Yearly Profit After Expenses...

I hope you seriously arnt thinking about hauling for that cheap of a rate this is what the problem is with this business. My truck is paid for but i do owe on a fairly new trailer. I still wont haul for under $2.20 per mile right now and the last 2 weeks i havnt hauled anything under $2.46 per mile and im still barely making a profit, theres much more to this than meets the eye. Heck just this last month i spent an unexpected $4500.00 in repairs. And beleive me i keep excellent records and track of daily profit and do my own maintainance and most repairs. This business isnt as cut and dry as you may think. Im not trying to deter you just consider everything.

 

I am not considering even moving the truck for less than 1.75 and would prefer 2.25 and up but my point is if i keep my expenses low even a 1.30 load will be enough to make a small profit to get out of a bad rate area and into somewhere decent. The plan is to have my fiance booking the loads so that if I am headed to lets say dallas and estimate to be there in 36 hours I want a load leaving dallas making money ready to start loading in about 42-48 hours that gives time to unload, clean trailer, and get to next pickup without deadheading any more than i absolutely have to. I am fortunate in the fact that I only have to account for buisness expenses and food and what not as we are going to live in the truck for a bit before looking into buying a house and after buying the house I will probably just rent it out untill we are ready to settle down and have kids. This is the major key in keeping my expenses down and profits up.

 

I will say I appreciate your optimism. But understand that all anyone has in their final CPM is business expenses. What you are saying is that you can afford to take cheaper freight because you have low personal expenses. Maybe a tweaking on your thinking should be that you will be able to afford to sit rather than taking that cheap freight you now feel you can make a good living on.
Also, build your plan based on never being able to have any of those people you know be able to turn a wrench. Few of us are lucky enough to have that breakdown happen in our drive.

 

Personal expenses and profits for a business have nothing to do with each other.

 

I Understand what you are saying I guess I worded that wrong what I meant was my personal expenses will be low allowing my total expenses (buisness and personal) to be low allowing for more profit without needing really high rates that I likely will not get as a new O/O. As far as my thinking I also have calculated what it costs my hypothetical truck to just sit for a day and will not take any load that I cannot justify based on my numbers (CPM and sitting) but I will be willing to take a cheaper load to get to a better area as long as I am not losing money. I would rather make a penny a mile than dead head (please keep in mind my CPM to run the truck includes PM/taxes/fees all the way down to .05cents to replace 18 tires after 200,000 miles and a maintnence fund that cuts my personal profit, after PM and scheduled maintnence is done, in half no matter what that number may be for example 4000 month profit equals 2000 maintnence/new truck fund 1000-1500 savings account 500-1000 pocket). On a side note the 2 mechanics I mentioned are only going to be used to help me look over the truck before I buy it as I have worked with gasoline engines and pickup trucks but never diesel. I have not calculated anything in the maintnence category off of them being willing to do it cheap.

 

You cannot plan on replacing all the tires at the same time as that will never happen.

 

no but i can include average tire wear on my CPM and take any money not actually spent per mile and transfer into the maintnence fund at the end of the week. The maintnence fund is currently set to get around 18 CPM or 11% of net income. I have based my calculations on keeping the company money completely seperate and have put driver pay to myself in the CPM section based on 20CPM i figure this is a fair rate as the company fund will be paying for all truck maintnence and traveling expenses the driver pay is just my money to pay for personal hygene and anything the company will not pay for (such as deadheading home for a day or two or deadheading somewhere for better freight rates which i hope to minimize as much as possible). At this point my plan for success is keeping the mindset of working for the company and keeping company funds ENTIRELY seperate from personal funds. This will keep me from dipping into the new truck/major maintnence fund when that shiny chrome for the truck starts calling. I will treat myself as a company driver and ask myself "would a normal company pay for this" if no then it is on me.

 

Something to think about on changing your mindset of rates. The idea that taking a cheap load today that will only make you a penny profit to get to better rates is only going to hurt you in future. Once you establish with brokers that you are willing to take something cheap they will call your bluff every time.
There are 6 of us independent O/O's in my town and we all meet up for breakfast Saturday mornings when we are in town. Two of us can't seem to get decent rates. I'm hauling a load for CHR at $3+/mile that when the other calls on he can't get them to go above $1.30. But he has hauled cheap for them and can't break the cycle.
Whenever someone uses your cheap rate justification they are soon complaining about everything being cheap. You seem to be doing a lot of planning but you need to start thinking about what type of carrier you want to be. Cheap rates bite you over the long haul.

 

Bill what do you figure your cost per mile?

 

This week, using 2000 miles a week, my CPM is $1.22. This is just truck expense and maintance fund. I am not one for building in my personal expenses and overhead into my business.