Number one cause

They don’t know their numbers

 

Only one ... Don't know how to manage a business ... Doesn't matter if you're an o/o, l/o or an l/p.

 

The number one cause is that they believed stories of how much money o/os were making. Then they spent all the little money they had or borrowed to get the truck and in the end they where not clearing $4000 a week but $1520 and after the truck broke down, they had no money to fix it and they got broke too.

 

The above quote was from here:

Forced Learning Is the Best Learning

 

Everyone I know that failed at it was not because of revenue but because of expenditure. Notice I didn't say expense.

They start making a lot more money and see it as a pay raise and start buying a new car, some toys, maybe a new house, vacations, don't save enough for taxes and then a couple breakdowns and they can't afford to fix the truck.

 

They have no idea what their actual operating expenses are.
You have to know how much it's costing you to run the truck and you have to know where every penny goes.
If a rookie knew exactly what it costs to run a truck, and run it right, he'd probably be surprised.

 

That brings up a good point: before making the leap to buying a truck, a fella needs to run the numbers on his company truck for a year or two. Every time you buy fuel, write down what was spent. Every oil change/service. Every time it goes to the shop. Yes, you may have to ask some questions to find out what it cost, since you don’t own the truck, but it will benefit you to do so. Also, you need to know what the loads you’re hauling are paying.

For instance, I haul frac sand. I knew what the loads were paying and I ran the numbers the last two years that I was in a company truck, and I knew I was gonna be able to make those numbers work before I ever went and bought my own truck.

Don’t take anyone’s word for it. What works for one may not work for the next guy. One guy is in debt and needs to make more money to pay the bills. A guaranteed paycheck every week. That guy should probably stick to being a company driver, cuz there are gonna be weeks that an O/O is in the hole. Truck made 3 grand and then needed 4 grand worth of tires. If that money ain’t in the bank, you’ve got a negative week.

 

“The inability to operate a Casio calculator, interpret the devices’ results, or believe it’s calculations.”

That, and under capitalization.

And poor revenue management.

Bugger. That’s 3 reasons.

 

I think what a lot of what was said here can be summed up thusly: over confidence. You dont know what's going to break next week, or if you'll even get paid next week. My truck hasn't made a penny over expenses in two weeks. If you dont have the capital to cover those... disasters, you'll be under in a hurry. And that covers people not setting enough aside for tax too