Some numbers for new O/O

We have a customer that runs a few sleepers and they use Penske when they have a down unit.
You are responsible for blown tires and any damage.

 

God help you if its specialized. When my truck was down for 2 weeks. For a sleeper with a wetkit and pinable 5th wheel i was looking at $3300 a week

 

With all due respect . put the botle away and go to sleep . then when you are really awake , take your time to research and think clearly .

 

Alright, figure I'd do the time honored tradition of throwing my business model in here and seeing what people think.

10,000 miles/month
8 miles per gallon (gonna be a t680 with an apu, i've seen em do it consistently)
$3.50/gal for diesel
52.5 cents per mile as a baseline pay to myself (taxes thing, intend to do llc elect as s corp and pay myself $63k/year)
$1670/month insurance
$138 workers comp or whatever

$800/month tractor payment
$3400/month escrow (I intend to build a $40,000 "OVERHAUL THE ENGINE" account in the first year)

$2400 accounting
$2000 irp
$1560 random stuff like ELD

Fuel per mile cost: $0.44
Drivers wage $0.525
Insurance $0.18
Truck payment $0.08
Escrow $0.34
Random $0.08
OAL: $1.65
OAL less profit in the form of pay: $1.12

Goal rate per mile: $2.60
I will greedily go higher as possible
Day rate profit target for tractor: $1,000 (yes this goal is above $2.60/mile)
these rate goals are AFTER any cut a company i'm leased on to takes

Intend to start leased on, and then create authority while running for that company. I've got 3-4 main choices, the big deal being that they all have non broker freight and I don't have to directly pay for a trailer.

these goals projected over a year are $312,000 gross and $177,600 profit including my tax purposes w2 pay

Thoughts? I intend to overestimate cost in a couple places here. have I UNDERESTIMATED cost anywhere here?
Hopefully I can get diesel down below $3.50 with fuel cards pretty consistently, and I'll be taking the measures I am aware of to save fuel mileage.

 

My experience with a used truck over 500K miles with a APU on it was 25K maintenance a year over a 3 year time frame. What are you pulling that makes you Mae $2.60 a mile on all miles being leased to someone? Seems to be a dream gig if you can do that starting out. Also where is your replacement money coming from for a different truck over time?

 

You have underestimated in multiple places just from what i can see. Maintaince is one add about $15K a year minimum best case. If your #### unlucky like i was with my frist rig, try $45-60K a year easy.

Taxes $12,000ish or more. Mine on 254k last year were around $14,000 and that was after running 117K miles for my federal. $800 unless your putting down a TON of money means either a really cheap or a used truck in general and most first time places your not going to get a loan much under 3 years on a used truck for a start up. So you should budget around 1800 a month for a truck payment.

Also the 2.6 and 312k are insanely optimistic unless your doing specialized or have a contract in hand. Hell im specialized highly experinced and work over 340 days a year and even i only averged about 2.2 a mile. A more realistic number if you plan to run hard is 100k miles at around $2. And id say 80 at 1.80 just incase things go screwy. Or you have downtime for repairs and such.

I also budget $7500 a year for tows, granted i dont always use it, but a single tow can run $5000 easy if you got 80k on god help you if you slide off in wyoming. Try 20k+

Then there going to be issues your first year. Just flat out plan on getting whacked for around $20K for random ######## your first year. Your going to find there are things your truck needs or you want. Your apu WILL break. It just will, how bad, no idea. But its going to break at least once. Figure $2500 for that.

And thats just off the top of my head.

 

There are some fairly cheap PACCAR powered T680s because they're PACCAR powered. The thing that I've seen that kills MX13s most is idling, which I can circumvent both by having an APU and buying a truck that has had an APU its entire life. I've heard mid 40s average miles per hour across entire engine life is pretty good and indicates it has very little idle time. I've been looking at kenworth's website at the certified pre owned stuff. Even if the warranty isn't worth the paper it's written on, they're not terrible deals.

Multi-drop furniture loads, some reefer, winter mail, occasional amazon, auto parts, whatever I can find that makes money. I heard about it from somebody I know who went local so that he'd have more time with his family, but was an owner op for 35 years. I have a few specific customers I intend to go after as well. My goal is to use the load board as little as possible, and the point of leasing on for me is to get inside a network of existing, contracted, less terribly paying freight. I considered landstar and mercer and etc for a time but their % seems too high (especially landstar) and there's a ton of benefits local companies can get me like having their own shop and getting me a drastically lower rate than I would get at a dealer or normal shop.

Regardless, I'm trying to build the model here so that I'll survive $2/mile or less, because that could easily, easily happen.

Long term, since I have a security clearance (I'm a reservist), I figure I can get into some government loads easier than most and that should also get me above the average rates. But first I just want to actually start operating and get used to everything before I go and learn a whole new set of things.

 

Dont. Do not. Dont even consider a used paccar. Do not pass go, do not collect stupid. I used that EXACT same train of thought and my paccar almost broke me. Go read my new owner op thread, no seriously New owner torn on a new truck. go now go read that. Then go read the threads of MANY people here who got a used paccar motor as a first truck. Just dont. Also if its from MHC kenworth dont walk, run. Run and throw molotoves and anything else you can behind you at them and dont stop until you colapse. MHC is well known for burning first timers with #### trucks.

Honestly get a volvo, a freightliner, an international or something with a cummins. They are VASTLY more affordable, easier to fix and far more forgiving on first timers and the MPG wont be much worse if at all. likely better in the detroit or volvo engines case.

Buying a paccar is the worst #### decesion you can make. The only engine worse is the #### maxxforce and not by a hell of a lot.

 

Ok, I changed maintenance to $80,000/year, $6,700/month.

What do you mean? They won't give loans LONGER than three years? Regardless, recalculating a $50,000 truck with an $8,000 down payment, it's like $1,350/month. The places I'm looking at leasing on to provide trailers in exchange for the % they take (20-25%)

Aight, now I'm at $2.04/mile to survive and pay myself $63,000/year. And if I don't spend the full $80k, I still have it. Let's see what happens if I pay myself less on paper. I get it down to $1.91 at 40 cents per mile to pay myself.

Guess there's no money in this whole truckin thing huh.

Let's change it to $1800/month like you say for tractor payment and back to 52.5 cpm pay

$2.23/mile

That is from 44 cents per mile fuel
52.5 cents per mile pay
18 cents per mile insurance
67 cents per mile maintenance
8 cents per mile random
15 cents per mile taxes and stuff

 

I didnt say they WONT just that MANY of the finance places wont give you better then 3 years on a used rig. My first one i had a 725 credit score and a good down payment. 3 years at 11% was the best i could get. And i say 1800 because i didnt know your budget and down payment so i used my first truck to give you an example. So.....not sure why that makes you angry.

As for the maintaince, i am unsure why you are getting snippy at me. I told you 15k @Siinman recomended 25k and i also gave you a worst case scenario like i had. You may get off scott free you may not. Its pure chance and luck with used equipment.

As for no money. there is plenty. You just gotta understand the first year about 9 out of 10 new owner ops fail for a reason. You NEED to plan that everything is going to blow up in your face. If it doesnt, great. More money for you. If it does and you plan for it. Your going to be here for the second year.

The second year things will be much more stable, you will have a system down, a reserve built up, customers steady and most of the bugs worked out. If your still here by your 3rd your golden. Thats the thing a lot of people fail to realize. The first year is ALWAYS the hardest.