How do my preliminary business plan numbers look?

double yellow · Dec 3, 2013

G/MAN said: ↑

I will just ofer a few observations.
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Thanks!

Your maintenance costs seem to be high unless you are putting money into a maintenance fund.
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What rules of thumb would you use for a 2002 of unknown maintenance history, a 2010 fleet maintained, and a new 2014? My plan would be to keep whatever I bought indefinitely so I would want everything to be very well-maintained. Any additional money in that "fund" would probably be spent of modifications I believed would ultimately lower costs (eg fuel economy)

Base plates and permits should run less than $2,500. In fact, it could run less than $2,000.
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I'm going off that blog posted earlier ( http://higb7.blogspot.com/):

Cab card: 2793
Heavy Highway Use Tax: 889
IFTA: 705
License and permits: 109
Taxes: 300

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4807

However, it appears that guy went through 2 trucks in the year, so that probably is high.

Your insurance costs may be high. Liability and cargo insurance should be the same, regardless of which truck you decide to purchase. Comprehensive or collision insurance usually runs 2 1/2-5% of the stated value of the equipment.
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Good info, thanks. I really need to shop around and use actual numbers -- it just seems most companies don't do online quotes like car insurance and I hate to waste someone's time when I'm not ready to pull the trigger right this very second.

You should not need workers comp, but may want to get an occupational accident policy. OOIDA and a few others have good policies for about $140-150/month.
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Bad Bill mentioned that too. So far it looks like Occupational accident policies are geared towards the business owner rather than the driver, and though I'd be both, I'd really be concerned about a slip/fall at a fuel island when not under their definition of "dispatch."

Another o/o I talked with suggested looking into disability insurance and/or aflac wage replacement...

Like I mentioned before, I would not pay $10,000/year for worker's comp -- but it is coverage I currently have as a company driver so I think it is important to see what you're giving up...

From your costs I assume you plan on running under your own authority. If you lease to a carrier your operating costs should be less.
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I do plan on running under my own authority. I might consider leasing onto a carrier provided I got to use my (or at least the same) trailer, run paper logs, and the total compensation -including benefits- is reasonable for the additional risks when compared to company driver at a decent company (eg not the 10% Higb is giving away to MAG for their doing his IFTA filings & factoring)

At one time we broke down some of the operating costs and it was put on a sticky. It might help you to check out those numbers.
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I'm slowly making my way through the stickies and have seen an excel spread sheet mentioned. However the forum asked for a password to continue to that link...

paul 1052 · Dec 3, 2013

Your maintainance cost will pay for an inframe every year, looks pretty high to me unless you're planning for a lot of EGR related problems.

G/MAN · Dec 3, 2013

double yellow said: ↑

Thanks!

What rules of thumb would you use for a 2002 of unknown maintenance history, a 2010 fleet maintained, and a new 2014? My plan would be to keep whatever I bought indefinitely so I would want everything to be very well-maintained. Any additional money in that "fund" would probably be spent of modifications I believed would ultimately lower costs (eg fuel economy)

I usually recommend that new owners put back $0.08-0.15/mile for maintenance. Since we are usually paid on mileage, it is easier to break down costs by the mile. For instance, It is a good idea to build up your maintenance fund to the point where you can pay for the most expensive repair, which is usually n inframe. That can cost from $10,000-20,000, depending on the engine and what needs to be repaired. I know one owner who uses his maintenance fund to purchase his next truck. The older the truck the more you are likely to spend on maintenance. The most that I have spent on one truck in a single year has been a little over $11,000. That has been unusual for me to spend that much in a year. Most of that cost was due to a truck losing transmission and having to be towed. I have always changed oil in my trucks around 15,000 miles. An oil change/pm can run from $250-350. That breaks down to about $0.025/mile. I usually estimate tires at about $0.05/mile. Those are regular maintenance items. A tire can blow at any time but this is a good estimate.

I'm going off that blog posted earlier ( http://higb7.blogspot.com/):

Cab card: 2793
Heavy Highway Use Tax: 889
IFTA: 705
License and permits: 109
Taxes: 300

------
4807

However, it appears that guy went through 2 trucks in the year, so that probably is high.

Those figures are way off for a single truck. This year I paid the most that I have ever paid for my base plate, a little over $2,200. Your UCR fee for one truck is $76 this year. Unless you purchase the New York HUT or New Mexico WDT, that is about all you should need to pay for base plates and permits. If you include those, you are talking about less than an additional $100. The 2290 (Heavy Highway Tax) is $550/year for each truck. It is pro rated from July and could be less, depending on when you pay the tax. I have rarely paid more than $25/quarter, per truck, for IFTA taxes. I am not sure what the taxes and licensing costs are that you posted.

Good info, thanks. I really need to shop around and use actual numbers -- it just seems most companies don't do online quotes like car insurance and I hate to waste someone's time when I'm not ready to pull the trigger right this very second.

Insurance agents are in business to write quotes and sell insurance. You cannot make an accurate business plan or do projections without having real numbers. I have known some who have had to pay $12,000 for cargo and liability insurance when they first start out. Others have paid around $7,000. That is a huge spread. A number of factors are used to determine rates, such as experience, time as an owner operator, mvr and credit. You need accurate numbers. Quotes are usually valid for 30 days. Unless you are not planning on proceeding with your authority, you are not wasting their time.

Bad Bill mentioned that too. So far it looks like Occupational accident policies are geared towards the business owner rather than the driver, and though I'd be both, I'd really be concerned about a slip/fall at a fuel island when not under their definition of "dispatch."

Another o/o I talked with suggested looking into disability insurance and/or aflac wage replacement...

Like I mentioned before, I would not pay $10,000/year for worker's comp -- but it is coverage I currently have as a company driver so I think it is important to see what you're giving up...

An occupational accident policy pays for any work related accident. It doesn't make any difference if you are under dispatch or not. I once had a driver who had an occupational accident policy. He slipped and fell from the trailer as he was preparing to hook up the first day he started. He broke a couple of ribs. His occupational accident policy paid for everything, just as it would with workers comp. I think it is easier to file and collect from an occupational accident policy than workers comp and the cost is usually much less. An occupational accident pays for X-rays, doctor visits and lost income, if you are injured to the point of having to be off work. Neither will replace all of your income, but it will pay several hundred dollars per week for lost income. I think OOIDA has a couple of different policies. The rate depends on how much income you wish to replace and the lifetime benefit. I have looked at other occupational accident policies and most are very similar. The main difference, as I recall, is how much you want to pay for lost income. Even if you decide to lease to a carrier, you will need either workers comp or an occupational accident policy.

I do plan on running under my own authority. I might consider leasing onto a carrier provided I got to use my (or at least the same) trailer, run paper logs, and the total compensation -including benefits- is reasonable for the additional risks when compared to company driver at a decent company (eg not the 10% Higb is giving away to MAG for their doing his IFTA filings & factoring)

I'm slowly making my way through the stickies and have seen an excel spread sheet mentioned. However the forum asked for a password to continue to that link...
Click to expand...

There are advantages to leasing to a carrier rather than running your own authority. You will save the cost of buying cargo and liability insurance when you lease to a carrier. You will need bobtail or unladen liability if you lease to a carrier, but won't need it if you run your own authority. A carrier may finance or furnish your base plates and permits. Most charge a fee for this, but they usually deduct a flat amount from each settlement. When you run your own authority you pay for all expenses up front out of your pocket. Carrier's don't provide benefits to owner operators. You are in business for yourself when you own a truck. You pay for everything. The carrier pays for cargo and liability insurance. They also find freight for you to haul, usually provide a fuel card with discounts at certain truck stops, file your IFTA, and will usually advance money on loads once they are on your truck. Most carriers will pay you weekly, whether they are paid or not.

Running your authority does require more initiative and commitment. You will be responsible for everything and all expenses. Some people are more comfortable leasing to a carrier and others are more comfortable running under their own authority. You need to decide which works best for you. Unless you are a very self reliant person with a lot of initiative, you may be better off leasing to another carrier. If you are a self starter and like running your own show, then you may be more comfortable operating under your own authority.

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