How to Start a Trucking Company: $1000 a Week Passive Cash Flow?
Ever thought about buying a semi truck and renting it out?
Yeah, me neither, until I came across Ericka.
Apparently there’s big money to be made in trucking, but like any other side hustle, there’s some strategy, risk, and nuance to the business.
Ericka Williams owns 12 of these giant 18-wheelers, which can generate thousands of dollars a month in profit.
Ericka has gone from delivering pizzas as a side hustle to owning a painting company, to now managing an investment portfolio that includes both real estate and semi-trucks.
If you’re interested in real estate, there’s a parallel to consider with this business model. Trucks are assets you can acquire with leverage (meaning other people’s money), and essentially rent it out for weekly or monthly cash flow.
Tune in to hear:
- how Ericka came across the idea of buying semi-trucks
- what to look for when buying your first truck
- the math, marketing, and mistakes to avoid in this side hustle
Why Trucking? How’d You Get Started
Ericka kept bumping into people who already had trucks, that’s where she first got the idea. The more she heard people mention they were making money with trucks, the more interested she became.
“It just kept pulling me in, the intrigue of it,” Ericka told me
Ericka was following an Instagram page called HoodEstates. She’d see people on there talking about owning trucks, so she reached out and started asking questions.
She already had her YouTube channel, so Ericka invited the people behind the HoodEstates Instagram account to appear on her show.
Just three weeks after airing that episode, Ericka was at a conference and someone came up to her and said they’d gone out and taken a $40,000 loan, bought a truck, found a driver, and had it on the road.
A great example of someone taking action, and also demonstrates the impact this side hustle can have on people.
How Can Someone Find a Used Semi-Truck?
Unless you’re experienced in buying semi-trucks, it’s hard to know where to start. Buying used trucks isn’t something most people come across in their lives.
To help you out, Ericka shared some tips on how she finds her trucks.
Some of the basic criteria Ericka uses when looking for trucks includes:
- Looking at an model year range of 2013-2016 – when they’re newer than 2016 Ericka said trucks tend to be more complicated and more expensive to fix.
- The fewer miles on the clock, the better. Ericka said she aims for under 500k miles, and added: “trucks are great for that first 1.2 million miles.”
- Request the semi-truck equivalent of a CarFax print out from dealerships. This is a document giving you a comprehensive history of the truck to look through.
She also advised taking a mechanic with you to give you a professional opinion on the state of the truck.
Ericka said used truck sales have gone through the roof this year which has driven prices up. A year ago, she said you’d have plenty of options around $32,000. This year, prices are up nearer the $40,000 range.
Her advice is to keep looking for that deal in the $32,000-$35,000 range. If you keep looking, you’ll find something in that range.
Places to Look
You can try dealerships, but that’s not where you’re going to find the best price. Ericka looks on Craigslist, Facebook marketplaces, and other places online where people sell stuff.
Ericka said it’s especially important that you take a trained mechanic with you when you’re viewing used trucks being sold privately. A mechanic might charge you $150 or so, but it’s worth it when you’re planning on parting with $32,000+.
Best Truck Brands
Ericka said people have their own opinions on which brands of trucks are the best, but she likes Peterbilts and Kenworths.
Volvos are great too, but they’re expensive and require specialists to work on them.
Then you have what Ericka called “the Honda Civics of semi-trucks,” Freightliners. These are the easiest to work on, so she recommends looking for Freightliners meeting her criteria where possible.
What Do You Do Once You’ve Bought a Truck?
You can’t just drive a semi-truck off the forecourt and take it home like you can a new car.
Ericka said to check the dealership can keep it for you until you’re ready before signing for it. You also need to find out where you can park a truck in your city.
The main issue right now is that a lot of truck parking lots are full. You can expect to pay anywhere from $150 a month upwards to park a truck in one.
Hopefully, the mechanic you brought with you to look at the truck has the license to drive it and move it for you. Otherwise, you’re going to need to find someone.
Connecting With a Third-Party Logistics Company
Once you have a truck (or even before!) you’re looking to connect with a Third-Party Logistics company (3PL).
These companies are looking for trucks to help with their logistics, and they’ll pay you for supplying one.
Ericka said you can usually find these companies advertising on sites like Craigslist and Indeed. You can also just call companies in your state if you’ve seen trucks driving around and are familiar with the large freight companies.
The larger the company, the more likely they are to have spare drivers. It’s going to make your life a lot easier if you find a company that’ll supply the driver, so it’s worth calling around.
How Much Can You Expect to Make?
“The typical pay is going to be anywhere from $750-$1,500,” Ericka told me when I asked what a typical weekly contact looks like.
Using very approximate figures, Ericka said the revenue and costs of running a truck for a week break down as:
- $6,000-7,000 income
- $1200 for driver pay
- $1300 for fuel
- $200 trailer rental
- insurance, tolls, and other miscellaneous costs.
Accounting for all those expenses, your net income, on average, is typically around $1,000 a week.
This means the numbers shake out at an income of $48-50k per year, assuming 2-4 weeks of vacation or downtime for maintenance and repairs.
For an asset that costs around $32,000, that’s an amazing cash-on-cash return.
There is a “but,” though.
Ericka explained that semi-trucks require maintenance and repairs, which can quickly add up. Also, the national average for a truck driver to switch jobs is 90 days which can cause headaches and downtime.
To combat the driver issue, Ericka sets a “safety bonus.” She pays her drivers a $1000 bonus every 9,000-12,000 miles. This gives her peace of mind that they have an incentive to drive safely, and stick around to collect that bonus.
Can You Hire Your Own Driver?
You don’t have to find a driver through a 3PL company.
Another option is to get your own trucking authority and run things a little more hands-on. You can find your own driver and potentially increase your bottom line a little more.
Once you have a driver, the 3PL company will book them and still handle that side of the business if you work with one.
Or, you can find your own loads for your driver to transport. You’re going to need to make sure you have the right insurance, and you’ll need to provide them with a fuel card. Then it’s just a matter of finding transporting jobs.
There are plenty of ways you can find transporting gigs. Two of the apps Ericka recommended are Convoy and Uber Freight. Both of which are essentially online marketplaces where people post jobs for stuff they need a semi-truck for.
You can even schedule out jobs for the whole week that make sense geographically. So your drivers are going to pick up their next load near to where they’ve just dropped one off.
Ericka said you can expect to make anywhere from $2,000-$2,500 per week after expenses managing your own driver and keeping their schedule tight.
If you call it $2,500 per week and take 48 weeks for the year allowing for some time off the road, Ericka said you can realistically expect to bring home around $120,000 in a year with just one truck.
Additional Tips for Owner-Operators
Ericka shared some tips for running a business as an owner-operator:
Stay on top of repairs and maintenance – Neglecting maintenance can lead to more costly repairs down the line.
Driver management – With such a high turnover rate, it can prove costly if you’re always having to find new drivers. Either continually market for drivers, or pay bonuses as Ericka does.
Keep good reserves – Ericka had to fork out for 4 new engines last year at a cost of around $20k each. Tire blowouts can also set you back up to $1,000 a tire.
Take out bobtail insurance – This insurance covers your driver if they’re involved in an accident while not carrying a load. It costs around $300-$500 a year.
Use electronic time tracking – For safety reasons, drivers can only drive a certain amount of hours per day, week etc and they have to take a certain amount of breaks. Ericka uses an app called KeepTruckin, this enables her drivers to log in and record everything remotely.
Any Concerns Driverless Trucks Are Around the Corner?
“No,” in a word, Ericka told me.
She explained that it’s been an uphill battle for years now to get enough drivers to handle the demand across the country, and she doesn’t see the robots taking over any time soon.
There is also the issue of how a lot of the country’s roads and infrastructure is laid out. Ericka said it’s difficult enough for humans to navigate and maneuver some of the terrains and landscapes, she doesn’t see AI being able to do it.
Anything Else That Could Help Aspiring Truck Investors?
If you want to get into the semi-truck/logistics business but want a more passive involvement, Ericka said you could look into trailer rentals.
For those not up on truck lingo, trailers are the big detachable “box” part being pulled by the truck.
Often, people will not have enough to buy both the truck and trailer and will rent one. You can pick up trailers for around $15,000, and then use a site like RentalYard.com to rent it out for $800 per month.
You need to make sure you have the correct insurance, but any damage caused by the person renting it is their responsibility to sort out.
What’s Next for you?
Ericka is working on a project called Texas Ground Zero. This is a truck center she’s helping develop north of Austin that’ll have a hotel, food trucks, and plenty of space for truckers to park their trucks overnight.
Ericka’s #1 Tip for Side Hustle Nation
“Look around. Everything that works to service people, there’s an opportunity for you to get in there and help or get in there and make a profit.”
Links and Resources from this Episode
- Skillshare – Get a free trial of Skillshare Premium Membership, with unlimited access to 25,000+ on-demand classes!
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