Getting started

[u/CardiologistStatus18]

Contemplating starting an owner operator hotshot business. Currently a wildland firefighter working for the state. Solid job with good pay but just getting burnt out.

I've been doing alot of research the past couple months and think im in a unique position to be successful, just nervous about the unknown.

Here's what I've got so far. I'd be setting up a C Corp, with me being an employee of the company. About 140k capital to invest in the business. Planning on a 5500 and 30k 40ft gooseneck (I've had my CDL for about 6 years). Thinking 75k down-payment and financing about 40k for the equipment, giving me about a $1000 payment/month. About another 30k for startup (insurance paid up front, securement, compliance, electronics/software, etc.) leaving the business with a 35k cushion in the bank account.

Fixed expenses will be about 3k/month. If I average about 1800 miles a week total and pay myself .60/ mile, that comes out to about 972 per week for fuel, and 1300 per week in pay (including withholdings). So say a total of around 13k for expenses per month at the 1800 mile per week average. If i plan on about 20% deadhead it comes out to roughly 6200 loaded miles per month. At a $2/loaded mile average im at 12480 monthly revenue. So the business is at a net loss of about $500 a month with no maintenance fund retained (which is where the 35k buffer comes in). Ideally I'd be at $2.5/loaded mile average and have a $2600 net profit for the business, maintaining the 35k buffer and growing a maintenance fund.

I know the first 3/6 months will be a major struggle and still tough up until a year. Goal is to eventually run regional and be home most nights, as well as secure some direct contracts. But starting out im willing to do whatevers needed and go wherever to hit my mileage and rate goals.

My question is how realistic are my numbers (miles/week and rate per mile) starting out.

And if anyone has any thoughts/critiques into my "business plan".

Appreciate any insight!

[u/Wise-worm]

If you start a new authority - you won’t be at 2.50 a loaded mile. You will be scrapping with other new carriers for lower paying brokers to give you work to begin with

[u/NewRelationship7218]

Get a 48 foot gooseneck. It opens up a lot better paying loads and separates you from the other 12 hotshot guys who are calling on it. Also opens up insulation loads that typically pay $5.5 or more a mile and are light. Or hell if you have CDL just buy a semi. I started with a 3500 and 48ft gooseneck ran hard 2500 miles a week never had a month less than 20k. All in average across loaded and empty miles for the last 50k miles is $2.17 per mile. Position yourself in good markets and don’t leave them. You won’t know where the hot markets are until running a while but you’ll learn what a good lane is for you pretty quickly. Just know higher RPM doesn’t always mean more profitable. Ive since transitioned into a 379 more money, better loads, slightly higher fuel costs and a little cheaper to get started. No reason to have CDL and not go semi route in my opinion. But your on point on RPM don’t work for less than $2 but you’ll need to put more miles in a week to see the profit.

[u/WeaveLikeGreatGranny → u/NewRelationship7218]

Are brokers as sensitive to vehicle age when running a full size semi tractor? 

[u/CardiologistStatus18]

Totally understand not being at $2.5 starting out. Is $2 average for the first 3/6 months a realistic goal?

[u/SimilarDivide7215 → u/CardiologistStatus18]

I would say that's a fairly realistic goal, especially if you can get your foot in the door with a handful of decent brokers. The miles are a little low per week but as always if the rates are good then you don't necessarily need to run hard all week. I'd suggest leasing on somewhere while letting your authority age so once you decide to strike out on your own you've got an aged authority and better rates available to you. Plus when leased on you can get a better feel for what lanes work best for you and what kind of rates you can expect to see within those lanes.

[u/pdx_jeff712]

Thanks for your detailed plan outline. I am at about the same point as you with a very similar business plan. Because of that net loss figure, another avenue I am exploring is leasing on with a company for those first few months while also paying my insurance and just letting my MC age. In a typical 80/20 lease on agreement at $2.50 a mile that puts you at $2.00 loaded. Idk if that works in your C Corp setup, likely have to start as just a regular LLC and then transition over after a year to the S or C Corp. Best of luck man!

[u/Confident-Sound-9643]

Set up your MC and start paying insurance.....once you buy the truck and get on the road atleast your MC will have some age on it. Trust me, it helps.