Cents per mile bottom line.....what did i miss?

Thank you VERY much for the taking the time to break down my numbers and pose more questions.

 

I understand which ones are fixed and which ones are varaiable. How do you recommend figuring to pay for those costs if you don't figure them into running the truck? If you show all of those fixed costs as a one shot deal annually, you still need to figure out where the money is coming from to pay those expenses correct? What am I misunderstanding?

 

I'm having in issue with trying to respond to what you guys have posted. I keep getting a window pop open saying my response is less than 10 characters and it won't post the reply. Is anyone else having that problem?

 

Regarding the taxes, from what I've found out so far the actual percentage is 7.65% to cover Social Security and Medicare. As for the medical insurance, yes I've thought about that too but I haven't had the chance to go digging and see if it's something I could actually cover. I'm have no idea how that works yet.

You asked about paying the driver on a percentage basis. I've thought about that too but I'm not familiar with that type of pay structure so I'd really be taking a stab in the dark. Which way is usually preferrable to the driver?

The .04 for the WC insurance is unfortunately pretty accurate. I was quoted approximately $4000 for the year to cover the driver.

 

Definitely understand about needing health insurance. I'm covered through other means not related to this venture so I won't need to figure that into this avenue.

 

why would this work if I have $25k in cash reserves but wouldn't work without the cash reserves? Can you explain that a bit more? Are you referring to the fact of needing the cushion until my cash flow picks up? Once my settlements start to come in, you believe these numbers will add up at that point?

I 100% know the difference between a fixed and variable cost. But if your income stream is based off of a CPM basis, shouldn't all of your expenses be based on the same type of scenario? How else can you figure in your expenses if you don't break them down in that fashion? Where will the money come from if you don't show that the truck is generating the income to cover the expenses? I realize that many of the expenses I have listed will be paid at one shot for the year, but am I incorrect in showing how/where that money will come from?

Agreed that the raw cost is the same. BUT, if you run 50,000 miles or 200,000 miles it will GREALY affect your CPM to recoup that cost. Am I correct or looking at this completely wrong?

Yes. You are 100% correct. I'm trying to calculate this as closely as possible so I minimize the surprises. I am most definitely trying to determine if the rates are there to justify starting a company, buying a truck and turning a profit.

Many thanks again for those that posted on this thread.

 

I'll give that a shot and see if it works. Thankx!

HA HA! I DEFINITELY agree with you on this one. I would love to have enough cash to buy the truck outright and not have to slate that money to an actual payment. The problem is I'm going to use an '08+ truck because of CA and the regs that CARB/EPA have put in place. I could run an older truck (pre-'96) and get by without getting hassled by CARB/EPA but as of 2015 I'd have to replace the truck. Even if I were to buy something older than an '08, I'd have to add the DPF to the tractor.

So you are saying I need to simply revise my original CPM figure by pulling out my fixed costs and looking at them on a weekly/monthly/annual basis instead of breaking it down to a cpm figure? I honestly do understand what you guys are saying about the figures being fixed no matter how many miles you run. But don't you HAVE to break ALL expenses down to a cpm number to figure out your break even point? Without doing so, how would you ever know at what rate you could pull a load and lose/break-even/profit from that particular load? Just because it's a monthly, set amount it's still paid for on a cpm pulled in from the truck......am I correct or just being dense?

Trust me, I know all about older trucks and the maintenance cash they can eat through. ESPECIALLY if they have not had a very good maintenance program from the beginning! I see that one first hand on a daily basis. I'm counting on a lower mileage truck, with good maintenance to NOT have those issues. I completely understand they will not be maintenance free, but hoping they will provide lower maintenance costs.

Excellent points!

From what I determining so far, the driver will be mostly regional with the occasional trip to other locations. MOST, but not all, of the runs will be AZ, CA, NV. I'll be pulling a company trailer, not my own so I don't need to worry about setting aside anything for that just yet. At least until the time comes that I want to branch out into other avenues. I've spoken with an o/o for the same company and down time is very limited. But I certainly understand your point and would address that issue should it arise. It's not a forced dispatch so I would still have the freedom of picking loads that worked best for the truck and driver.

Again, excellent point. "Worst case scenario" could be MUCH worse than I've projected with my numbers.

I really appreciate the insight you've posted here. I also received the PM. I printed it out so I can study it and go over it better. Thanks again!!

 

You are not missing anything. I didn't figure it in because I will be pulling their trailers. They don't charge anything for using the trailer and don't charge me anything for maintenance of the trailers. I have mentioned before that I would be pulling company trailers but it may have been in a different thread. I apologize for not including that here.