Quotes 911

These guys turn fixed costs into variables because a majority of trucking operates on a cents per mile basis. Most drivers never went to college, and most Americans, including those that did, suck at economics. It's just the simplest way for long term goals. Unfortunately, when you're running behind your projections in cpm situation, the only thing you can do is run more miles to get back on track. Their revenue never bounces around so it is probably the most effective model for them to use.

I do not use this model. I can also do math in my head. I've taken Macro and Micro Economics in College. I don't look for cents per mile profit, I look for dollar per mile profit. If I had to pinch pennies just to ensure a profit margin, or run 60 mph to make a profit, I wouldn't be doing this. The risk and management wouldn't be worth the reward.

I've seen owner operators calculate fuel mileage and cost per mile in so many ridiculous ways, I am immediately suspect of any claims. How hard is it divide miles run by gallons used? Anyone that puts their mortgage and car payment in their cost per mile isn't doing it right either!

 

Couldn't agree more Forty!
We run on %, and guys call me regards loads etc, first question I ask is how much is it to run your truck. I have to meet a single one who can answer that, or even how much their fuel is a mile.
Folks need to realize, they bought a business, not just a truck. Doubt you would see a person buying a corner store etc, without either a solid business plan or knowing his fixed operating expenses.

Martin

 

I must be doing it all wrong figuring household expenses in as well. The way I see it if there is nothing left after the truck and household there is no profit. I do know what my truck cost to roll down the highway excluding household but I still see no way I can ignore household.

 

We're talking about running a business here, not a life. When you were a company driver, you still had a place to live, right? You still ate food right ? Therefore your house has no bearing whatsoever on your business. Your living expenses are part of your household budget, not your business p & l statement. Pay yourself a wage, and keep your family budget separate. You will then find your real break even point

 

Those "in a way" are figured into your business expenses. They are called your wage.

Which also needs to include Self-employment tax as well as state and federal income taxes.

But to put your mortgage into your business account along with all of your other household budget items is blurring lines that should not be crossed in a business environment.

I literally fired my ex-wife from doing our accounting work for doing just that.

 

Ok, the "wage" in my cost is just that. It does cover all household. I don't break it down any further than just being a wage. I don't put fuel cost per mile for the Nissan Altima or Dodge Ram although oddly I do know those and actually keep up with mpg's on every fill up, sad, but true.

 

Exactly, your wage technically should be what it would take to put a driver in your truck. The profit would be what's leftover while you're kicking back drinking beer with Bill and Red, talking "business" of course, so you can deduct the beer

 

The formula... First off, know your cost per mile to operate before doing anything. Then, do not even pick up the phone until you have typed in on googlemaps your empty address starting point, to the shipper's city/state on the next load then the receiver's city/state. You MUST know that number before you even call otherwise brokers will give you the short miles as a crow flies... Have a calculator handy and figure your bottom dollar on what those miles tell you... If you're leased to someone make sure you always take their percentage out as well to see how things look.... Work off that and don't go below your bottom. Over time you will learn when to hang up and not even waste time on a counter offer. I always figure If they're $200 or more below my bottom rate it's time to say goodbye no sense even countering. Weight really is never an issue for me unless I'm in a crappy market then it's going to be very light or I'm deadheading. When rates are good I could care less what the weight is. It takes less than 30 seconds to type in cities and states on any given load I call on with my calculator at the ready. You have to know your markets as well. In some markets rates are just the pits. In others they are not but you will hear lots of pitiful quotes regardless, be patient and hang in there til you get the hang of it..

 

Been reading this and can't believe that someone doesn't put in a complete wage cost. Not just your household costs and then anything extra comes out of the profit. if you work for someone you need X amount of gross income or you would go someplace else. But you would work for yourself for less? Just so you could brag about the large(false)profit you make? Take your gross wages(if you drove for someone)and add 30-35% to that for what an employer pays for(fica/medicare/umc/comp/medical). Thats the wages you need. Can't do that and make a profit,stay working for those that do.