Monthly maintenance budget

Ok, I looked over your spread sheet, you are already putting away 1000 per month towards next truck etc. So there is that.

Your trailer maintance seems a touch excessive. If you do not spend any of the 2250 a month on a slow 9K or less miles per month, use what you need of that to pay the driver and to keep the business from incurring a loss.

I see approximately a fixed cost with a increase of roughly 2300 dollars more between the 9000 mile month to that of a 11K mile month.

670 or so more in fuel, 500 more in trailer maintaince. The taxes is logical and so is everything else.

But pray tell what in the world are you doing throwing down almost 3 grand for trailer maintaince? If you are only tossing 1000 towards tractor replacement?

Forget the 20K miles Unless you have a team and can pay to the truck with a H&W Team.

I have a suggestion, Put the 1500 towards both tractor and trailer and use the 1500 to 2000 extra dollars that you would have otherwise put on the trailer as operating capitol with the intent to create a new spreadsheet entry called "rainy day" so that whatever you put into this line hopefully 1500 to 2000 per month will build up pretty significantly over a few months. By the end of say this year, you should understand that you now area a few months ahead of your expected monthly expenses even if you ran zero miles for a month or two.

To me that is a citadel of solvency of a business, the difference between thriving and having something to fall back on versus nothing at all.

I hope my ramblings have helped a little bit. Forget the post I made about 5 grand a month that's a fantasy with this spreadsheet. If you were running 20 or more trucks sure. But not with one.

Also consider a percentage pay system rather than mileage pay. Truck makes revenue driver makes something. Regardless of miles. And maybe just maybe if the percentage is chosen carefully you will still make a profit without having to count miles all the time to the driver which may or may not be accurate. If I did 3000 miles to Jersey from LA and you recieved 3.00 a mile for that run it's going to be a nicer payday for me but you would have a pretty good revenue for that week, almost 6000 dollars to you after cutting the driver a 3K check before taxes.

 

7.5 is reaching just a little bit too close to the sun. Remember what happened to the Mythical Wings that fell off the one who tried it. Maybe 6 miles to gallon is much more reasonable. In the Mountains it becomes a 20 gallon to 30 per hour burnt until you get over the summit. In winter not so much because you are going pretty slowly anyhow. The more horse you can purchase say 550 to 650, you will actually require less fuel per mile to do the same work rather than a poor wrung out kitty cat with only a 350 starving for fuel all the time. (I had one once. And that was all I did all day fuel that thing two or three times on a single 140 gallon tank. Never, ever again.)

You will want to create a fund for between 1.75 a mile and up. if someone handed you a load at 3.00 or whatever, that percentage pay you are thinking of will be in your drivers favor not yours. It will still pay LA to Jersey that 7800 or so gross to you but you will be handing the driver thousands for the week in percentage. I hope he's worth it.

The different between your 1.75 and 3.00 figuratively in this scenario has to go into the rainy day fund slot. So that it can be considered overflow above your 1.75 and kept against a truly bad day. You know already you can spend a million dollars in trucking really easily. Let's try to corral some of it in the rainy day fund.

At some point in about a year you are going to be feeling flush and rich. Don't do anything rash. You are just getting started to feel what prosperity truly is. If that is the Blessing upon you, your employees and the company then by all means celebrate. Over dinner or something. Then get back out there lol.

Im not a company, I was one for a very short time and frankly Im happy I did not get too deep into it. It was not that time for me to do that.

I hope some of my random wandering thoughts helped you a little bit. It's still your company, your money. Your ###. Not mine. Be careful out there.

 

Why do you guys always use pump prices when you are figuring this out?

It doesn't reflect reality.

Use pump plus 20% to cover the variable costs of fuel.

Once you have the truck moving you can adjust it to a lower figure that reflects the padding you need for future increases and lower mileages that the truck will get.

 

It's all I have to figure it out. If there is some kind of super duper secret fleet account discount price, Im all ears.

Gas Buddy makes a good job of pricing fuel of all kinds around the USA. There is a spread in pricing.

I remember the old days where truckers installed 600 to 800 gallons of fuel and a third axle on the tractor so they can pick any of the 48 states or freaking canada against the exhange rate and fuel one time and just go. Not worry bout the higher fuel costs in say Jersey.

If you are able to teach me or expose me to this reality of actual fleet fuel discounted price, Im more than happy to learn.

 

The point is made for planning, this is what he is trying to do, so you plan not on the present prices on the pump but what the highest price you can afford to run without adjusting everything up or down at a given rate.

The problem I ran across a long time ago is the volatility of the prices are so unpredictable that if you use say $2.53 and then we get a spike up to $4, would you be able to increase your BEP to get the best balance out of your ledger or will you have to eat the cost increases for the next week or two.

He is at fixed rates, which the increase in fuel is needed to balance it out.

What I've done is with the little program the drivers use to determine costs per mile on the fly so to decide what offers to accept is to take the last fill up, use that for the baseline and add 4% onto it as the variable cost in replacement fuel going forward (there is a bit more than that for the formula which I won't discuss). I know it gets confusing but it seems to work better than taking the month prior and trying to average it out then adding that into the variable costs. What this has done is actually increased the revenue by 3%, why?

I have no clue but when we stopped it, revenue dropped, put it back it went back up by 3%.

 

Residual Value of the truck once it's served its purpose also should be factored in towards its replacement.

 

I bought my truck at about the same mileage and added about 400K to it in the last 3 years, which resulted in a total maintenance of about 20K per year the last time I checked (all: Repairs, PMs, Tires, Truck washes,..., Air refreshes). 2.5 a month is very generous; once the figure of 20K is reached on the business account, I would relax a little.

 

Fixed rate is good, if you can get it over time.

If it's lower than retail, then that savings should be piled up somewhere quiet and not be touched... much.