Expanding the fleet

Hope the best for you. I did not only added some OO's and a couple of more trucks.
I kept running myself , while wife and one more employee ran the office. It worked, but after a few years, I told the wife, lets just go back to what I can do myself, the end result was not a heck of a lot different, a little less money, BUT a whole lot less trouble, and no TRUCK DRIVERS to babysit, even though I had good ones, they are still a pain and a 24 hour a day deal.

 

I wouldn’t say there are any hidden costs.

Mostly it’s just a lot more work and the numbers get much higher so any mistakes made are compounded very quickly. You also need to know how to deal with different personalities and find a middle ground between making sure the job gets done and not being an ###.

I guess first big step is do you have a yard to park everything? Do you run on your own money or factor? If you still factor IMO forget about it your not well enough funded yet. Only expand at the rate possible to run on your own money. When you have say 3 to 5 trucks it can be tough if you have a lot of turnover and trucks sit for a while. Your cash flow becomes like a roller coaster. Run lots of loads for 60 days and put out a ton of money then a guy quits or two guys quit and you have a large percentage of your fleet sitting. Well those checks finally start coming in and the money looks real good because your expenses are now way down. Then you get the trucks filled back up and your running hard again and putting out a ton of money and all of a sudden checks quit coming in so bridging that time gap is crucial and also tough.

 

If I was going to scale up beyond my one truck my goal would be to scale up to the point of self sustainability as quickly as possible so the business could run with little to no input from me if needed. I would aim for
-Two dispatchers
-One paper pusher to handle all the compliance record keeping and invoicing.
-I'd probably outsource book keeping to a third party firm to avoid embezzling by the paper pusher.
-A fully staffed and equipped shop with a shop manager
-30 company trucks or 40 L/O

If you're going to keep working inside the business as a technician you're better off staying with one truck IMO. "The E Myth" really goes into detail on this.

 

My advice that works for a dozen of us fleet owners is as follows and is scalable.

1 - get your paper work house in order. Meaning that your paper work for the fmcsa/state needs to be well organized, accessible and backed up.

2 - get your financial house in order, setup your ledger (software), setup your performance metrics and know exactly where everything is every week to know when you are having issues or not on an individual, driver or owner basis. Back up your data.

3 - learn how to regularly communicate with your drivers.

4 - get a lawyer involved with crafting all legal documents.

5 - if you are working with owners, remember they are not employees, they can and will refuse work, some often others rarely. And always make sure it is clear what your expectations are with them, discuss it with them, make sure you are on the same page, and setup a system for them to feel they are part of the success.

6 - don't think that you are going to make a crap load of money, put a realistic goal on the board to reach, 11% max when starting out, your overhead may eat up a lot of the share your carrier receives.

I have a lot more but I am out eating breakfast and food is getting cold.

By the way, others will differ with my comments but these things work for us and work well enough that we don't have the turn over other fleet owners have.

 

Driving yourself you are pretty much clearing the same net profit as someone who has a fleet of 4-6 trucks. The amount of headache, stress and risk is so much more though.

 

That’s pretty much exactly what I’ve done only 1/4 of the way there truck count wise and don’t yet have a shop.

I will say that you would need more staff at that level but I love the model you presented there. I’d keep payroll in-house and personally have oversight or do it myself just to keep that pulse on the finances and employees do not take kindly to mistakes.

Great information, totally agree. It doesn’t matter how busy or successful your front end operations are, if your back end is in disarray it’s a matter of time till your out of business. Being organized and 100% legit from A to Z is crucial to helping be successful and sleeping at night.

Yes and no IMO. It’s all relevant to what one does and how they do it. Some owner ops barely make enough to pay themselves so with a fleet they probably wouldn’t make much more and would go broke because stuff happens quicker and bigger with more trucks.

Equipment costs when your growing definitely difficult because you have no trade so every truck is a first time purchase so to speak and if you’ve grown slowly enough it gets where not only are you still adding trucks but you gotta start replacing trucks and adding trailers. So, in a sense that keeps your income in check but it’s all towards building towards really doing well and with hard work and a little luck making some very big money that no way possible a single owner could probably even fathom.

It’s just whatever floats your boat. If you want to get out of the truck and be s business man and build out infrastructure then do that. If your more into driving do that. For me personally I love being able to stay home with my son if I want to while my guys take care of things while still have potential to bank hard. It’s a tough row to hoe though for sure. I’ve wrote fairly extensively on here about some of my growing pains and the pressure of this stuff. Waking in middle of night in a panic, chest pain, etc. Takes a lot of time to be able to learn to handle it.

Btw Dune I’m not talking at you, just building off your thoughts for the thread starter.

 

In my experience, I thought, at the beginning, I was going to have more freedom if I invest in buying more trucks and hire more drivers and supervise it from home , I was wrong !!!
Stressed, headaches, babysitting, my company rate was going down the toilet
I was at home but I wasn’t.
Don’t get me wrong , it is possible and you can do it , but for me , money is not my priority.
Know your priorities .

 

Talk about chest pain haha. My buddy has a fleet of 8 trucks, last year his drivers were: stuck on the railroad crossing, went into ditch for no reason (probably was on the phone), backed into a car, made damage to a city property while making an uturn, one driver damaged another company's driver at their own yard while getting out and maybe something else that I am forgetting.
Total gross $2 mil, total operating expenses $1.8 mil and that's without truck payments, truck were paid off a year before, however this year so far, he already had 3 engine rebuilds.
I am sure if he had better quality drivers, those things would not happen, but if you are a no name dude starting a fleet with some used trucks, that's the kind of talent you gonna attract.
It was easier to start in 2010-2014, because there were more drivers available, but during last couple of years everyone was hiring and its hard to impossible to find good drivers.
Maybe with the things go now a lot of people will start migrating from job to job and you can catch some good ones

 

It's 24/7/365...always has been and always will be.
You can hire the best people possible...and you should...but you're the one that puts in the long hours and then lies awake at night worrying.