How do my preliminary business plan numbers look?

Discussion in 'Ask An Owner Operator' started by double yellow, Nov 30, 2013.

  1. double yellow

    double yellow Road Train Member

    5,946
    10,065
    Aug 28, 2011
    State of Jefferson
    0
    I'm in the preliminary stages of developing a business plan for running a dry van OTR -- how accurate do my numbers seem? What am I missing? I'm attempting to compare costs of buying preEGR vs CARB compliant vs new tractor (as well as basing operations in Tennessee vs California):


    [TABLE]
    [TR]
    [TD]2002[/TD]
    [TD="width: 155"]$15,000.00[/TD]
    [TD="width: 99"]cash[/TD]
    [TD="width: 86"]
    [/TD]
    [/TR]
    [TR]
    [TD][/TD]
    [TD]Year 1[/TD]
    [TD]Year 2[/TD]
    [TD]Year 3[/TD]
    [/TR]
    [TR]
    [TD]Tractor[/TD]
    [TD]$15,000.00[/TD]
    [TD]$0.00[/TD]
    [TD]$0.00[/TD]
    [/TR]
    [TR]
    [TD]Trailer[/TD]
    [TD]$15,000.00[/TD]
    [TD]$0.00[/TD]
    [TD]$0.00[/TD]
    [/TR]
    [TR]
    [TD]Maint/Repairs[/TD]
    [TD]$25,250.00[/TD]
    [TD]$23,625.00[/TD]
    [TD]$27,000.00[/TD]
    [/TR]
    [TR]
    [TD]Permits[/TD]
    [TD]$4,000.00[/TD]
    [TD]$3,750.00[/TD]
    [TD]$3,750.00[/TD]
    [/TR]
    [TR]
    [TD]Insurance[/TD]
    [TD]$10,000.00[/TD]
    [TD]$10,000.00[/TD]
    [TD]$10,000.00[/TD]
    [/TR]
    [TR]
    [TD]Fuel[/TD]
    [TD]$68,850.00[/TD]
    [TD]$69,525.00[/TD]
    [TD]$70,200.00[/TD]
    [/TR]
    [TR]
    [TD]Subscriptions[/TD]
    [TD]$2,400.00[/TD]
    [TD]$2,400.00[/TD]
    [TD]$2,400.00[/TD]
    [/TR]
    [TR]
    [TD][/TD]
    [TD][/TD]
    [TD][/TD]
    [TD][/TD]
    [/TR]
    [TR]
    [TD]Total Expenses:[/TD]
    [TD]$140,500.00[/TD]
    [TD]$109,300.00[/TD]
    [TD]$113,350.00[/TD]
    [/TR]
    [TR]
    [TD][/TD]
    [TD][/TD]
    [TD][/TD]
    [TD][/TD]
    [/TR]
    [TR]
    [TD][/TD]
    [TD]3 year cost:[/TD]
    [TD]$363,150.00[/TD]
    [TD][/TD]
    [/TR]
    [TR]
    [TD][/TD]
    [TD][/TD]
    [TD][/TD]
    [TD][/TD]
    [/TR]
    [TR]
    [TD][/TD]
    [TD][/TD]
    [TD][/TD]
    [TD][/TD]
    [/TR]
    [TR]
    [TD]2010[/TD]
    [TD]$75,000.00[/TD]
    [TD]15k cash, 15% financing 2 yrs[/TD]
    [TD]
    [/TD]
    [/TR]
    [TR]
    [TD][/TD]
    [TD]Year 1[/TD]
    [TD]Year 2[/TD]
    [TD]Year 3[/TD]
    [/TR]
    [TR]
    [TD]Tractor[/TD]
    [TD]$49,908.00[/TD]
    [TD]$34,908.00[/TD]
    [TD]$0.00[/TD]
    [/TR]
    [TR]
    [TD]Trailer[/TD]
    [TD]$15,000.00[/TD]
    [TD]$0.00[/TD]
    [TD]$0.00[/TD]
    [/TR]
    [TR]
    [TD]Maint/Repairs[/TD]
    [TD]$20,250.00[/TD]
    [TD]$23,625.00[/TD]
    [TD]$27,000.00[/TD]
    [/TR]
    [TR]
    [TD]Permits[/TD]
    [TD]$4,000.00[/TD]
    [TD]$3,750.00[/TD]
    [TD]$3,750.00[/TD]
    [/TR]
    [TR]
    [TD]Insurance[/TD]
    [TD]$11,000.00[/TD]
    [TD]$10,500.00[/TD]
    [TD]$10,000.00[/TD]
    [/TR]
    [TR]
    [TD]Fuel[/TD]
    [TD]$67,500.00[/TD]
    [TD]$68,175.00[/TD]
    [TD]$68,850.00[/TD]
    [/TR]
    [TR]
    [TD]Subscriptions[/TD]
    [TD]$2,400.00[/TD]
    [TD]$2,400.00[/TD]
    [TD]$2,400.00[/TD]
    [/TR]
    [TR]
    [TD][/TD]
    [TD][/TD]
    [TD][/TD]
    [TD][/TD]
    [/TR]
    [TR]
    [TD]Total Expenses:[/TD]
    [TD]$170,058.00[/TD]
    [TD]$143,358.00[/TD]
    [TD]$112,000.00[/TD]
    [/TR]
    [TR]
    [TD][/TD]
    [TD][/TD]
    [TD][/TD]
    [TD][/TD]
    [/TR]
    [TR]
    [TD][/TD]
    [TD]3 year cost:[/TD]
    [TD]$425,416.00[/TD]
    [TD][/TD]
    [/TR]
    [TR]
    [TD][/TD]
    [TD][/TD]
    [TD][/TD]
    [TD][/TD]
    [/TR]
    [TR]
    [TD][/TD]
    [TD][/TD]
    [TD][/TD]
    [TD][/TD]
    [/TR]
    [TR]
    [TD]2014[/TD]
    [TD]$152,500.00[/TD]
    [TD]15k cash, 8% financing 3yrs[/TD]
    [TD]
    [/TD]
    [/TR]
    [TR]
    [TD][/TD]
    [TD]Year 1[/TD]
    [TD]Year 2[/TD]
    [TD]Year 3[/TD]
    [/TR]
    [TR]
    [TD]Tractor[/TD]
    [TD]$66,708.00[/TD]
    [TD]$51,708.00[/TD]
    [TD]$51,708.00[/TD]
    [/TR]
    [TR]
    [TD]Trailer[/TD]
    [TD]$15,000.00[/TD]
    [TD]$0.00[/TD]
    [TD]$0.00[/TD]
    [/TR]
    [TR]
    [TD]Maint/Repairs[/TD]
    [TD]$10,125.00[/TD]
    [TD]$16,875.00[/TD]
    [TD]$20,250.00[/TD]
    [/TR]
    [TR]
    [TD]Permits[/TD]
    [TD]$4,000.00[/TD]
    [TD]$3,750.00[/TD]
    [TD]$3,750.00[/TD]
    [/TR]
    [TR]
    [TD]Insurance[/TD]
    [TD]$14,000.00[/TD]
    [TD]$12,000.00[/TD]
    [TD]$10,000.00[/TD]
    [/TR]
    [TR]
    [TD]Fuel[/TD]
    [TD]$67,500.00[/TD]
    [TD]$67,500.00[/TD]
    [TD]$68,175.00[/TD]
    [/TR]
    [TR]
    [TD]Subscriptions[/TD]
    [TD]$2,400.00[/TD]
    [TD]$2,400.00[/TD]
    [TD]$2,400.00[/TD]
    [/TR]
    [TR]
    [TD][/TD]
    [TD][/TD]
    [TD][/TD]
    [TD][/TD]
    [/TR]
    [TR]
    [TD]Total Expenses:[/TD]
    [TD]$179,733.00[/TD]
    [TD]$154,233.00[/TD]
    [TD]$156,283.00[/TD]
    [/TR]
    [TR]
    [TD][/TD]
    [TD][/TD]
    [TD][/TD]
    [TD][/TD]
    [/TR]
    [TR]
    [TD][/TD]
    [TD]3 year cost:[/TD]
    [TD]$490,249.00[/TD]
    [TD][/TD]
    [/TR]
    [TR]
    [TD][/TD]
    [TD][/TD]
    [TD][/TD]
    [TD][/TD]
    [/TR]
    [TR]
    [TD][/TD]
    [TD][/TD]
    [TD][/TD]
    [TD][/TD]
    [/TR]
    [TR]
    [TD]Miles/year[/TD]
    [TD]revenue/mile[/TD]
    [TD]Gross revenue[/TD]
    [TD][/TD]
    [/TR]
    [TR]
    [TD]135000[/TD]
    [TD]$1.60[/TD]
    [TD]$216,000.00[/TD]
    [TD][/TD]
    [/TR]
    [TR]
    [TD][/TD]
    [TD][/TD]
    [TD][/TD]
    [TD][/TD]
    [/TR]
    [TR]
    [TD][/TD]
    [TD]Annual Costs[/TD]
    [TD][/TD]
    [TD][/TD]
    [/TR]
    [TR]
    [TD][/TD]
    [TD]California[/TD]
    [TD]Tennessee[/TD]
    [TD][/TD]
    [/TR]
    [TR]
    [TD]Health Insurance[/TD]
    [TD]$3,000.00[/TD]
    [TD]$900.00[/TD]
    [TD][/TD]
    [/TR]
    [TR]
    [TD]Workman's Comp[/TD]
    [TD]$10,000.00[/TD]
    [TD]$4,000.00[/TD]
    [TD][/TD]
    [/TR]
    [TR]
    [TD]Income Tax[/TD]
    [TD]8.00%[/TD]
    [TD]0[/TD]
    [TD][/TD]
    [/TR]
    [TR]
    [TD][/TD]
    [TD][/TD]
    [TD][/TD]
    [TD][/TD]
    [/TR]
    [TR]
    [TD][/TD]
    [TD][/TD]
    [TD][/TD]
    [TD][/TD]
    [/TR]
    [TR]
    [TD][/TD]
    [TD]Annual Profit (normalized over 3 years)[/TD]
    [TD][/TD]
    [TD][/TD]
    [/TR]
    [TR]
    [TD][/TD]
    [TD][/TD]
    [TD][/TD]
    [TD][/TD]
    [/TR]
    [TR]
    [TD][/TD]
    [TD]California[/TD]
    [TD]Tennessee[/TD]
    [TD][/TD]
    [/TR]
    [TR]
    [TD]2002[/TD]
    [TD][/TD]
    [TD]$90,050.00[/TD]
    [TD][/TD]
    [/TR]
    [TR]
    [TD]2010[/TD]
    [TD]$58,299.09[/TD]
    [TD]$69,294.67[/TD]
    [TD][/TD]
    [/TR]
    [TR]
    [TD]2014[/TD]
    [TD]$40,016.97[/TD]
    [TD]$47,683.67[/TD]
    [TD][/TD]
    [/TR]
    [/TABLE]
     
    Last edited: Dec 1, 2013
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  3. birdmanfromsc

    birdmanfromsc Bobtail Member

    25
    19
    Oct 6, 2013
    upstate, sc
    0
    Don't forget the 15% FET ( federal excise tax ) on a new truck
     
  4. GITRDUN45

    GITRDUN45 Heavy Load Member

    712
    235
    Sep 30, 2013
    0
    So glad I didn't go to his school for Math.
     
  5. double yellow

    double yellow Road Train Member

    5,946
    10,065
    Aug 28, 2011
    State of Jefferson
    0
    Thanks, updated (though I used 12%)

    Not sure where you're going with this... Did I miss something?
     
  6. GITRDUN45

    GITRDUN45 Heavy Load Member

    712
    235
    Sep 30, 2013
    0
    Curious to see where you explain how you came up with those #'s?
     
  7. double yellow

    double yellow Road Train Member

    5,946
    10,065
    Aug 28, 2011
    State of Jefferson
    0
    $15,000 for a trailer in all examples.

    2002 tractor using price of $15,000 (12.7 Columbia with 1.x million miles) and $5000 in delayed-maintenance & modification costs in addition to 15cpm maintenance/repairs for the 1st year. 17.5cpm 2nd year, 20cpm 3rd year. Fuel costs rising from 51cpm 1st year to 52cpm 3rd year.

    2010 tractor using a price of $75,000 (DD13/15 Cascadia with 300K miles), 15K down payment, 60K loan financed for 2 years at 15% interest. Maintenance/repairs increasing from 15cpm to 20cpm over 3 years. Fuel costs rising from 50cpm to 51cpm over 3 years

    2014 tractor using a price of 135,000 plus 12% FET (~152K), 15K down payment, 137K loan financed at 8% over 3 years. Maintenance/repairs increasing from 7.5cpm to 15cpm over 3 years. Fuel costs rising from 50cpm to 50.5cpm.


    Insurance based on quotes posted on the forums for 10K/year for a used truck/trailer. I assume a new truck would cost more, guesstimated 14K.

    Permits pretty much a guess. Assuming trailer registration cost is a one-time thing, so first year expense higher by that ($250?). I'm guessing at 2K to register tractor, and another 1500 in permits to go through various states.


    Subscriptions include load boards (I believe I heard KR say $150/month for an upgraded version giving you more data), membership dues to professional organizations, etc.


    Health insurance is based on Anthem Blue Cross/Shield Obamacare Silver -- something that costs ~$250/month in California, and $75/month in Tennessee.
    Workman's comp was based on an online insurance quote for a truck driver earning 60K. It was over 10,000 in California, the same coverage was under $4,000 in Tennessee. California also has an ~8% tax rate on corporate income (I'm leaning towards LLC), but that turns out to not matter very much when earning so little & depreciating such large assets in a small amount of time.


    Revenue/mile is based on corporate filings from publicly traded mega's (ranges from 1.40-1.80/mile)

    Miles/year is 2700/week for 50 weeks and is well under my capacity to drive, but I'm presuming I'll have to spend more time sitting & working brokers/load boards.
     
    Grijon Thanks this.
  8. GITRDUN45

    GITRDUN45 Heavy Load Member

    712
    235
    Sep 30, 2013
    0
    Well by ur #'1 I see but not saying I agree. Health insurance NOT a requirement so anything extra not required by law is on you. Only thing I agree with you on is price of 2014 New Tractor. Anyway look at it this way. There are O/O's out there. So if they can make it I believe anyone can. Just have to be willing to learn and work at it. Not going to fall on our laps. I wish you and I good luck on this journey.
     
    double yellow Thanks this.
  9. double yellow

    double yellow Road Train Member

    5,946
    10,065
    Aug 28, 2011
    State of Jefferson
    0

    Which ones? Please enlighten me as there is only so much I can see without jumping in and actually doing it. I am trying to be conservative/pessimistic, particularly with maintenance/repair costs, so I'm not unpleasantly surprised down the road.


    Not required, but failing to have it would result in a $400-$900 tax for a single person earning 40,000-90,000/year ( http://obamacarefacts.com/obamacare-individual-mandate.php ). Workman's comp is optional as the single employee and frankly I wouldn't pay 10K/year for personal coverage, but that coverage is something I currently have (along with medical benefits) as a company driver. So I am partly comparing being a company driver to going o/o and the "freedom" isn't worth going from over 60K/year w/ benefits, to 40K/year w/benefits (or 53k/year w/o benefits). Granted years 4, 5, 6 will be much better since the truck will have been paid off (and have some residual value).
     
    GITRDUN45 Thanks this.
  10. daf105paccar

    daf105paccar Road Train Member

    6,564
    7,293
    Apr 15, 2012
    0
    I think your maintenance on the new tractor is too high.
    And did you calculated any tax deductions because off higher investment?(old vs new tractor)
     
    double yellow Thanks this.
  11. Ridgeline

    Ridgeline Road Train Member

    21,058
    103,687
    Dec 18, 2011
    Michigan
    0
    I think your 2002 tractor will need an inframe and a tranny/clutch work - $5k won't cover that.

    Also an LLC would not work if you are driving. I would get a hold of a good accountant who can give you a plan to reduce your taxes as much as possible.
     
    double yellow Thanks this.
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