Minimum amount of cash in the bank to start O/O

The most costly issue would be a complete engine overhaul. This is the amount I always keep on "stand-by" at all times. And if you don't know what that costs, you aren't ready for business.

Second, fuel... How often do you get paid? Make sure you can handle that 'lapse!'

 

As BARE MINIMUM,you will need 2 (If not 3) Months of your expected Cashflow in the Bank as Working Capital..

Lack of Working Capital has been the cause of nearly EVERY Small business Failure, that I know of..
(Said with A 30yrs of Experience tone in my Voice..)

Good Luck with the venture..

 

My goal for a emergency fund (Engine most especially) os 40,000 dollars. Funding for all other truck problems stands at 15,000 flat. So if you had to have a 4 air bag suspension set flown in asap to replaced a completely destroyed system on that tractor, 15K would be a nice bit of cash to throw at the problem, it will also qualify for part of that engine fund which is never touched)

Then 6 months fuel. If you ran 10 to 15,000 miles a month on that tractor that's 7500 dollars in fuel at 3.00 gallon which is a average between fuel now and the highest fuel price a few years ago. to have 6 months fuel on hand at 7500 is a big challenge. It's another 45000 A complete set of retail tires is included in the fuel money. I think it's 9000 dollars for a full set of 18 tires. Should be bought once a year just before winter.

Everything else will have to come out of the revenue. I would like to be 6 months ahead on truck payments per month whatever figure that comes to. But with 100K or more that I require as a form of savings against specific problems for half a year if not a whole year that's alot of money to be sitting in a bank waiting for a destroyed engine or something else.

A ideal amount of money would be cash to buy a new 18 wheeler at any time free and clear of payments. that's between 150K to 200K. So Im up to 300,000 in the bank. That'\s for one truck.And a little bit unrealistic. 10 trucks becomes 3 million and so on.

I'll never be a O/O or a Company officer again in my life time. I had a taste of it when particpating in a program designed to build a o/o out of company drivers with your own tractor that is bought by you. I purchased a mid 90's midroof 120 with a pretty good cat and a rockwell 9 that worked well. But due to discrimination by the school boss I was able to walk away from that 41,000 dollar bill and give the truck back to him. What I should have done is go to court. It was my entire livelhood on the line that week. But I was too young and not have the warrior mindset enough to take him to court.

At the end of the day thinking back on that year, that business would have failed anyway and the truck repossesed at some point prior to the end of the 90's There are at that time too much secretive non disclosures going on with the various companies that employed owner operators and no way to really examine any one of them in particular to what rates they paid per mile and where they hauled to. Those were state secrets to me. And that was a shame because I had plans from one truck to 10 and eventually 100 and so on as time went by. Maybe I still have plans. But watching the impact of elogs, emissions and various other problems coming on now and breaking existing companies large and small Im pretty happy I did not get to go too far over the rabbit hole and get into trouble I cannot get out of .

The first money saved would have gone into the engine fund. If anything at all in life that breaks a O/O and destroys that person and his company is the ability to either replace the engine or rebuild same for between 20 to 40,000 dollars at a moment's notice, cash when the old engine finally destroys itself. If there is anything that is truth in trucking, Engines destroy themselves. have the money ready for that before it does.

 

I went through roughly $33k covering bills, expenses and repairs after 2 back to back instances. One involved body damage from someone backing into me. Then 2 weeks after coming out from 6 weeks of down time I blew a hose climbing a hill, didnt catch it in time, and cracked the head. New head and inframe. More down time,.. more expenses with no income This almost bankrupt me.

Learned from this. What ever you think is a good nest egg. Double it.

What can start out with a $9000 estimated repair bill can quickly escalate adding thousands more on top of that.

Just had a clutch done. My go to guy said he would do it for $2100. $4700 later my truck is back at home. Always be prepared. Expect the unexpected. This is not a cheap business.

Hurst

 

$25k for emergency funds, plus four months of expense money, which is to pay the bills when the truck is idle. This does not mean income replacement. It means to pay for things like insurance and any reoccurring bills related to the truck.

And when you get rolling again, make those funds priority to bring back up to a minimal level.

I would also strive to keep adding into these funds because no matter what, you are going to pay taxes and can use the additional money for other things at the end of the fiscal.

 

How many really started with 30k in the bank after start up cost?
Sounds like talk from the TA counter of wisdom.

Going to work for a good carrier with good rates, should be paid weekly, using their fuel card.
Buy a new truck with all the extended warrantys. 10k in business account should be enough.
Put the truck in service this year and get back all the taxes you have paid in this year then you will have that magic 30k in the bank.

Before all the experts chime in about a new truck, they are running team, yes the new truck will be in the shop, but so will a used one so downtime and a bill.
Payments on a late model used truck aren't much less than a new one unless you finance it way too long.

Now for the "get your own numbers crowd" first off what they are hauling pays better than anything you haul and you can't haul bombs with one truck and your own numbers.

 

I started with Roughly $35k saved. Paid $21k for my truck. 2 weeks later I realized $10k in the bank wasnt going to cut it. Borrowed $20k from my mother inlaw. So technically,.. yeah,.. I had $30k after buying the truck.

I was and still am leased to the same company. Started with company trailer and fuel card. I own the trailer now and use my own fuel card. Have my own tag and IFTA now as well.

Still not ready to cut the cord and go out on my own. I know I could make more,.. but comfortable with how things are. I really loath paperwork.

Hurst

 

Based on comments,

100k ought to work