110. How a 17-Year-Old Built a $1.9 Million/Year Trucking Business!

0:00Andrew Gomez was still a teenager when he bought his first two trucks to start AJG transport. Seven years later, they've become the go-to delivery provider for Fortune 500 companies, bringing in a seven-figure monthly revenue from dozens of trucks in their fleet. This is Alex Freeman, and you're listening to the Upflip Podcast, where we uncover how great businesses are built. Keep listening to hear how Andrew landed top-tier jobs that drove this impressive revenue growth, how he leads a team of people who are older than himself, and how you can follow in his footsteps. Andrew, welcome to the show.

0:33Thanks so much for joining us. Alex, great to be here. Great to continue where we left off. Hopefully, we get to continue in regards to you guys watching the YouTube video and hopefully I get to show you some color into what we're doing. Yeah, absolutely. And for those listeners who haven't had a chance yet to head over to youtube.com slash upflip, watch the YouTube video that we were able to do with you. Can you give us a bit of your background about yourself and how you started the business? So basically, I started out roughly around 17, 18 years old, 2016. I saw that there was a lot of potential in regards to some Amazon contracts.

1:07And so I've been around trucking my entire life. And so overall, whenever I saw this opportunity, I went after it with all I possibly could. And so far it's gotten me where we are today, but there is a lot of strife and a lot of detail and a lot of grit to go over in order to get to where we are. So 17, 18, obviously a very young age to start a business of any kind. What was it about your kind of upbringing that made you want to start your own business? How did you kind of end up there? Overall, my family has always been entrepreneurial. I mean, it started with my dad. He was always out there before I was awake at school.

1:41And then also when it came to him coming back in, he was always there really late and he would have maybe four or five hours and have to be one of the first out there in order to get his loads as he had his own truck. And so in regards to trucking, that's always been in our blood. But at the same time after that, wanting to grow comes from just our humble beginnings. What's one pain that you enjoy having? What's the good problem that you encounter in your business? A good problem that I encounter is having not enough trucks for the amount of work that I have. So at this point today, I need about 145 % of the capacity that I currently have.

2:14And that's a blessing and also is something that makes me want to over leverage, right? But at the same time, we still have our safety parameters. And that's really a good thing to have, but only based off of our reputation and based off of our service. I think that a lot of guys want to work with us right now, which is amazing. It's a blessing, but at the same time, we take it with a grain of salt and we always say, hey, let's look at it from a long-term perspective. I'm focused on five years from now. Are we going to be enjoying the same environment? Absolutely not. But we want to make sure that we're taking care of you in any environment.

2:46And that's one thing I think a lot of guys appreciate. I want to kind of dive into the beginnings there a little bit from a different angle now as well, talking about those first two trucks. You started off with two trucks. What did that cost? How did you kind of finance those trucks and what other startup expenses should somebody be planning for if they want to start a transportation business? Oh man, I mean, that's a level of question. So initially I would say 2016, back then I was able to look back at some of my numbers and I was thinking, you know, whenever I bought my first two trucks, I was only trying to get one truck at the time because I saw that my brother had financed through a Freightliner of Converse, Texas.

3:20And I would always talk to Frank. He was a good financer. He was the guy that always worked with him. And I started talking to him. I started picking his brain on how I can build on this. We would talk every now and then. They would see that we were building up some additional units on my brother's side. So then I said, hey, what do I need to do in order to get zero down and get two trucks? And that was my goal. And so overall, as I continued to talk to them, we eventually figured out they had two used units that they wanted to get rid of. And we ended up getting something to where they basically made a killing off me.

3:50I looked at it. I recently paid it off just last year. How about that? 72 months for 7 % interest. They made a killing in interest. But at the same time, it was what I had to do because I didn't have any prior experience. I didn't have any driving experience back then. That was of course legal anyways. And basically that after I went through that system, my costs ended up being roughly like two grand for the truck payment. And then you had to go through Progressive because they were the only company for insurance that would take you as a new company. the barrier to entry was very high. And that was roughly around$1 ,500 a month.

4:22And back then I looked at the fuel and it's roughly around eight grand a month. I was running about 24, 2 ,500 miles a week per unit. And then you had your other operational costs, which were six or 7 % of any of your revenue, or it could be more if you had any breakdowns. So the bottom line, I looked at everything, the total cost that you're looking at was like$13 ,000 to$20 ,000 a month if you had repairs, but your total revenue that I had was, you know, I was running with Amazon and they were running at$3,$4 a mile at times, you know? And so basically you're making on two units, roughly around anywhere between 35 to 57 ,000.

4:57The contract varied based off of the amount of volume you had that week and everything else that I had, all the spread that I had, I put it in an investment account to get the next truck. And that was it. I want to ask you about those Amazon contracts in a minute here, but how is that different today? What would it look like for somebody wanting to get started today from your experience? You had the COVID boom of everything being expensive. Now we're leveling off. You're seeing a lot of the used truck market is finally coming down a little bit. You're seeing guys who bought a brand new Freightliner, God bless their soul, in COVID time for$230 ,000 and now it's worth$175 ,000.

5:33And so since we're starting to see that, if you're coming in brand new, I mean, most of the time guys will try and go, they'll say, hey, go to Facebook Marketplace. you know, see some guys will sell them to you via an owner finance and that buyer beware. The one thing I always recommend with guys who want to come in and do this without any experience is go get some experience, you know, via operations. But if you're really tempted to do this, then go and get a, you know, a repairman, someone who does mobile road service or a local repair shop to inspect the unit before you get that unit. Because I guarantee you, it's a lot of these guys, they use trucks that they have, they keep if they're running correctly.

6:07Trucking companies only sell their problems. That's the one thing I learned after a while of doing this business. And right now there are some tricks of the trade such as buying from bigger fleets. But at the same time, you know, if you're trying to buy it from somebody, you know, another owner, operator, et cetera, odds are he's probably had the truck in the shop, et cetera. So you just have to be wary of that. The cost itself, you're looking at an average of$3,$3.10 a gallon, especially if you don't have fuel cuts based off of fuel discounts. You're looking at insurance being still an unregulated business, which will average you roughly around the$10,$12 ,000 a year per truck.

6:41You're not going to see$3 a mile ever again. That same contract that I had is getting ran for$500. So it's a different market. There's different niches, of course, but at the same time, there's a lot of headwinds. But I will say, like I said in the video and in regards to the YouTube video, find the opportunity first, figure out, see how it works, get the contacts and then get the truck. Because I guarantee you, if you get the truck first, you're kind of scrambling a little bit. It's basically one of the only reasons why I was successful in general was because I saw the potential at somewhere and then I executed on it.

7:14Listeners, if you want more of the nuts and bolts advice on these steps to start a trucking business, check out the Uflip blog post that we've linked in the description of this episode, where you'll learn about getting a CDL, industry regulations, and how to land your first jobs, along with a bunch of other helpful info. Are you looking to launch an e-commerce store? Want to learn how to do that from those who've been there and done it? On the e-commerce master plan podcast, you'll hear e-commerce and DTC founders sharing their journey from startup to multi-million dollar success story. Every episode is packed with tactics, strategies, and tips to help you follow in their footsteps.

7:47Find it all on the e-commerce master plan podcast. What's been the biggest failure or your lowest point as a business owner so far? I would think my lowest point was whenever I remember it to this day, I was still living with my parents and overall, I just had way too much month at the end of the money. I knew for a fact I had a truck that was down that basically it needed an entire in-frame, which basically meant at that time, I didn't even know what that meant. Well, all I knew was that that was five figures of money that I needed to repair and replace. And then I had another unit that basically was always giving me problems in regards to the DPF unit.

8:23And so overall, I would say the DPF system is a very common issue that trucking companies would have to deal with, especially with freight liners, et cetera. But that's a whole other conversation. But back then it was just, it was too much. And so at that point, there wasn't many times where I had to get away for a second, but I just took a walk and I said, there's got to be an answer. You know, we huddled up. I talked to my brother about it as well and tried to figure stuff out with him as well. And bottom line is, you know, I scrounged up money from whatever possible savings I possibly could scrounge it from.

8:51I sold off a few personal belongings and I made it happen that month. And that was something that I'll take to this, to get to this point. You know, I'll always think about that point in my life where I was at, I think it was around 15 units. And I just didn't know what to do next because I will always say there's always 12 payments you have to worry about. Andrew, let's talk about that Amazon contract that kind of started things out for you. How did you land that contract and what made them such a good fit for kind of your first jobs? So initially, whenever you're trying to find some additional business, usually what'll happen is you're picking up freight from the load board via a broker in some sort.

9:27So basically what would happen was what I figured out was the potential of our Amazon contracts was that there was always a lane in San Antonio where nobody wanted to take and it was at 1 and 3 a.m. every single morning. And sometimes by the time you get to the fourth quarter of the year, there was probably four or five of them that you could take at 1 or 2 or 3 a.m. But no trucking company is awake. And nobody had access to those load boards because back then they were still kind of relatively a new feature to the industry. And so for the most part, what we saw was I was the only guy who was awake at that point.

9:56And basically I would send out all my units accordingly. I knew that they would have the freight either to San Antonio to Houston or San Antonio to Dallas and back. And I was just running power only, which stood for just the trailer. We would use an Amazon trailer for their freight and we would just drop and hook it, come straight back, be done in roughly around nine to 11 hours. And so that consistently happened until we met with Amazon Logistics. When did you realize that the company was ready to grow beyond just those Amazon jobs? And I guess kind of more generally, what are some of those signs that a trucking company is ready for more growth, bigger jobs, adding a truck?

10:31What are kind of those signs that somebody should be looking at to know that it's time, we can grow now? Absolutely. I think that whenever you're figuring out consistency, trucking is a cyclical market. And that's one thing that has always been a problem for trucking companies. Whenever I've seen a lot of people that I used to know that used to be trucking company owners fail because they would leverage on something that was not going to last. And so whenever you're finding an area where you could grow your business, you have to keep in mind the consistency portion of that business. Is it going to last through the next two years?

11:06Is it a six-month contract? Is it a small project with the promise of other projects? Those are the type of things you need to think about before growing. And so your risk management perspective is going to be, can this sustain me for the next 12 months? And then as you continue on that process, you can't get comfortable. And so in my opinion, your growth phase comes from answering those questions is, can this sustain me for 12 months? Can I leverage even more in this contract as a customer? And lastly, is there anything set in place to protect me from any type of unforeseen circumstances such as COVID, such as anything?

11:44Andrew, let's talk some numbers here a little bit. You mentioned some earlier numbers. What is the revenue looking like in a typical month today? and like how do profit margins work on that in a transport company? Yeah, I mean, so at this point, you're looking at for all of the units in my fleets, roughly around 1.9 million a month. And that averages to roughly around 20 to 23 million a year. And overall, whenever you're looking at that, you're talking about all of the supply chains that I'm in control of. And that varies, but I will say trucking is a capital intensive environment. You know, you're paying drivers, you're paying trucks, you do have all these payments.

12:19And you're, of course, building equity every single month, including trailers. We have about 150 of them so far. And so your net margin on a lot of that should be roughly around 6.2 to 7%. And that's where we like to stay best we can in order to continue to facet for growth. I focused on trying to build at least an 18 to 20 % year over year growth. And that's just basically from a safety risk management standpoint, as long as I have the business to support that growth. What are you doing to control costs, especially fuel being one of those major expenses that can be highly variable? What are you doing to kind of control costs as much as possible?

12:59Man, when I tell you that I am on the phone with my loves travel stop rep, trying to hammer him and tell him that I will go to this other guy to get a lower discount every single month. I am doing that. I mean, everything possible because the worst thing you're going to get is a no, but at the same time, it is really a struggle for fleets these days. The way that I see it, the way I make it as a metaphor is that my ship has a lot of leaks and my team, my administration and my executives alongside me focus on plugging a lot of the leaks. So we're looking at all of the costs that we have and what we can mitigate or what we can put together.

13:34And that requires a lot of auditing and also a lot of thinking outside the box. Yeah, I think that's a really, really good point because I think that what gets lost a lot of the times is that so much of business is those relationships, is trust, especially like in terms of this relationship between the transport company and the company that has things that need to be transported. They have to trust that the thing will get from A to B in a way that's safe, not damaged, won't do anything, any damage to their reputation on time, all of those things that you can't ultimately know until it's done. But to land the business, you have to have the trust in the relationship with, I know who I'm going to call if something goes wrong.

14:11Absolutely. And I think developing that reputation starts with showing that you're different. You're outside of the usual span of what a trucking company was, whatever your service industry is. And then your reputation is based off of action only. I mean, whenever they think about Gomez Here in San Antonio, people are thinking dependability. They're thinking on-time performance. People will love working with me because I make sure that I do people's jobs for them and because that's my standard. That's my standard for my team now. But that only comes after an insane amount of road building is how I call it.

14:43And the road building is the hardest part. Getting other employees to buy in and drive those roads is relatively easier. And how did you prepare yourself for that first meeting? Because I mean, so many people are just incredibly intimidated by what you described as having done, get on a plane, go in and say, hey, no, I'm here because I want your business. And let's go over to Applebee's and have a meal and talk this out. Like, how did you prepare to go do that? One thing that I learned from Jim Rohn is if you want to be something or want to gain something, you have to make it a study. And so, you know, at first I was talking to myself in the shower and that general answer would get me as far as I could.

15:17But the bottom line is I started going to business networking meetings. I mean, I'm talking the local business networking people who have maybe 10 or 12 members, but they're trying to practice their personas for business networking. Yes, you're going to get millions and millions of business owners selling you insurance, you know, selling you credit card processors. Yes, all that stuff. And I understand I took all their cards, you know, politely. And at the same time, I started to express my business persona and started to communicate from a professional standpoint at 18, 19. So this is going to bring us to the section of our show that we call our Fan Blitz questions.

15:50These come from our YouTube community. Listeners, you can head over to youtube.com slash upflip, post questions to future podcast guests. Andrew, we've got four questions here that we're going to try and get through in about a minute. Are you ready? Let's do it. All right. Biggest purchase you've ever made? My fourplex that I just bought as my first home. What's the biggest purchase you regret? I'm going to regret buying the Cybertruck whenever it comes out, but I already... If you had to come up with a slogan for the year 2024, what would it be? Embrace the discomfort. That's what it's going to be.

16:25Ooh, great one. Great one. If you could go back in time and tell your younger self, don't do this thing, what would it be? I would say, again, stay off your phone. I was on my phone way too much whenever I was younger. I love it. That's the family's questions. I think you might've set a record of actually staying in the time limit there for any of our guests. Well done. Well done. Let's talk about some of those corporate clients. Talk me through the process of landing those first big name Fortune 500 type companies. How did you identify it was going to be the right company to connect with? And then how did you go about securing the contract as a relatively new delivery business?

17:03I majored in marketing when I was in college. I knew for a fact that there was something there because I loved figuring out what we could do in regards to getting our company out there, building our brand. And so my first thing that I always tell people who are in business, especially if you're business to business, but business to consumer is required. If you haven't, I don't, you're a dinosaur. It's getting your Google business listing out there. And that's something that you don't need to go hire somebody for. It's literally just go log into Google business manager and get it. And then take the video of your little area that you have, your address, and then submit it.

17:32That's the first thing. Because getting your name out there is the first piece of the puzzle. Whenever I think about owners, executives, CEOs, what's the first thing that they're going to look at? They're going to look at whether or not you have a website, whether or not you have a footprint because they want to know you're legit. And for the most part, what I saw is I also made a rinky dink little website off of Squarespace. And one of the executives from a major automotive maker saw it and he gave me a call. And then we worked with them on a couple of spot loads. But then I was like, man, we could really capitalize on this.

18:02This could be something that could make us something in the future. And so the second piece to that question is when it comes to executives that could be decision makers, any logistics managers, you are going to have a very low success rate if you just call them or send them an email with an offer. And the bottom line is you are going to have a higher success rate if you think outside the box with these guys. I had never been on an airplane or I'd only been on an airplane once in my life. The second time was whenever I went out there to Nashville, Tennessee, and I went to these business executives.

18:30I had my first suit on, my gray suit that I got for buying a tuxedo for high school prom. I got an extra suit for free. And I went over there and I talked to these business executives and they thought I was applying for an internship. But I said, hey, no, I just did a couple of load for you guys. And I talked to one of your logistical managers down south and I want your business. I want to be here for the long term. I want to show you guys that I'm serious. And their jaws were dropped. We went out there to, you know, the local Applebee's and I've talked to them just like, you know, you would anybody else.

18:59You know, they found out they were really nice, Christian loving people, Christian values, and they gave us a shot. And from that point after, I've had a relationship for the past seven years. I also know that you do a lot of things in-house that other trucking companies are outsourcing, like the repair shop. What are some of the pros and cons of keeping that in-house as opposed to outsourcing? There's a lot more pros than cons. I would say the pros in general are you have your mechanics who can also buy into the campaign. They really care about what they're doing and their work. They also work on different fleets.

19:28They work on additional outside fleets. That way it makes additional revenue as well, but it allows you more control in regards to what's important and allows you to get the trucks that you want out. Having gone through that, what advice do you have for other business owners on getting through and past and recovering from those low points? Well, the one thing that I always say was a common thing that business owners will do is we have our anxiety that focuses on the future. And we think that the future ideals that we have in our head is going to end up happening. And so say, for example, if I felt like I wasn't going to make it, I felt like I was going to sell all my trucks.

20:02I was already, my brain already went to who I'm selling the trucks to, which bank is going to come at me first, etc. You know, when the insurance is going to cancel, all of these things start to attack you. And so my advice is really to focus on the action now. So that's why I took a walk. I got outside of where I was at, my little fortress of solitude and got a different perspective. I prayed, of course, and we figured it out after, you know, we got through all the worrying and the anxiety. I feel like a lot of that is common with business owners in high capital intensive environments. Because in trucking, a lot of these companies, you give them two weeks, they are definitely under because you just can't go a couple of weeks without having the truck roll.

20:40And so overall, I think that's the biggest thing is focusing on shortening your thoughts in regards to time for the future and focusing on the actions that you can provide now and continuing those actions until you figure out the answer. Hiring is something that is a challenge across a lot of industries right now. What advice do you have for building an excellent team and finding the right talent for the open roles at your company? So a lot of times business owners want to solve problems and then just have this automation thought, you know? And one thing that I thought of was I'm a road builder.

21:14So whenever it came to that road building, when I talk about previously, it's let me partner up with you so that we can do the job. I'm going to show you how I would do it for a consistent amount of time. And then you're going to take it over once I'm comfortable giving it to you. And I think that whenever I have that mindset, I'm able to hire somebody who particularly might not have the industry experience, but they have the drive. And that's what I call it. I mean, if they have the drive, the thought process of I'm pushing my ego aside, I want to be successful in this industry. I want to be successful in your team.

21:47That's invaluable. I think that's the number one thing that most business owners should look at. If you could pick the one thing that listeners take away from this interview, what would it be? Number one would definitely be embracing discomfort. That's my motto for the next year. But at the same time, it's something that has rang true from all the way back then to right now, because my problems have only increased in size and my ability to handle said problems has increased as well. So those problems that I have are of course easier to deal with because I have the experience of going through them.