Leasing at Prime

As the wife and chief financial officer of a truck driver, I will say that going company for a year (or more) to learn the business of trucking is the best advice that you have been given. Learning how to *efficiently* drive a truck on someone else's dime, all the while running a "shadow" business is an effective investment. You can request the linehaul numbers from your FM, especially if you explain why you want the numbers. They are quite happy to give you them. Keep in mind, that company numbers are *slightly* lower than the IC numbers (in our experience, and I believe IP's as well) due to the nature of the loads that are given to the company guys.

Run all the numbers, include all the repair work, hotel stays, PMs, that happen while you are out. Use pump costs for your fuel costs. It's always better to over estimate your costs than to jump in and realize you underestimated how much you need to for something you need to actually move your truck down the road. Do this for a full freight cycle (a year). Keep in mind that there are cycles within cycles. Talk to lots of drivers. You will hear that no one can make it as lease, you will hear that they have no idea how a company guy makes it on so "little." You will hear that company guys are ripped off. You will hear that L/Os are ripped off. You will hear that company guys have it made. You will hear that the L/Os are given the gravy loads, the crap loads. Ask how they run their business. Do they treat that settlement check as a paycheck on steroids, or do they have some kind of business plan. (Even a plan on a napkin is a plan. Not necessarily a good one, but it is better than no plan at all.)

When making OUR choices, I ran numbers until I saw them in my sleep (no joke). For Prime company, for Prime L/O. For other companies, based on real numbers from real drivers. In the end, medical issues limited our choices, BUT we made the best choice we could under the circumstances. And we have never regretted that choice. We do NOT regret the year he spent at Prime, learning how to drive a truck (something he continues to do). And I don't mean just throw it in gear, and move forward. Repair bills are......heart palpitation inducing until you remember you have money set aside for these things.

I've run a business in the past, too. It prepared me on the business side of things. That's my part in this whole thing. I keep an eye on that part. He makes sure that the freight gets where it is supposed to go, when it is supposed to get there. We've taken a hit here and there, to help out in a pinch. And *we* have been appropriately compensated, one way or another.

Obviously, if it just you and your truck, you get the fun of doing it all yourself. Don't let the paperwork stack up. If it looks gnarly at the end of the day, it looks a LOT more gnarly when you have a month or a quarter or a year's worth of trip sheets and receipts to go through. Staying on top of it lets you know where you stand right this minute.

 

DragonTamerBrat a VERY GOOD POST and a lot of lease wanabees should read it and follow it and there would be less BOO HOO POOR ME postings .

 

Hi BK.... What ironpony and others have said will help you in becoming a O/O or LP..

First learn about the trucking side before becoming an Owner Operator or lease Purchase, and that takes time..

By owning a business before, you know about keeping good records and setting goals, but each business has
it's own learning curve in how to stay profitable and costs associated with that business..

The trucking side is a lot more than just learning how to drive a big rig, especially if you want to become a LP or OO..

Driving a truck in year-round conditions, knowing how to detect problems with your truck and do minor repairs, shippers/receivers even take time to learn.. shipping lanes to keep you profitable and when to go into and stay out of areas take time.. Know how the load board works and when to refuse freight if it doesn't meet your
business plan..

All of the above usually takes couple years to get comfortable with and even then, still lots to learn..
Good luck on your new adventure in trucking..

 

If that other thread is any indication, all your advice will be ignored.

 

Normally is, then they go bust and blame it on Prime LOL.

 

I didn't ask for opinions on my situation, I asked a few questions about leasing. What exactly is the problem?

I appreciate any and all advice that is genuine, and will consider it all, but that doesn't mean I will do whatever I am told. I have many reasons for the things that I do and haven't necessarily expressed them all here, nor do I care to.

Please give IP his thread back and feel free to PM me if you'd like to discuss anything further. thanks.

 

I am in the process of researching all the various costs involved via a shadow company, as has been suggested here several times, and am doing so using a spreadsheet I designed through OpenOffice Calc, a freeware spreadsheet that rivals Excel. I believe the file type can be opened in LibreOffice Calc, as well, though Excel does not understand the formatting very well and opening the file with MS products renders it inoperable.

Anyhow, I figured that I would share my template here if the forums will let me attach it, and anybody can use it. It is pretty basic, with no cells locked, and it can be customized and altered a bit, if you know what you're doing.

It functions much as you would expect. Enter your monetary amounts in the appropriate empty cells, as well as identifying information, and it calculates several things for you at the bottom: cost per mile, revenue per mile (not profit per mile), total miles, total revenue, total expenses, and final profit. Additionally, it allows for you to set a CPM for yourself and automatically remove payroll from the profit line. I have it set at a default $0.15 per mile, as though it were a cheap mega-carrier, paying team miles.

There are seven trip sheets in the template, and a weekly totals sheet which automatically populates based on the information you entered in the individual trip sheets, sans a few key bits of information you'll need to add manually to properly calculate revenue and expenses. Ultimately, it will give you a basic insight into your business, and I hope you'll find it useful.

One final note, I haven't put together a monthly total sheet template yet, so a calculator is your friend.

EDIT: The forums won't accept a *.ods file as an attachment, so anybody who is interested in grabbing a copy, feel free to PM me with your email address, and I'll send a copy over. In the meantime, I've uploaded a PDF export so you can see what it looks like.

 

A couple things in response to your suggestion:

I didn't intend an emphasis on per-mile costs, I only added it as a personal reference tool, though that may have been influenced by my reading of other non-Prime programs, where per mile earnings were more important to keep track of.

I wrote this spreadsheet with genericism in mind, without such things as escrow accounts and the like. Your weekly status costs are input on the final sheet, because having them on all sheets is unwieldy and cluttering.

That being said, after using it a bit, I have found a few shortcomings, and am writing a second, more comprehensive version with a few things I missed, such as scale house charges and the like.

To be fair, though, I wrote it with a different business model in mind- it is for my plan to bring in a third party truck and lease on. The overall profit in the last total slot on each page is bank fodder. The payroll in the yellow lines are deducted as expenses before the final tally, allowing me to see post-payroll revenue, while at the same time actually calculating a CPM payout rather than the flat salary I intend to use.

All bank fodder is there for tires, PMs, etc. inputting them on the trip you spend it on deducts them from the earnings total, because I like seeing how much was made and spent during that period, regardless of where the money is coming from. I like to count it against that week's income, so I designed it that way.

Since all non payroll earnings are banked, it'll still add up properly- although the potential for negative income exists if something major happens.

I'll put up my revised version in a few days, once I am happy with it.