Earnings to operating expenses

Have a different approach.

The first thing I calculate is what are the minimum monthly expenses for my personal well being.
House, insurance, utilities all that stuff the comes with it. This is the bare bones survival number. Nothing fancy.

This is then set aside for now.

Next is the cost of equipment.
Fixed expenses are the one you pay no matter what. If you never turned the key for 30 days. You might be surprised at where your money goes. Cell phone, accountant (and you should get one) capitalizations funds, depreciation offset, the list is long.

Variables are the expenses when the truck moves. The list is actually short. Fuel,Tolls, tire and maintenance funds. These are going to move around based on time and miles. You can do a best guess average, then go 5,10,15 and 20 percent above and below that average to see how the numbers change.

Now we get to add a bunch of stuff together.

Take your monthly home expenses
The monthly fixed expenses
Your best guess variable expenses
Add them all together.

That is your minimum monthly revenue requirement for break even.

Now decide the number of days you are willing to work in a month. Typical 5 day work week will be about 23 days per month.

Take your break even number and divide by 23.
That is your working daily revenue number. The amount of revenue to the truck you need to break even.

While the per mile number is good to know from an operation point. It is more of a monitored thing to spot problems or trends.

 

Nothing wrong with TRYING to get 3000 miles a week if your averaging $2.50 a mile or better.

Now if you GOT to do 3000 miles a week because your only getting $1.10 mile. That’s stupid.

 

Thank you so much Gdog66223,

Do you add your (and any additional workers) salary in the estimated cost per mile calculations?