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Some numbers for new O/O

Discussion in 'Ask An Owner Operator' started by DUNE-T, Aug 23, 2018.

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tommymonza Road Train Member

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Zeviander said: ↑

Also instead of jumping into the deep end (own authority with trailer) head first, you could work with someone with an established authority, their own trailers and get freight through them. Build up some cash reserves and take care of business.

Or work as a company driver for someone that doesn't micromanage you, gives you independence and nice equipment to drive. I love the idea of running my own truck, but if I'm in nice equipment, I don't care who owns it as long as I'm getting paid.

Great OP btw.
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My plan exactly but my current company keeps me here for now even though the pay isn't top pay but fair with out Micro management . Just do your job and help out if they need you in a Pinch and they will work with you for time off also.

The company that I have been with the last 8 months has me in a nice Western Star Glider that has 300 thousand but runs and looks like new and they keep all their tankers in top condition also along with the shop being Johnny on the Spot for any needed repairs.

Even if I wasn't planning on going O/O soon they would make it very hard for me to go to work for someone else for more money.

The new nice Western Star glider equipment really has me Sold.

And They may not be the Prettiest Girl at the Dance ,but at least I know who I am dancing with.

tommymonza, Oct 31, 2018

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Baserun05 Bobtail Member

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DUNE-T said: ↑

There have been a lot of threads lately here and in Facebook groups from people wanting to start their own business. Here are some rough numbers to show how much does it really cost to run a truck.
Lets take a single O/O with new authority and a dry van trailer, who will run 100% brokered loadboard freight (thats how majority of people start out, right?). Lets say this guy (John) has a family and wants to be home every weekend to have somewhat normal life, so he will work Mon-Fr.
1. Truck payment of $1500 per month
2.Average truck/trailer yearly maintenance/repair bill is $25000, so lets say $2000 per month
3. Trailer payment $600 per month. Yes, you should get a brand new trailer. Running a used one will cost you the same or most likely more, when you calculate the repairs and downtime
3.Insurance for the first year will be $12-16k, so lets say $1200 per month
4. Driver salary (pretend you are an experienced company driver and you make $72k per year, so $6000 per month.
5. Fuel $5000 per month
6. Ifta, plates,parking, misc expenses $1000 per month
So we have $17300 in expenses. Now for being a business owner and all the headaches, you deserve another $1000 per week, which makes it $21300 per month, I will round it up to $22000.
$22000 per month, means you need to gross at least $5500 per week, or $1100 per day. You have to figure out lanes/rates and how to make that amount every 5 working days and be home for the weekend.
If everything goes smooth as planned, John will make $120000 per year and be a happy camper.

Of course things never go as planned. John takes time off to spend time with his kids, some repair downtime adds up and now gross revenue starts shrinking. John is lucky if he does all repairs at home, thats usually cheaper. Because if his 500k Cascadia starts having DEF problems on the road and a gangsta dealer charges him $6000 to fix it, on top of the $1000k towing bill, his maintenance/repairs budget starts having problems. Its not uncommon for a new O/O to dump $40k into his truck during each of the first couple years of ownership. The worst I have seen is complete engine failure and a few months of downtime. (happened to me too haha).

Now think if you have a tough enough skin to deal with shark brokers every day, make your revenue goals and deal with all the headaches of owning this business. Remember, in busy months you have to gross much more, than $5500, because in the slow season you might be working only couple of days per week and only do $2-$3k. It means you have to play constant poker games on spot market. You have to be ready to talk to 50 people per day, constantly hear "NO" for an answer, be very resistible to stress and be very efficient with time management. The first year you will be spending time learning lanes,you will make many mistakes, like taking 1500 miles load to Miami for $3500 and thinking its a great rate, or taking already late loads to grocery warehouses and sitting there for 3 days waiting to get unloaded, while getting paid $150 per day broker layover fee. Some of those mistakes can have you make a great big $0 profit at the end of the week.

Oh, also, if you are one of those people who just want to buy a truck and put a driver in it, think about all that and about your truck going down for a month and how you will be paying your driver to seat and wait while your truck is getting fixed. Also think about your driver not checking oil level, ####ing up the engine 1000 miles away from home, getting put out of service for some stupid reason, damaging the load, e.t.c and another 100 mistakes crappy drivers do, because being a new business, you will not be able to hire great experienced drivers, they usually already have good places to work at.

Some people will be lucky and have less expenses and some will be lucky to make more money, but you still will be around numbers posted above. Good luck
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So right

Baserun05, Nov 1, 2018

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Bean Jr. Road Train Member

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Although it really doesnt make much of a difference, why new trailer for $600? Maintenance on trailers is mostly tires and brakes. Most dry vans have a serviceable life of 17 years, so buying used will save in both down payment and monthly payments.

Bean Jr., Nov 4, 2018

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jochnessmonster Bobtail Member

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This is my current ins and outs:

Commercial truck and trailer loan 230,000
Weekly income 5800-6500
Weekly miles 3000-3200
Monthly loan payment 2,760
Insurance 1,200
Repairs 25,000 a year (but nothing major as of yet.)
Fuel 3500 a month before FSC and Comdata discounts
Misc 500
Food 500
Rent 0
Personal expenses 750

6200x7= 24,800 -2,760 -1,200 -3500 -500 -500 -750 =15,590 profit a month +/- 1000

14,590.00 profit a month. ..ish.

jochnessmonster, Nov 5, 2018

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TIMPTE 527 Medium Load Member

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I'm just blown away that your truck and trailer loan is as much as a home loan. I can only imagine about the time something like that is paid off its time to upgrade and start all over again. I hope this doesn't happen 20-30 years later the only thing to show for it will be a lot of hard work and an empty bank account.

TIMPTE 527, Nov 5, 2018

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Scooter Jones Road Train Member

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jochnessmonster said: ↑

This is my current ins and outs:

Commercial truck and trailer loan 230,000
Weekly income 5800-6500
Weekly miles 3000-3200
Monthly loan payment 2,760
Insurance 1,200
Repairs 25,000 a year (but nothing major as of yet.)
Fuel 3500 a month before FSC and Comdata discounts
Misc 500
Food 500
Rent 0
Personal expenses 750

6200x7= 24,800 -2,760 -1,200 -3500 -500 -500 -750 =15,590 profit a month +/- 1000

14,590.00 profit a month. ..ish.
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3500 dollars a month in fuel cost on 12000 plus miles?

Scooter Jones, Nov 5, 2018

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Scooter Jones said: ↑

3500 dollars a month in fuel cost on 12000 plus miles?
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Turbo3000D

Ruthless, Nov 5, 2018

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Scooter Jones Road Train Member

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Ruthless said: ↑

Turbo3000D

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I guess...

Scooter Jones, Nov 5, 2018

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mover man Road Train Member

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TIMPTE 527 said: ↑

I'm just blown away that your truck and trailer loan is as much as a home loan. I can only imagine about the time something like that is paid off its time to upgrade and start all over again. I hope this doesn't happen 20-30 years later the only thing to show for it will be a lot of hard work and an empty bank account.
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Just pipping in, everyone I no, who has payments. Who did not buy a 10-15 year or older truck. Payments are equal to or highet than a mortage (including principal interest escrow) What blows me away is this.
Buy a new truck $150-170k put 20k down. In 5 years its paid for.
Buy a house depending in where you live. 150-350k put 20% down THIRTY YEARS before it is paid for.
Yes I no about 15 year mortage and using helo's etc to pay early. Just talling about conventional mortage.

mover man, Nov 5, 2018

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mover man Road Train Member

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Scooter Jones said: ↑

3500 dollars a month in fuel cost on 12000 plus miles?
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.29 com or $1.75 per gallon. I want his fuel discount card!!

mover man, Nov 5, 2018

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