How can one write an accurate O/O business plan?

There's software available that can help, although you'll have to input the particulars. http://www.businessplanpro.com/template_offer_lt2/?gclid=CNua7MaQyLcCFQSZ4AodixoAPw&pdv=c

 

A business plan should have contingencies for several different scenarios. You are correct in that you cannot predict when a truck will breakdown. If you plan on leasing to a carrier, they can give you average numbers for those in their fleet, but it won't likely include expenses because those will differ with each owner. I can own 10 trucks with 10 drivers and the expenses will vary with each truck. That can make it difficult to do a pro forma or estimate of your profit and loss.

OOIDA has a couple of spreadsheets that you can download and use to plug in your own numbers. Just go to their website. It isn't difficult to estimate fuel costs based upon the average cost of fuel. You can also predict your cost of pm's within reason based upon your oil change intervals. I change my oil at 15,000 miles. You may change your oil at 25,000 miles. But, the cost of an oil change can vary from about $200-350. Some of the new trucks can cost more due to the filters. There is a sticky on this forum that can help calculate costs for those who want to run their own authority.

A business plan is merely a plan to show how you will become successful. It doesn't have to be elaborate, but should demonstrate a certain level of thought about how you will succeed. I have written very comprehensive business plans for other businesses that I have owned. Some were rather extensive. A business plan should be tailored to what you want to do with your business and to whom you will show the plan. A banker may be more interested in seeing the numbers. If it is for your own purposes, you should try to make plans for contingencies in case things don't work as you would like. When the economy took a dive in the fourth quarter of 2008, few would have predicted the severity of the downturn. The first quarter of 2009, it was difficult to find freight to haul at any rate. That is unusual. There is usually something to haul, even if it is cheap. For those of us who had money in reserve, we managed to survive, but not without some nicks and scrapes.

You need to write what you will do with the truck, to whom you will lease (if known) and how you will be compensated. If you finance your equipment, you should allow an estimated amount for the payment. I would not want to start with a payment over $1,000/month. The lower your monthly payment, the better. I break down costs based upon things such as tires, pm's, fuel, etc., I use a base of 10,000 miles per month. You may do more miles, but that is a good average and achievable with most carriers with a national average. It allows you to take time off from time to time. Once you start your business, you may need to make adjustments to your business plan based upon real historical figures. Once you have at least a year of ownership under your belt, you will have a pretty good indication of your revenue and expenses.

 

There is no right answer to this. It is definitely harder to write up an accurate plan when you are using the spot market as there are countless variables.

First of all you need to figure out what type of company/driver you want to be. Van, Reefer, Flat. As well what type of hauls do you want to do. Are you wanting to do a 300, 500 or 1000 mile radius of where you live. Or do you want to only do coast to coast runs. The economics will very in all of these so you need to figure this out first then you can start to look at the numbers.

What you need to do is create several scenarios. What you expect to happen. Do another with higher expenses such as a lot of repairs or higher fuel costs. One with fewer miles to figure out where your breakeven point on your fixed costs are. And one with lower revenue because of lower rates.

Its all about playing around with your fixed and variable expenses to see how that will change your business and profitablility. It should go without saying that do up these numbers more conservatively then you would hope for.

Big things to remember. Make sure you calculate in your payroll taxes if you are planning on paying yourself as an employee.
Your business reserves. You will go several weeks before you will see a steady flow of money coming in so you need to make sure you are able to bridge that initial period as well as any holidays you may take. Also have money set aside for big repairs, tires and your annual inspection.
Look at keeping a seperate account for your sales or business taxes so that you don't have to worry about paying them when they come due.

Cash flow is the biggest thing you will need to overcome. If the money is tight it will lead you to do things that will hurt you in the long run. Not neccessarily taking cheap freight to keep you moving but doing things like quick pay and having the broker charge you 5% of that. That can be all or most of your profit margin.

 

There are many resources for development of a business plan. Depending on where you live your county or state will have a business development office whose sole function is to help people start businesses; these agencies will have business planning kits. If you Google "business plan" you'll get a bunch of links to business plan software but if you take some time to look through the links you'll find many free business plan templates posted by development agencies across the country. Another great and free resource is SCORE an organization of retired business executives who provide assistance for free. Here are a couple good links that I used to build my plan:
http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=7&ved=0CGwQFjAG&url=http%3A%2F%2Fwww.fillmorecountydevelopment.org%2FBUSINESS_PLAN_FORMAT__Basic_2010-02.doc&ei=KRStUcb1HO6uyAGTnIDYAw&usg=AFQjCNG4VL7MiJEH1r-v04T10uDqwK3RnQ&bvm=bv.47244034,d.aWc
http://www.google.com/url?sa=t&rct=...DCf2b9is8c0AOd5S3xNqQFA&bvm=bv.47244034,d.aWc
http://www.bizstartsmilwaukee.com/BizFiles/PDFs/2008_Bizstarts_Library_Business_Plan__Score_.pdf

Hope this helps.

 

Thanks for posting this topic! Great read!

 

Gentleman-Won't get into bull S. but first and foremost in a business plan; that matters to the people interested is CASH FLOW. How will it be generated. Last will be EXPENSE PLAN proposed.

 

That business plan pro software is what i used. Would recommend it

 

I wrote mine with some "freedom" to adjust to the market.

It doesn't require you to put complete detail into it. Who are you? What are you going to do? Who's the competition? How are you going to make money? How are you going to do things? What's stuff going to cost you? Examples of how to get broker loads. Etc.

 

I am going with this now. Moving business to new location. I want to combine the lobstering with the trucking to go from ocean to reefer. So far so good. My biggest asset is because of the fishing,we come under the USDA which is another asset for financing this project. Business plan included personal history, all equipment, i.e, boats, traps, line, how it will benefit business. The eye opener, was my rig. It already showed him how it improved our business 10X. Shipping to Fla. When we needed lobs bought of other boats for at a better boat price which made people happy. So it started to spread. The agent was impressed by my plan.He wanted past and future history of my truck and trailer which was another 95 pages. He knew all about trucking because he was hauling milk for years which was another asset. I could go on and on. Lastly, expence plan can be very "general" but you must have it. One example, a break down- how would you handle it, lost time,how would yopu make up time ect. This is only a summary. I hoped it helped. Mike-Z