Lets talk numbers, profits, and losses.

I'm a number guy too. I thought about trying lease but after running the numbers it wasn't for me at this time. Sounds like your on the right path so far. Knowledge is power especially when running a business. You can never have too much information.

 

When I was an O/O, the first 5 weeks of each quarter covered fixed expenses. The next 5, Fuel, Tax, my pay. The remaining 3 typically were the profit. Granted, anything outside of the regular budgeted Maint. Or home time would eat the profit super fast.

tracking every penny is essential, as well as being flexible.

 

Pay yourself last, pay the truck first. Gotta keep the truck running.

 

I use a simple formula....hub miles drive fuel, maintenance and labor. Make my hub the ball I watch and the rest will follow . Everything the truck does, needs is on the hub, don't matter what or how the carrier pays.

Being said, I take $100 plus $38 FSC .... $38 goes in savings , $30 goes in tax account $35 in my pocket and $35 in truck account. At the end of my year I pay taxes, left over truck obligations and what's left is profit. Nothing goes into new truck / upgrade account. There's not enough money. If I need truck money I borrow from tax account. I also use tax money and savings to buy and sell truck parts. Loan gets paid back and profit goes into savings. Also use Paypal CC for all truck purchases and get 1.5% back.

My hub cost is $1.06, last years parts and repairs ran me a grand a month avg. and there were minimal major repairs and 2 total weeks down. I had to enforce freight selection ( non forced dispatch ) last year as 2q revenue numbers were trending down but hub was rising ( poor dispatch ) 3q flat lined so I had stopped the bleeding. 4q was soft overall and I disposed of unit because of metal fatigue issues and upgraded to an 06. It's not in operation yet. Changing leases, adding pumps and compressors. More money in accessorial charges vs the freight. Took co. job while 06 is being readied. Job helps tax position too.

I also made some mistakes in 12 that I had to pay for in 13 like Chinese tires and a carrier loan to buy them (12% ) . They had to be replaced in 13 plus transmission had to come out twice due to poor rebuilder selection.

14 goal is to get new unit up and running and add 10% to last years numbers so......70k +/- for 2.2 qtrs......depends.

That's how I do it.......

 

Don't be surprise to run at a loss initially. Even if you do a L/P realize your fixed expenses will avg. $50k/year, minimum. Fuel can be as high as $60k these days. Based on that, you are looking at close to $110k in bills that have to be paid before you see a penny.

The key to making it work is running fewer miles for a higher rate. If you run 100,000 Miles/Yr, at 6.8mpg avg. you will burn 14,700 gal of fuel. At $4/gal that is $58k (all numbers rounded for easy math) at $1.50/mile avg. You are looking at $40k/yr PRE TAX.

Now if you can reduce the miles to say 85k @ $2.00/mi. You could save up to $30k a year pre tax. Now these numbers are a 25% higher per mile, and a 15% reduction in mileage.

Work smarter, not harder.

 

Glad to see you back in Liberty with the dog....good answer too. Exactly what I do......

 

Wish someone would explain this to my o/o buddy. He drives 80-90 mph everywhere and spends upwards of 80k a year on fuel. He always brags about his checks but he can't be making that much running the way he does. He runs check to check too. If he needs tires he charges them then runs the next couple of weeks to pay them off. If he needs a repair he charges it then runs like a mad man for the next month to pay for it. Seems like a terrible way to run a truck but I guess it works for him....

 

You can't...I work with guys that run for the Friday check....anything to make it bigger with no regard of how you got there......I run 5 at $200 and they run 10 at $100.

Sure they gross more per year but I make more when it's over and gross less. It's about mentality.

jmo

 

the slower you drive, the more you make....sad fact.