New O/D Guide On How To Start Up On Your Own?

UK PROFESSIONAL DRIVERS FORUMS OWNER AND FLEET OPERATORS FORUM (INTERACTIVE)
1

Been looking over the last 3-4 pages before I gave up for a little info on how or what to do to start up your own OD Haulage business.

I don’t have an interest in doing it but, as said, I had looked over the last 3-4 pages and anytime someone has asked how to start up the’re told -

Economy is crap come back in future, not best time for starting, your age may hold you back etc etc but no-one has yet exactly said what is needed to start up your O/D business?

Its something I may consider for the future, certainly not now due to age/experience/Credit crunch, although I bet many started when they were young?
Anyways if we get a good response, not the usual downers replying, you could poss make it a sticky for future reference? I’m sure many look at the site for info and many make threads up only to be told about the worlds financial crisis which I am sure they already know about??

So to start with, and hopefully get detailed info, not just replies stating you need a truck, insurance and work…

Lets say we already have guaranteed work whats next?

  1. Accountant? Will the accountant do the invoicing for the work carried out? If not, can a family member do this? Also what about stuff you buy for lorry? Where does all paperwork or receipts go?

  2. O Licence? Is this really just as easy as applying to VOSA/TC and your local paper and waiting 9 weeks? What can refuse you an O’ Licence? If refused, what are your next options?

  3. CPC - If you dont want to sit this to become a qualified TM whats other options? Employ someone else? Whats the cost of this to someone new? Will anyone do this for free? Maybe a friend in the trade

  4. Need a reliable truck? - Where’s the best to go and see one? Mag? Online? Traders? If/when you find one you like whether it be an old ERF to a big shiny bling Scania, where can you get the finance to pay for it? Independent finance company? Personal loan? Maintenance - What needs maintained and when? What sort of price is it for maintenance?

  5. Insurance? Anywhere online to do them DIY pricing guides like you can do for cars? If not is it a phone call to all brokers for prices? Are HGV’s like lorries and depend on size/spec of lorry will effect your premium? IE:- 405 ERF be cheaper to insure than a 580 v8 Scania?

  6. Trailer hire or purchase? What can one expect to pay for trailer hire or purchase? How often do they need to be maintained? What needs doing at regular intervals?

  7. Registering your company name? Is it best to go LTD company? Also VAT numbers? When is getting VAT registered needed?

  8. Fuel Cards - Are these like credit cards? Best to apply for a few to see who gives you best deal? Do they also go by your credit score/rating?

I’ve prob missed loads out but it be handy if people in the know can add to this or edit it. It will only help others out in the future. Yes, we know theres no work out there.
Theres a credit crunch etc so please no downer replies telling us this. Many people ask questions but never get the replies there looking for.
This thread could be a hit or a miss but as said I many may be interested in the future, but not now, but I bet others want to know things just now.

Any input is grateful.

2

Move to Poland, get an EU grant to buy a brand new top of the range motor then come over here & work 24hrs a day & totally carve the job up, don’t worry about insurance/maintainance & all that other annoying stuff like O licences or tachos, you only need to make the 1st payment to get your insurance certificate anyway, new motors will not fall apart for a year or two & for tachos, just add a few z’s to your name, for ‘ghost drivers’ just move the z’s around a bit, you’ll make a fortune :cry:

3

good answer very good !

4

quote=“scottishcruiser”]Been looking over the last 3-4 pages before I gave up for a little info on how or what to do to start up your own OD Haulage business.

I don’t have an interest in doing it but, as said, I had looked over the last 3-4 pages and anytime someone has asked how to start up the’re told -

Economy is crap come back in future, not best time for starting, your age may hold you back etc etc but no-one has yet exactly said what is needed to start up your O/D business?

Its something I may consider for the future, certainly not now due to age/experience/Credit crunch, although I bet many started when they were young?
Anyways if we get a good response, not the usual downers replying, you could poss make it a sticky for future reference? I’m sure many look at the site for info and many make threads up only to be told about the worlds financial crisis which I am sure they already know about??

So to start with, and hopefully get detailed info, not just replies stating you need a truck, insurance and work…

Lets say we already have guaranteed work whats next?

  1. Accountant? Will the accountant do the invoicing for the work carried out? If not, can a family member do this? Also what about stuff you buy for lorry? Where does all paperwork or receipts go?

As a new start, you would not want an accountant to be doing the invoicing as they will charge for that service. I would either do it myself or use a family member.

  1. O Licence? Is this really just as easy as applying to VOSA/TC and your local paper and waiting 9 weeks? What can refuse you an O’ Licence? If refused, what are your next options?

Which type of licence do you want?

  • Restricted
  • Standard National
  • Standard International

To apply for a new licence you need to complete a Form GV79. This form is available from
the VOSA Contact Centre Tel 0300 123 9000, or it may be downloaded at
www.transportoffice.gov.uk.

You must advertise your application in a local newspaper circulating in each place where you are applying to have your operating centres.

The advert will be also published in A & D. This is sent to various organisations including Local Authorities, Police and Trade Associations who have a statutory right to object to the grant of your application.

  • you and, if you have any, your partners or directors, are fit to hold a licence.

  • you will have proper maintenance facilities of your own, or arrangements with a garage and enough money to keep your vehicles fit and serviceable.

  • You will need a suitable off road operating centre which complies to local planning and noise regulations.

The Traffic Commissioner must be satisfied that you have sufficient financial resources to maintain
your vehicles properly and, in the case of applicants for a standard licence, to run your business.
You have to provide one or more of the following with this application:

  • original bank or building society statements covering the last three months, including evidence of
    any overdraft facility and/or;

  • audited accounts (acceptable as the sole financial evidence only from limited companies or PLCs)
    provided they show an annual turnover of at least £5.6m. They must additionally show that the
    company is trading profitably (on the profit and loss sheet) and positive ratios of more than 1.0
    (when dividing total assets by total liabilities) and 0.5 (when dividing current assets by current
    liabilities)

  • an Invoice Finance Agreement if accompanied by a signed agreement from the finance firm in
    which they agree to retain the amount of money needed to meet the definition of financial standing. If this evidence is to be accepted, you must obtain from the TAO a Finance Factoring proforma, which must then be completed by the finance firm and returned to the TAO

The above evidence must be in the name of the applicant for the operator’s licence.

The Traffic Commissioner will measure the evidence against the current financial levels required for
a licence.

Currently:
Restricted £3100
Standard National. £6200
International. £6200

  1. CPC - If you dont want to sit this to become a qualified TM whats other options? Employ someone else? Whats the cost of this to someone new? Will anyone do this for free? Maybe a friend in the trade

  • holding grandfather rights (pre 1975) certified by a Traffic Commissioner

  • holding the Certificate of Professional Competence (CPC)

  • holding a qualification recognised by the Department for Transport as equivalent to the CPC such as membership by examination of the Institute of Logistics or Mechanics institute.

  • employing a transport manager ™ who holds one of these qualifications.

vosa.gov.uk/vosacorp/reposit … icense.pdf

  1. Need a reliable truck? - Where’s the best to go and see one? Mag? Online? Traders?

As the answer on fuel cards, you may be inundated with salesmen calling and sales adverts dropping through letterbox.

If/when you find one you like whether it be an old ERF to a big shiny bling Scania, where can you get the finance to pay for it? Independent finance company? Personal loan?

The finance can only depend on your personal circumstances but a bank account is necessary to begin trading.
Maintenance - What needs maintained and when? What sort of price is it for maintenance?

  • maintenance contract, signed and dated by you and the contractor; and

  • safety inspection schedule.

You will need to inspect any vehicles on the licence, with any trailers included at least every 6 weeks with proper records kept.

  1. Insurance? Anywhere online to do them DIY pricing guides like you can do for cars? If not is it a phone call to all brokers for prices? Are HGV’s like CARS and depend on size/spec of lorry will effect your premium? IE:- 405 ERF be cheaper to insure than a 580 v8 Scania?

No. Makes and bling wont count but the value of the vehicle will. Dont forget Public Liability. CMR or GIT

  1. Trailer hire or purchase? What can one expect to pay for trailer hire or purchase? How often do they need to be maintained? What needs doing at regular intervals?

Many companies will supply a trailer at cost or for a consideration. Dont forget the trailer is on your o licence whether you own it or not. It also is on your licence for maintenance, whether you service it or not.

  1. Registering your company name? Is it best to go LTD company? Also VAT numbers? When is getting VAT registered needed?

Depends on Circumstance.

  1. Fuel Cards - Are these like credit cards? Best to apply for a few to see who gives you best deal? Do they also go by your credit score/rating?

Most card companies who see a & D will invite you to apply, but the rates will be a minefield to work out and I doubt you will be offered any special deals, you may be even asked for a payment up front. Dont forget tunnel tags and tyre service

I’ve prob missed loads out but it be handy if people in the know can add to this or edit it. It will only help others out in the future. Yes, we know theres no work out there.
Theres a credit crunch etc so please no downer replies telling us this. Many people ask questions but never get the replies there looking for.
This thread could be a hit or a miss but as said I many may be interested in the future, but not now, but I bet others want to know things just now.

Any input is grateful.
[/quote]

All the answers are out there and to be fair if you do not know the basics, you have a lot to learn before you will make it as an O/D

5

scottishcruiser:
Been looking over the last 3-4 pages before I gave up

WADR, if you give up so quickly on something as easy as doing a bit of online research then you won’t last 2 minutes as an o/d. :unamused:

6

I dont want to be an O/D. I wanted a guide to see wha is involved in setting up as many have asked over the last few pages but everyone gives downward answers, no-one is positive or bothers answering the questions asked.

7

come back when the economy gets better :smiley:

8

scottishcruiser:
I dont want to be an O/D. I wanted a guide to see wha is involved in setting up as many have asked over the last few pages but everyone gives downward answers, no-one is positive or bothers answering the questions asked.

Good, because to be honest, you don’t sound like O/D material.

At least some basic ground information is required to work in this field. You seem totally devoid of the slightest knowledge.

No rudeness intended, just saying what i see.

HOWEVER, your idea of a guide to set up is a good one, BUT i think with an hour or 2’s searching around in here, you will find the topic has been discussed many times. I know i’ve added to “what’s required” type threads in the past.

9

Thats your opinion, which will be noted, but if I wanted to become one I have an incline I could do a good job due to my background, but why go through the hassle of doing so when its easier to drive and earn under someone else? The sole purpose of this thread was to get a full detailed of what is needed to become an O/D. If you look through the last 3 or 4 pages worth of threads most replies are crap, non helpful and a waste, just as this thread has went apart from the 1 relevant reply.

10
  1. balls you need these to to take the plunge in to becoming an o/d
11

Hi scottishcruiser, I think your whole idea for this topic is a good one. :smiley:

We’ve got a step-by-step guide to gaining an LGV licence and how to prepare for the LGV driving test, so whyever shouldn’t somebody (you) tackle the wider subject of what it takes gain an ‘O’ licence?

I’ll chuck a minor 2p worth on the end of the answer to your Q3 in Wheel Nut’s excellent piece…

If the application is for a Standard International ‘O’ licence, the nominated TM would need a National and an International CPC, or one of the other acceptable qualifications that Wheel Nut mentioned.
(Please don’t take that as a correction Malc. :wink: )

I’ve only mentioned that, because at present, there are two separate CPCs, but there is official talk of combining the two CPCs into just one qualification at some point in the future. (Not many people know this. :wink: )
Due to the fact that I teach for several training providers, I do get to see some of the consultation documents that come from the exam boards, in this case it’s OCR.

I hope I’ve helped, and I’ll keep a lookout for material that might come in handy. :smiley:

12

To be honest if you cannot get off your arse to check the basics, dont come and whinge on here that the replies you get are crap.

This question has been asked almost every week since I joined Trucknet by wannabee steering wheel attendants.

It took me a few minutes to dig out the relevant answers for you. but a little bit of courtesy wouldn’t hurt…

13

Wheel Nut…great answer, very detailed. I think folks are interested in this stuff, even if they never actually take the plunge! Your knowledge is still appreciated.

Scottishcruiser…what exactly is stopping you becoming an O/D now? What age are you…you hint that you may be too young? What else holds you back? Balls? Cash? Lack of knowledge? The will?

lee mat…correct…BIG balls needed. Could not agree more!

lgamston…nah…disagree…no time like the present if you have the balls…there are always opportunities, at times like this they simply lessen, they do not evaporate although it may feel like it.

Next?

14

ScannyFanny id say the lack of personal experience is my only hold up. Im 25 with 1 years experience, theoritically (spl) im not worthy of some of the big haulage firms who want 2 or 3 yrs experience, although when I fisrt passed my test (24 and 0 yrs experience) I was told by many come back when 25 and 1 yrs experience, now to still be fobbed off. TBH Ive money saved up for a rainy day, the father in law has 2 trucks so sure he could give me some good advice.

As LeeMatt says, big balls to take the plunge is prob the main factor. If the economy and job is that bad why waste the savings I or any others have to take a gamble on something we may lose out on? Im not really a gambler.

But if its worth doing in the long run Id like to do it.

15

wheel nut i thankyou for putting an answer like that on here posting topics on here has been a huge help to myself if it wasnt for people like yourself and others on here who have gone out of there way to help me out i would of walked away from the idea of becoming an owner driver i wish each and all of you a happy new year and the best of luck for 2009

16

HI,

Looking through your replies, some have very useful comments.

I have been a director of a small haulage company. It can be very scary to do. In fact I have been considering doing it again. We ceased trading after a major customer went into administration owing a large sum of money. I didn’t send us into administration but, it happened in January 2006, not a very good time of year when you need work anyway. I made the decision to ‘shut up shop’ because I didn’t want our company to be facing calling in the administrators. If our cashflow dried up. It’s one one the most difficult decisions I’ve ever made. A lot of companies take on work that just isn’t profitable, unprofitable work can send them down the slippery slope even quicker than parking their trucks up for a couple of weeks.

A few tips:-

Know what your costs are and plan a cashflow. Re do your cashflow monthly. Therefore you can spot any hiccups or downfalls before your bank manager does. Sometimes when the bank manager spots it, it can be too late.

Try and envisage any future costs :- Tyres, servicing, inspections, maintenance and fuel price rises.

Know your rates and journeys. It’s no good getting up to Scotland with a load if you know your can’t get a load to come back with. It’s a long way to run empty. Unless your lucky and your customer pays both ways.

Build up a good contact list.

Make sure payment terms are met and customers stick to them. If you have budgeted for 30 days payment, but your customer is only paying after 90 days, it’s a long while to sit without money.

Don’t get too big too quickly. Alot of the most succesful companies can simply run out of money by becoming too big too quick, after their cashflow has dried up.

Be careful, there are a lot of companies alot bigger than we are who simply don’t care about the one man band. The administrators certainly don’t.

I hope this helps.

17

ScannyFanny id say the lack of personal experience is my only hold up. Im 25 with 1 years experience, theoritically (spl) im not worthy of some of the big haulage firms who want 2 or 3 yrs experience, although when I fisrt passed my test (24 and 0 yrs experience) I was told by many come back when 25 and 1 yrs experience, now to still be fobbed off. TBH Ive money saved up for a rainy day, the father in law has 2 trucks so sure he could give me some good advice.

scottishcruiser…age is an interesting thing in business…some young folks feel too young to be ‘ready’…some older folks feel they are ‘past it’ maybe and should have done it younger. I tend to think it depends very much on the actual person in question. I started my first business with a partner at 17, my second at 22, my third at 23 and a few after that! I’ve slowed down a bit since then (I’m now now 42) and some of those businesses have came and went frankly; they were all different and only common theme was me. One or two were successful and others faded due to not being good enough ideas or me not applying myself enough, as something more attractive had come along. I still run two of them successfully and will probably start another in the near future and yet another in a few years when I feel the time is right.

The secret of when and if to start is quite simple, without meaning at all to sound a smartarse…as i am not in the slightest…you just need to work on some of these thoughts…

  1. Timing - you feel the time in the market is right, you’ve done a lot of market research (and I mean a helluva lot, turned over every stone you can think of and looked under it…twice!). You also feel 100% that the time is right for you, which is very important, wait any longer and you may go off the boil and bin it! This can also be a good thing though which may tell you the idea would not have flown, for you anyway.

  2. Differentiation - you feel you can do something different/innovative or cheaper or smarter or with more value-add or preferably with a combination of all/some of these attributes.

  3. Consideration - you have weighed up the pros and cons and spoke to lots of knowledgeable contacts and filtered the information received…most feedback will be garbage…restrict thos you take into your confidence about your plan to a minimum and do not talk about in the pub or public places (especially to other drivers in your case as they will spout on way too much in general about what you should/should not do…athough not always!) and do not ask people what they think of you starting this or that as this will invite negative response which can be demoralising in the extrem but a good reality checker in the sensible form. Instead, pick up all their ideas about best practice and clever ways of working and very importantly…how NOT to do things if they can describe an unfortunate bad experience of their own…this can assist you to avoid doing similar/same.

  4. Cash - try to have at least some available…you will always always need more rather than less. I know too well it’s hard but get access to the cash whether it’s in a shoe box or an overdraft or sell your car, whatever, makes things much easier. Don’t bet the farm though so to speak as yo don’t want to lose yer house for ex ample on a busines idea which flunks. Keep a balance if you can.

  5. Start sensible…don’t wade in up to your ■■■ in loans and debt if you can try the new venture ‘on the cheap’…meaning for example, if you can start with a cheaper truck then do so, spot hire, contact lease, whatever without tying up cash. If it does not work you can sack it more easily.

  6. Mentor(s)…try to hook up with some people who know what they are talking about with respect to your targetted business type of who are good with money and perhaps are already in or have retired from susccessful business. Can you get in tow with a bigger, more experienced guy who has already trod your intended path? If yes, then seek him or her out and use them or maybe even go into partnership with them, assuming they have enough skills and ability as well as cash to offer. Dads can be good but sometimes too optimistic and wishing for children to do well, stops them being objective; equally they can be too negative and stunt good growth of a clever idea…you need to weigh it up yersel!

Be very aware of the recession we’re in but don’t ■■■■ in all the doom and gloom stuff too much or you will never start anything ever, like 99% of the folks who post on here…they’re company men until the day they die whether they admit that or not (no offence meant). Good ideas combined with the right effort and application will fly at any time…what will hinder at the moment is finance for vehicles for example, given credit has tightened big time. Use common sense, filter feeback and pub talk and hone your ideas…do your sums again and again and your homework then if you can secure the work take the plunge.

Many businesses fail every day and there are good reasons for them doing so, just always always remember it is ALWAYS your fault as the business owner…it’snot the recession, it’s not the price of fuel, it’s not the creditor that went bust on you; As the gaffer you could have controlled or took action on all of these things whether you think you could or not! Trust me, it’s all in your control, the rest you hear and read is all excuses that folks trot out when things go pear-shaped to cover their arse.

Last one…ask yourself…why did Woolies, the 100 year old High Street stalwart fail recently and fold while owing £400 million and putting 32,000 poor people out of a job? I don’t know the whole answer but I do know that debt of that calibre was not built up quickly so someone or more likely some senior people did not take the right action (or maybe any action) at the right time to save the firm from the mess it ended up in. The 'credit crunch is something for the Woolworths gaffers to hide behind but it is a smoke screen, trust me.

Good luck…in whatever you do or do not do…as a self-employed person your destiny is very much in your hands most of the time. Just remember to weigh up all ‘advice’ received and consider the person who gave you it, their experience, their ability, their background and what you think of them…that should tell you all you need to qualify or sack their opinion. Make it easire taher than harder to ‘get out’ iof your idea ain’t working…tying yourself into loadsa debt is a surefire way to business suicide when things take a downturn…keep any financing as low as possible.

18

this is a great topic, with some very useful tips, well done too all, who have posted such useful info.

its something, i’ve just started too contemplate myself, but its a fair way off, of becoming a reality. i have the idea for the business, and have every intention of starting small, taking it 1 step at a time, and seeing if its a viable idea, so topics such as this are of a great help.
i’ve been in this game for 16 years now, working for small and large companies, and have covered all of western europe, and parts of scandinavia.
i don’t seem too get anymore thought of, for the 110% effort i put into, for any company i’ve worked for, hence while i’m considering my idea seriously, sometimes you need the drive, knowledge balls, and prob a bit of luck too go for it.
i have sooo much research too do 1st, before i’d consider taking the plunge, but topics like this really help.

19

I think this is a really interesting thread. :sunglasses:

Thank you to all who have posted wise words.

Yes, the current financial climate is hard, but we all need to plan for the future, whether it’s working for someone else or being captain of your own ship.

For anyone wanting to set up as an owner driver, there are many aspects to consider and these all take TIME to work through - perhaps well over a year, if someone wants to sit their CPC, organise finances etc., so the outlook and economy could have changed drastically by the time someone is ready to start up in business.

Let’s hope the economy changes for the better!

It’s great to have a guide to some of the many factors that need to be considered. It will inspire some people to go ahead and become owner-drivers or perhaps something bigger, you never know!

On the other hand, many people will look at the diverse and complex requirements for setting up a company and realise that it’s not for them.

Either way, it’s good to see the bigger picture and I think it would be good to see this as a guide in its own section, like the ones for training, etc.

I will watch for updates with interest! :slight_smile:

20

LoadsOfHorses:
… I think it would be good to see this as a guide in its own section, like the ones for training, etc.

I’ve been made aware of this thread and I will get around to making a post from it for the FAQ forum.

It will be up to the O/D forum MOD as to whether it beomes anything in that forum.

If no-one minds, I’ll be using quotes from this thread which will be attributed to the members concerned.