Average revenue needed to survive.

My authority is only 2 months old. If you guys need a good insurance agent I have one to recommend from IA.

 

In order to give an educated answer you have to provide more details. Will they still pay weekly on loads, still provide a fuel card. Are you locked into an exclusive contact where you can only pull for them? Do you still get to use their trailer?
etc etc.

Side note, I had no idea prime paid 72 percent. ask the advertisements I see for them is straight mileage pay.

 

Not many realize $900 on a 600 mile load that they might be able to pick first thing in the am and deliver will add atleast $250 in their pocket going to a better year. They rather spend $200 on fuel and don't realize they didn't cover their daily cost that only shows up at the end of the month and the big question "why didn't I make any money"? These type of scenarios add up a lot to increase their costs because not only is their cost going up but also the miles they're driving.

Trying to explain to people things like this nowadays is a forbidden language.

 

Or maybe they just refuse to contribute to driving down the rates. And are strong enough financially to not be forced to take crap.

 

First year we paid 12k for insurance. I had 6 years cdl experience before I went on my own and a very clean driving record. When we started, the only insurance company that would take us was Progressive, and it was pretty expensive considering my truck and trailer together are only valued at 30k. We shopped around going into our second year and got a really good deal from a local insurance broker here in Pa. We have Daily insurance, the broker said they only accept squeaky clean driving records and will drop you if you start to get some dirt on it.

 

This is business. Goal is to make a profit. Principles are great when they are based on sound economic principles bit not when to make them work you need the full force of Bernie Sanders, a Unicorn and a Fairy with both a wand and picky dust.

But so you feel good make sure that you stop by OOIDA and get you bumper sticker business plan.

 

Don't think that buying new means trouble free. There are a lot of horror stories about poorly built trucks out there that are new, and a lot of trucks that had issues dumped on the market cheaply. Remember if that truck is in the shop, it doesn't produce money and with that, how long can you afford to be down? a week, three weeks? A month?

If you're running thin margins, then you won't last. You can't write off revenue lost because of it.

People who do their due diligence with purchasing a truck seem to fair a lot better than those who just buy it based on emotions or price when it comes to problems down the road. Too many people put credence into buying new as if it was a car, failing to see the issues that crop up can be the same as a heavily used one but overall the only reason to buy new to me is financial through accounting standards like end of life cycle triggers (cost of repairing in the future) through amortization of specific items.

I would dump that accountant because he/she is clueless - example if you will get audited, they may just say "employee" and force you to pay everything. However, what could be done is a limited partnership which eliminates the 1099 crap altogether or better yet a C corp that can spread the tax liabilities over a large area of business. People are cheap in business and expect to pay nothing but in truth there are so many ways to pay less without stupid LLCs, or trying to fly under the radar with 1099 spouses, it just sets them up for failure of one or another type.

I can't see that but if your break even point is 80 cents per mile, then you have something wrong in how you are accounting it. I can't get mine under a buck a mile for any reason and my trucks produce a lot of revenue with a lot less overhead than you do per truck. I have three payments and low insurance costs, and we plan our fuel purchases carefully, taking advantage of tax differences between the states (easiest way to save money).

Good luck.

 

I like a lot of what you post but for numbers based on a leased owner operator he should be under $.80/mile. Now, minimum profit to keep someone happy is a personal issue.

 

Kunkel?

 

I would agree but when you setup the accounting with replacement costs for say tires -not running them until they are bald but replacing them at X time, the expenses rise in the ledger. It doesn't mean at the end of the year you can't roll that excess money back into profits but it give you an added cushion to take care of big problems quickly and without financing it. Too many time people just take a flat rate for maintenance based on estimates and without thought of the life of components. I've been criticized for the way I am doing all of this but I've been making more money and expended without using a lot of financing and it seems to work for others.