got further into the process, I realized that the screening process needed its own episode for two reasons. First, it is so important. The screening process is 90% of what sets you up for hiring a good driver vs being stuck with a bad egg. Second, it has a lot of parts to it. In this episode I cover the 7 steps I use when I hire a driver.

What To Expect From Episode 53

One of the biggest problems I see within the trucking industry is companies grow faster than their ability to hire GOOD drivers and their performance suffers and they have high driver turnover. You can never completely avoid making wrong hires, but you can greatly limit the likelihood. How? An ounce of prevention is worth a pound of cure. Take your time hiring to make sure you get the right person who is the right fit for your company.

Here are the 7 steps I use and a little about each one of them. We Craig and I go over each one in detail during the episode.

1. Develop your minimum hiring requirements
2. Post a relevant ad
3. Conduct a thorough interview
4. Obtain a PSP Report (Pre-employment Screening Program)
5. Search the FMCSA drug and alcohol clearinghouse portal
6. Screen them with your insurance agent
7. Get a copy of their MVR

To see the full show notes, including all the details and forms we mention in the episode, check out the full show notes.

#52. May Financials

May was much better than April, in fact, we were able to turn a healthy profit. The freight market was better than April, but still unstable. It seems hit and miss. One day an area of the country has decent rates and a few days later the same area crashes and rates go bad. With that being said, rates on a whole are definitely improving.

What To Expect From Episode 52

Here are the numbers for the month. Craig and I go over them and talk in detail during this episode.

•  

• • Total miles ran – 12,202
  • Deadhead miles – 1,244 (high, but not as bad as I thought it was going to be, we had to chase a few loads to get out of bad spots and to keep from sitting)
  • Total revenue - $20,489.01 Solid Month
  • All-in rate-per-mile - $1.68 (Still not very good, but at least 10 cents a mile better than last month. I really need to recalculate my cost per mile, with the reduced fuel prices, lower insurance, and a few other things, I think my cost has dropped.)
  • Full days on the road - 21
  • Partial days on the road – 7

20 full days were Mike’s and 5 partial were his. I had 1 full day and 2 partial days. (Big reason for the success. Only 3 days parked) That is a Haulin Assets Record.

In the end Haulin Assets realized a profit of $4,043.84. Almost made up for last month’s loss.

Check out show notes and past episodes at HaulinAssetsLLC.com.

#51. Hiring a Truck Driver, The Process

Hiring a truck driver is probably one of the trickiest things about owning a trucking company. The right decision will be one of the best things you have ever done, and the wrong decision could make for one of your biggest nightmares. You want to do everything you can to do it right. I'm going to give a bunch of pointers throughout this episode to help make the process run as smoothly as possible. The screening part of the process is very involved and will be covered in detail in episode 53.

What To Expect From Episode 51

As the title of this podcast indicates, hiring is a process and one you don't want to skip steps or take shortcuts on. I'm going to cover 6 steps.

1. Where to find drivers
2. Screening drivers
   1. Good ad
   2. Interview
   3. PSP (Pre-employment Screening Program)
   4. Drug Clearinghouse
   5. MVR (Motor Vehicle Record)
3. Negotiating
4. Extending an offer
5. Paperwork
6. First Day

Where to Find Drivers

The more you know about someone the better because there are fewer surprises.

1. Someone you know personally. (I won’t hire someone I know unless I am very, very confident they'll work out)
2. Someone known by someone you trust
3. A referral from someone you don’t know well or don’t trust is no better than hiring someone off the street.
4. Posting an ad
   1. Local listing, i.e. Craig’s List
   2. Facebook
   3. Indeed
   4. Think about where you went to look for your last job
5. Use a recruiter

Screening Drivers

This is probably the most important step so it warrants its own episode. We're going to cover it in detail during episode 53.

Negotiating

Always go for a win-win. You are going for a long-term relationship here.

What should you negotiate:

1. Pay
2. Benefits
3. Amount of home time.

Extending An Offer

Always extend your offer in writing. That way there is less chance that there will be a misunderstanding between what each party understood the terms to be. I will include an example of the offer letter I use.

Paperwork

There is a lot of paperwork that needs to be completed during the hiring process. It is part of building your Driver Qualification File. The audit folder system that we use at Motor Carrier HQ includes all the required DOT forms and makes the paperwork part of hiring as simple as possible. You can learn more about the system or purchase it by clicking here.

1. Application for employment
2. Inquiries of DOT regulated employers for last 3 years
3. Driving record
4. Copy of CDL (If applicable)
5. Medical examiner’s certificate
6. Medical examiner’s national registry verification
7. Pre-employment clearinghouse query
8. Pre-employment Screening Program report (Recommended, but not required)
9. Pre-employment drug test chain of custody form
10. Pre-employment drug test results
11. Driver’s previous 7 days of Hours-of-service records (If applicable)
12. IRS Form W-4, you can find it by clicking here.
13. Form I-9, you can find it by clicking here.
14. Pay documents required by your payroll system/company. i.e. direct deposit form.

First Day On The Job

There are a lot of things that need to happen before your new driver is ready to head out on the road for the first time. You want to make sure everything is covered before heading out to reduce frustrations. You can download our checklist that will help you make sure you don’t miss anything.

#50. Is My Driver an Employee or an Independent Contractor?

Classifying a truck driver as either an employee or an independent contractor is one of the hottest topics in the trucking industry. If you are considering hiring a driver, this is an important episode. To help us out with this topic, we've brought in the big guns. Ryan Nelson, president of the Utah chapter of Employers Council, has lots of experience and expertise in the trucking industry and joins us to help shed some light on this complicated topic. Employers Council is a nonprofit that provides employment law resources to employers. You can learn more about them at EmployersCouncil.org.

What To Expect From Episode 50

You may have heard the saying that words have meaning, well, this is an example where the words have a lot of meaning. If you aren't familiar with that phrase, I use a military example to explain it in the first few minutes of the episode. Too often trucking companies use these two words as nothing more than labels, which has gotten a lot of trucking companies into serious trouble. How drivers are classified is a big decision that has significant consequences.

The federal government and each state has their own test to determine if someone who does work for you can be classified as an independent contractor. We focus on the 11 factor test that the federal government uses. The 11 questions are listed below. Ryan uses a great analogy of the old sliding scales, remember them from gym class or the doctor's office? If not, check out a picture of one, and the rest of the show notes including the 11 questions, at haulinassetsllc.com.

#49. Hiring a Driver - My Philosophy

Hiring the first driver for your trucking company is a huge step, and you don't want to screw it up. It is one of the most critical steps you will take if you want to grow your company. This is the first episode of a three-part series on hiring a driver.

In the next episode, we will talk about how to classify your driver, as an employee or independent contractor. This is always one of the hottest topics in the trucking industry. The third installment will cover the actual process, the nuts and bolts.

What To Expect From Episode 49

We talk about several subjects in this episode. Here is an outline of what we cover.

Is Hiring a Driver the Right Move For Me and My Business?

You have to ask yourself if this is something you want to take on. Like almost everything in life, there are pros and cons. There are several things you need to consider like:

• Why would I want to?
• Do I have what it takes to be an employer?

As far as having what it takes, some skills can definitely be learned, but being a manager/employer is hard. There are several different skill-sets required, and often, they are a bit conflicting. Most people are good at one or the other, but fewer are truly great people managers who are good at both.

My Philosophy on Working With Employees

"An ounce of prevention is worth a pound of cure" applies in this situation, like so many others. One of the keys to success is taking your time, don't rush the process or you are likely to end up with buyer's remorse.

We talk a lot about establishing a foundation of trust. I talk about one of my favorite business books, "The Speed of Trust" by Stephen M.R. Covey. If you have not read it, you should. It is very eye opening. When you have employees you can trust and they trust you, magic happens. Getting to that point can be a challenge, but it is well worth it.

We also talk about putting the trust ball in your driver's court. Let their behavior and actions dictate how they are treated.

#48. April Financials, Haulin Assets Catches Covid

April was a tough month, the first time Haulin Assets lost money in a month. Luckily, the freight market seems to have hit bottom in April and things are picking up. The other good news is that we are still up $9,562.14 for the year.

What To Expect From Episode 48

There are a lot of reason April was a bad a month. It's all tied to the Corona Virus hitting the US in full force and wreaking havoc on everything. Rates were bad and freight was hard to find. To compound the problem I hired a brand new driver, Mike, who is awesome. The timing really could not have been worse for hiring a person. When I extended the job offer, things were still going really well so he put in his two weeks with the other company. By the time he was ready to start running with me, freight was really bad. I ended up paying Mike for almost two weeks while the truck sat because I wasn't willing run for rates that low.

Trucking companies taking ridiculously low rates is one of the reasons rates drop and I won't participate when rates are so low you can't make a living. That's bad for all of us. I stuck to my principles and I didn't want Mike to be the victim of that. Last thing I wanted was to hire the right person and then have him leave because I wasn't taking loads. So he got paid while the truck sat, which wasn't good for the bottom line.In the next few episodes I am going to talk about hiring a driver and will go into my hiring philosophy and the type of person I want working for me. Once you understand that, you will better understand why I was willing to pay him for a few weeks. I think it is a good decision in the long run.

Here are the numbers for the month. Craig and I go over them and talk in detail about how Covid-19 affected everything.

• Total miles ran - 6,644
• Deadhead miles - 714
• Total revenue - $8,285.50 (Lowest month ever)
• All-in rate-per-mile - $1.24 (This number is misleading because there were 1,430 miles for a load ran at the end of April that did not deliver until the 1st of May so all the miles show in April, but there revenue didn't count until May. If you take those miles out to make it a truer representation, the number is $1.59 a mile.)
• Full days on the road - 11
• Partial days on the road - 2

In the end Haulin Assets realized a loss of $-6,010.76. That's my first loss, hopefully they are few and far between. Like I said in the beginning, the good news is that we are still up $9,562.14 for the year.