Budgeting for a new trucking company?

how long have you been driving?

 

Let's start with this question.

Then we can tell you what you may need to know.

 

I hate to state the obvious...but this info is readily available if you put some effort...

I found it by just scratching the surface

heck...google will do it for you

 

I've owned, driven, managed my own tractor and trailer for a long time. Managing trucks is different than driving trucks, true. But knowing what the drivers need to be happy, which makes YOU profitable is one of the keys to success. One of the ways to understand what makes a driver happy is to drive yourself. 7 years is a nice long time. You should have a clear understanding of what keeps drivers happy from an operational standpoint. Any reasonably intelligent person with 7 years driving experience already should understand what fixed and variable costs are.
Anything you receive a FIXED bill for every month (Truck payments, insurance..etc) are just that, FIXED costs. Variable costs are those expenses that fluctuate, or vary: fuel, maintenance. Some of variable costs are adjustable and within the control of the carrier (to an extent)...how fast the truck will go, idle time, some are not like winds, snow, etc.
Just remember: when you start adjusting your variable costs by taking away driver comforts like not allowing idle time and not providing APUs, you will lose drivers just as fast as swift or any other carrier. It doesn't mean you need to allow your drivers to go hauling down the highway at 80 MPH either.....find a nice balance and your drivers will be happy, you will make money and you can grow.
One big myth that needs to die in the trucking industry is the proverbial "hot load".....sorry friend, there are no (or very few) hot loads; that was a BS way of pushing drivers to make unsafe decisions and eventually help led to more governmental control (ELOGS)..etc. Better to book your loads well in advance, give the driver plenty of time to take care of his/her basic needs and wants, load at a reasonable hour, find a place to park so they can wake up refreshed, happy, NOT STRESSED, and truck along to their destination. When the company makes intelligent decisions, you attract drivers who also operate intelligently, which turns into profitability.

 

Before you start asking, let's define a few things

First you are wrong, driving give you the foundation to understand the business, it is not totally different, it is just another aspect of the business.

Second define trucking company.

I mean do you intend to own trucks and hire drivers or just own one truck and be a driver?

What is it.

The third is there is a start up budget and a running budget, both are different and both are important.

This also means that there is a difference between a budgeting the company and managing the company. YOU don't manage your budget, you manage your expenses and company.

 

Instead of that, let's keep it out in the open so others can learn and/or comment.

However I recommend you going to the OOIDA and downloading their spreadsheet. it has a lot to offer.

 

If you want to be a company with a thousand trucks for sake of a hypothetical discussion,

Your fuel, tires and payroll will be the one expense that will keep you up at night, particularly the two right rear outside trailer tires. Your shop will consume everything that keeps trucks running plus buying tools and such.

You will have a building, some land. A parking lot that needs repaving every 15 years or so maybe a trailer row that has a strip of strong concrete under the landing gears. You will have taxes, utilities and repairs after storms to this building.

Marketing, spending money to hire and fire drivers. Money to recover stranded rigs or perhaps deliberately castaways by some you fired. Or bounty hunter to see about that trailer, load etc that has gone missing. Qualcomm services which have thousands just to install onto one truck and then a ongoing expense of both data services, tracking and people 24/7 ready to handle that information.

Drug testing.

Law enforcement. Legal issues. Permits. Violations. Logbook storage for 6 months. Computers. You will go through a bunch every few years. Data storage. Telephone communications. Insurance and so on.

It never ends. Once you get something going this big or small it becomes a living monster. You will need people whose work is strictly to spend as little as possible.

You cannot build a budget without first knowing what capital you have on hand. And there are the repayments to the lenders at certain interest rates. And if you have stock holders or investors you have to keep them happy. what you say does not necessary mean it will be so. THEY might say no you cannot buy 100 new tractors this year.

Executive services. If you run a company with a board of directors you need to set aside a space for them to meet and maintain certain luxuries so they can actually be stressfree and think about what they are doing as they are working through it. If they cannot think quietly without being disturbed then whatever comes out is going to be horse poo.

This is just a surface. I recall one in particular who told his shippers and recievers he will have his trucks run a particular route in 15 hours flat. Meaning one day delivery including a 8 hour break in the berth. Unfortunately he had driven the route in his personal car and all of his trucks consistently needed 3 more hours due to the topography of the rolling hills and prevaling winds plus traffic of three major cities to deliver. And they were late. Not long after the company lost the contract.

Back to legal services. Articles of Incorperation. Permits from your local government, permission from city hall of your town council to build and operate a trucking company. And involving more and more and more. Even laying water and sewer connections could potentially be tens of thousands. I laid a simple sewer line of about 550 feet from my home and that was 8700 dollars. All done. What do you think is going to cost you maintaining 20 toilets? You will need a cleaning staff to do things your office people wont.

Good luck. Businesses fail all the time. When they do make sure it does not involve the confisication of your personal home, property etc to pay the debts of the failed concern.