Owner Operator Total Costs Budget

I could use some help trying to put togather a reasonable, projected budget for someone signing onto landstar as a flatbed owner operator. I'm not sure about the insurance costs, permits, ect...

Any opinion is valued and the more specific you are in critique the better the model will reflect the "real world" so please... fire away... to high, to low, forgot this, don't need that, and a reason why you think so.

also... wow!!! now I know why some guys say they won't pull for under 2 a mile... they can't !!!

Click on link to view budget:


Spread sheet in excel
http://base.google.com/base/a/1327560/D12877425929550194024

spread sheet word document
http://base.google.com/base/a/1327560/D4202950577416375654

 

As it was explained to me, the prices on the load board include fuel surcharges. So it is included though not broken out separately which would give you a slight mathmatical advantage over 73% of the posted rate. The income number used reflects $1.48 per paid mile. I borrowed this number from "broncrider" and his experiences with another company. It may not be a reasonable average to the truck for Landstar but until sombody posts differently it is a "best guess" only.

10k??? and I thought $7500 was over already... ouch.

The repair fund was set low because the trucks I have considered all come with power and drivetrain warranty. Additionally, there is a profit margin (.19 cpm) which would be available for repairs. It after all isn't profit until the year is over and you haven't spent it.

Thank you for time and input, its appreciated.

 

Congratulations on having a business plan. You have now crossed a major hurdle.


You have wages figured at $.31/mile. If you drove for $.24/ mile your cost would be $.31/mile. The difference is payroll loading which covers social security, FICA, medical, holiday pay etc. Payroll loading typically runs 30%-35%. If you are willing to run for $.24/mile I have a job for you.
I can live quite comfortably on $24,000 annually. This isn’t my first rodeo. I’ve had other businesses and been self employed most of my life, so I know what I need to earn to meet personal expenses. To get a business started I will of course work for minimum wage counting on equity making up the difference later which is forecast at the bottom of the page headed earnings.

No, I won’t quit my current job, paying very good money, to go work for you. You must have me confused with Jose, who will likely run us all out of business soon enough.

You have added nothing for administrative costs. This covers phone, computer, pen, paper, fax machine, copier, etc.
I already own these things and don’t plan on buying new ones. My cell service is already nation wide unlimited, though I would of course turn this in as a business expense and start taking the credit on it instead of paying it out of my pocket as I do now.

Are tires included in your maintenance costs? Oil changes?
Tires and oil changes are included in the .05 cpm maintenance allotment. Initially, first time, all new synthetics and filters would be covered under capital investment portion on delivery of the truck. Subsequent maintenance, new filter at 25k “B” service and filter and fluid at the 50k “A” service would come from the maintenance fund along with tires. I am however expecting a large portion of the “first year” maintenance fund to go unused the first year and carried over to subsequent years when tires actually start to need replacement from wear.

My costs last year were $1.67. I only ran 75,000 miles so my fixed costs were higher than what yours would be.
Variable costs change with mileage. Your actual fixed costs do not change with the amount of miles driven, only the ratio. I included a per mile breakdown of fixed expenses only as an easy reference to the variable costs. Regardless of mileage the fixed will add up to the annual projection.

If your fixed expenses were annually higher than mine I’d be very interested in hearing what they were so that I could possibly adjust my model assuming we are comparing apples to apples. (Example) If your fixed expenses were higher because of financed engine work that would be covered under my warranty, then no adjustment is needed.

Are deadhead miles inluded in your mileage projections? If you are going to have 20% deadhead your rate per loaded mile must be increased by your variable costs.
I’d love to increase my rate per loaded mile : ) but since I can’t get away with that I denoted 100,000 paid miles and included an asterisk on the fuel expense, *2 based on 1.2 X paid miles X DOE fuel price / 6.5 MPG to arrive at a reasonable figure. I arrived at the 20% “deadhead” figuring route versus actual mileage plus actual deadhead miles.

My loaded miles paid $2.04, all miles $1.71. I had 43% dead head.

I’m not quite getting the math, above you said, My costs last year were $1.67. I only ran 75,000 miles <snip> My loaded miles paid $2.04, all miles $1.71.

Income $1.71 – 1.67 expenses = .04 cents ??? times 75,000 miles = $3000.00 to you??? Typo???

In any case thank you for the input and hope to hear from you soon.

 

I am driving somebody elses truck for double that right now. Actually if they kept me as busy as I'd like to be I'd be making triple that but I spend a lot of time waiting on the next load to be called in by a customer.

Regardless of how much the company pays me, I could be making more. I say this because they are able to pay my wages, pay the truck and still make a profit.

No matter how long I drive for them I will never own the truck or make the decisions. where's the equipment replacement??? There is a section at the bottom showing profit of 19K. This could be used for personal or company expenses or paying off the truck early/purchasing a new one when the time comes. Also, after the truck is paid off, those monthly payments can go towards replacement costs. The truck hopefully won't evaporate as the title changes hands.

Building equity, in my opinion, is more important to a start-up business than immediately trying to harvest profits. Another way of thinking about it: If I pay myself 48k I have to pay taxes on 48k, if I pay myself 24k I in effect owe no taxes whatsoever. the other money I could be taking, pays the truck off early, no taxes there either. As soon as the truck is paid off and depreciated, go buy another newer one. Continue this cycle for 7 years until you walk in and pay cash for a brand new truck. Now you are actually making money and going to have to give some to Uncle Sam. It's a different but similar model to buying a much older truck with no warranty and then paying for breakdowns as you go. Both models work for different people and both go bankrupt. The most common denominator of each model is the same. Paid themselves to much money and didn't save for the rainy day. This in my opinion is the root of 80% of failures especially when combined with don't wanna work I own the company I'm gonna stay home this week'ers. Ain't that a combo??? lol

don't plan on "not" using the maintenance fund...

I'm prepared to use it if needed but planning on in fact "not" using most of it. Stuff can happen, yes, but most everything should be covered under warranty. I am talking about purchasing a one or two year old truck with less than 200k on it. Trading it off around 550k. Stuff happens... but hopefully to the other guy...