THE QUESTIONS YOU REALLY SHOULD BE ASKING
The following questions are not the “run of the mill” or typical questions you will see on other websites. They are designed to help you think about and look at all your options if you are considering operating your own trucking company. We feel these are the significant and “core” questions you should be asking yourself, whether you are an established Company Driver or just fresh out of Truck Driving School with a brand new CDL or someone who has a CDL and is looking at a career change.
1) LET’S START WITH THE MOST IMPORTANT QUESTIONS TO ASK YOURSELF: I am considering becoming an independent Truck Driver, operating as a Sole Proprietor or setting up my own Corporation. What is my motivation, goal, and what do I hope to accomplish? Am I doing this for the Freedom? Am I doing this for the Profit? Am I doing this for a better quality of life?
Some of the answers we’ve heard from our clients: I’m tired of being a company driver and watching the majority of the money go to the company I am working for. They nickel & dime me for everything, and I’m away from home and it’s just not worth it for the little “take home pay” I put in my pocket. I am looking for the freedom of being my own boss and answering only to myself. I’m looking to put more profit in my pocket. I want to spend more time with my family and be able to set my own schedule. These are very common answers we hear, yet most start-up drivers and even the “seasoned” company drivers don’t know where or how to start.
Team up with Total Truck Support Services, Inc. and let us help you get off to a great start.
2) WHAT IS THE COST & TIME INVOLVED TO BECOME MY OWN BOSS, WITH MY OWN FMCSA AUTHORITY AND PUT MY TRUCK ON THE ROAD?
Once you determine which type of “entity” you will operate as (Sole Proprietor, Corporation or LLC), we can give you a more precise timeline. The “average” timeline is about 25 to 30 days. Many factors play into this, the most important being: “are you insurable”? If you have a clean driving record (MVR Report) and are able to obtain affordable insurance, then we can do the rest for you in a streamlined, efficient manner. We do all the filings online, make sure your Operating Authority is “perfected” and guide you along the way regarding the items you need to take care of (like “Pre-placement” testing) and the items we will be responsible for taking care of. We do collect all fees up front as we must pay the various fees required in advance to make sure you are delivered your “MC Permit” issued by FMCSA. You CANNOT operate as a “Haul-for-Hire” Owner/Operator until you have a “hard copy” of this permit in your truck.
Once your FMCSA Authority is granted, Total Truck Support Services, Inc. will then proceed to all the “next steps” to get your truck registered at your local DMV or Motor Carrier Division, make sure you are in compliance at “State level”, get the necessary State permits and present you with a “Binder” of all the necessary documents to pass check-point inspections.
To answer your questions regarding FEES: There are many fees required and at different times. It is best to call or come in to discuss your “entire game plan” and what you are trying to accomplish so we can give you a comprehensive breakdown of what you are looking at regarding “Total Cost to Becoming Your Own Boss”.
3) WHAT ARE THE INSURANCE PITFALLS AND CONSIDERATIONS:
Insurance can be very expensive if you don’t have a “seasoned” CDL. This means if you don’t have at least 2 years driving experience and an excellent driving record, you could pay a sizable premium for your insurance for the first few years. The insurance underwriters want to see an experienced and safe driver in order to obtain cost effective insurance. Also the Insurance “Underwriters” look at the fact you are a “new venture” as you have a “new FMCSA Authority”. We can assist you by referring you to Insurance Agents we have worked with for years who will give you the best possible insurance available.
4) WHAT IS THE “NEW ENTRANT SAFETY AUDIT PROGRAM”?
So first we’ll give you all the “legal jargon”, it goes like this: On May 13, 2002, the Federal Motor Carrier Safety Administration (FMCSA) published its New Entrant Safety Assurance Process Interim Final Rule. The new regulations established minimum requirements for new entrant motor carriers- any carrier applying for a new U.S. DOT number on or after January 1, 2003- to ensure they are knowledgeable about the applicable FMCSAs & Hazardous Materials Regulations (HMRs).
And now we’ll “cut to the chase” about what really happens: When a new Authority is obtained, the Owner/Operator or Company (if a Fleet) is placed into the New Entrant Safety Program for the first 18 months of operation. At any time during this period, the Owner/Operator or Company will be scheduled for an audit. This audit consists of 16 major areas that are the essential elements of basic Safety Management. As well as a review of Log books to ensure accuracy, Driver’s files to ensure all information is up to date (an Owner/Operator has the same requirements as he is considered his own employee and must treat himself accordingly). Total Truck Support Services, Inc. can help prepare all required documents, driver files, vehicle maintenance files, etc. and assist during the Safety Audit as well as help the Owner/Operator or Company correct any defaults so they can be released from the New Entrant Safety Program with a Satisfactory score.
The objective of the audit is to educate the carrier on compliance with the FMCSAs & HMRs and determine areas where the carrier might be deficient in compliance. The FMCSA has identified 16 specific regulations necessary to operate in interstate commerce. Failure to comply with any of the 16 regulations is an automatic failure of the safety audit. However, this first “audit” is not really a “Pass or Fail” audit even though that is how it is presented. Even if you “fail”, you are given the chance to correct the violations. We at Total Truck Support Services, Inc. will advise the Owner/Operator (or Fleets if you have more than one driver) what to do in the first few months of operation to stay in compliance & be able to pass your audit. We take the worry out of passing this initial audit by getting you set up correctly from the very beginning.
5) WHY DO I HAVE TO TREAT MYSELF AS AN EMPLOYEE WHEN I AM THE OWNER/OPERATOR?
This has to do with fulfilling the requirements by FMCSA to ensure Safety Compliance. We can explain in detail and assist in setting you up correctly and covering all the basics of being a “business owner” with you as the employee. Sounds complicated, however we make it easy for you!
6) WHY IS IT CRITICAL TO BELONG TO A DRUG AND ALCOHOL CONSORTIUM?
This is a requirement of the FMCSA and you must belong to a Drug and Alcohol Consortium from the day we obtain your Authority for you. It is one of the 16 “rules” in the “New Entrant Audit Process”. If you do not join a “Drug & Alcohol Consortium” and fail to correct this violation, your Authority will be automatically revoked and you will then need to wait 30 days to re-apply for a new Authority and the entire process (including all fees) begins again. The moral of this story: Let Total Truck Support Services, Inc. get you set up right away with the Drug and Alcohol Consortium we have worked with for years to ensure complete compliance with this rule.
7) WHAT IS THE DIFFERENCE IN OPERATING AS A “SOLE PROPRIETOR” vs A “CORPORATION” or “LLC”?
This is where you really need to talk to us about the “Pros and Cons” of each entity “type”. Bottom line is how your taxes are affected. It also depends on your “personal life situation”. We take the time to ask you many questions about your goals, your personal income situation (married, single, children, etc.) before we can advise you of the best entity to be in. In a nutshell: A Sole Proprietor pays “Self-Employment” taxes, A Corporation or LLC does not, however, there are other “payroll” considerations and “IRS Elections” as to how you will file that can greatly affect the taxes you will pay vs the money you will keep in your pocket. We cannot stress enough how important it is to take the time to talk to the experts at Total Truck Support Services, Inc. to get the right answers BEFORE you jump into “being your own boss”.
8) IF I’M THE CORPORATE OFFICER OF MY OWN CORPORATION AND I’M THE DRIVER OF THE TRUCK, WHY DO I HAVE TO PUT MYSELF ON PAYROLL?
The IRS requires “Officer Compensation” to be reported on your 1120 (C-Corp) or 1120S (S-Corp) return. And LLC’s are not recognized at Federal level, only State level, so an LLC is a bit more complicated. But no matter the “entity type”, it has to do with paying your fair share of Social Security and Medicare Taxes. Total Truck Support Services, Inc. can set you up with the optimal payroll scenario for your company. We strive to help you “find a balance” so you don’t pay too much or too little and still achieve your financial goals. This is a very important issue to discuss with us prior to deciding “which type of entity do I want to operate”. Call us BEFORE you make a costly mistake and avoid the “do-overs” many new ventures encounter.
THESE ARE JUST AN EXAMPLE OF THE TOUGH QUESTIONS YOU DON’T HEAR ABOUT WHEN YOU GET STARTED OR NOBODY WANTS TO TELL YOU ABOUT.