Developing the business plan

[geo956]

Hello to all....
I am in the process of developing a business plan to see if it makes sense for me to transfer my sweat and effort into expediting. I recognize the talent and experience that is out there on this forum and I wanted to ask several questions to make sure I am not in fantasyland (where the colors are always brighter)as to my plan. So here goes....and thanks in advance:

My plan: solo, straight truck (class 8).

My questions...for SOLO only
1) What is the avg high and low miles per month (please specify loaded or total) can I realistically expect? I am thinking 8800 low and 11,000 high total miles. Please temper this with reality.

2) What gross dollars are being achieved and at what sorts of miles? This may or

3) FSC...what are averages that you see? I am planning on using ($per gal-$1.10)/ mpg...in my example = $0.21 cpm. Is this reasonable?

4) I understand that Conway and Express1 would be good for a solo but are there any other suggestions for companies to look at?

5) I am projecting $0.72 cpm for my costs. My projections are below and are based on 8800 miles per month. Pay: $1.15-$1.20 with FSC=.

FIXED (per month)
Truck Payment $0 (will pay cash for truck...~$90K)
Licensing/Permits $170
Fed Highway Tax $46
Collision/PD Insurance $300
Bobtail Insurance $80
Health $450
Retirement $0
Office $100
Phone/fax $250
APU (pay over 5yrs) $100
Legal/tax $100

Total Fixed $1,596

VARIABLE (per month)
Broker $0
Fuel $2,992 (mi/8.5mpg)x $2.89
Road/Fuel Taxes $132
PM $100
Maintenance/repairs(escrow) $528
Tires tractor $176
Tires Trailer $0
Liability/Cargo $0
Tolls/scales/other on-road $200
New truck(escrow) $600

Total Variable $4,728
Total Fixed+Variable $6,324
CPM $0.72

 

[LDB]

I run my spreadsheet based on 8k monthly miles. The cpm goes down as the miles go up as you undoubtedly know. By forecasting at the low end I know that if it shows profit it can only be better if more miles come my way. My experience so far has been deadhead of about 17% of the loaded miles. I don't count personal miles in my calculations because those are solely my choice.

Your plan to pay for the truck and then escrow to yourself for the next truck is an excellent idea. I didn't run the numbers but it sounds like you have the escrow amount set so that plus the trade value of the current truck will cover the next truck.

Your preparation sounds solid and reasonable. I think you may have a few items estimated just a little bit high. I purposely do in mine. It's another layer of cushion that I know will help me in the slow times. Good luck to you.

Leo Bricker
OOIDA 677319
truck 4958
73's K5LDB
Support the entire Constitution, not just the parts you like.

 

[geo956]

Thanks for your reply Leo. I value yours and all drivers who have "been down that road" already!!

Another question: how many "days away from home" do you average to meet an 8,000 mi/mo average? I understand this would be a rough guess but I am not too sure about the number of days spent waiting on loads to meet these miles/month figures. Thanks again.

 

[LDB]

I live outside Houston so it's a long run from the freight zones. Because of that I'll go out a month and home a week. If I lived along I75 in Ohio I'd probably go out 7-10 days and home 2-3 days. Home location plays the biggest part in time out and time home, at least as I see it.

Leo Bricker
OOIDA 677319
truck 4958
73's K5LDB
Support the entire Constitution, not just the parts you like.

 

[DoughBoy]

geo956, I am not a driver YET but am in the process of building my own business plan, What I see in yours looks good except, I dont see where the driver (You) are being paid per mile.

The way I see it, If you don't pay yourself per mile, you are actually cheating yourself in the long run. You have bills to pay at home that are not noted in your plan. How do they get paid (off of your CPM).

Bottom line. If you dont add a CPM for the driver, then your taking it out of your NET income. By adding it to your business plan you will see that insteed of .72 cpm to move your rig, It would be more like 1.10 cpm giving you a more realistic annual, monthy, and weekly net. This will also help you to decide whether to take that a load or not.

Just my 2cents. Hope it make sence.

Doug

 

[geo956]

Doug, that is a very good point you make and I will add driver costs into my business plan spreadsheet. An important reason is that if you are down for injury or extended illness and have to put a driver into the seat then you would need to know that the business could survive even with driver pay added in. So good point and thanks!

 

[ClassicOne]

what about down time expenses? idle time? i find as a team we average about 6 hours down everyday..as a solo i averaged 3.4 trips a week so it added more down time. will 8.5 mpg reflect real fuel usage? our apu on avg uses 8 gal per 24hr if your down 3 days a week and use your apu like we use ours it adds up fast.
other costs look inline...not sure you'll pay the fed highway unless your tt and not straight truck.
we team with conway. avg gross yrly 165-200 understand solo's avg 90-120
we avg yrly dh/layover 16-18% personal avg 5% traveled 195K to gross 165K first year. have been more aggressive in reducing dh lately.
as a team (w/wife) we don't go home much.. out 18 mo before first home time it WAS our choice though. home is a boat and we put it on the hard when we started truckin...
as a solo.. i might look for a premium priced carrier to max income per mile. maybe an overflow carrier that picks up the excess of the big boys so you can get max $$per mile for time spent actually driving. we don't avg BIG $ per mile..but over the long haul we are moving way more than most teams we talk to. I like to keep moving and have found conway great at locating runs for us...and they are getting even better. and conway pays truck rate even if your picking up van loads.

 

[ClassicOne]

conway 1.15 per mile "D" truck flat rate. as of today fsc 16.7% fsc is variable depending on customers contract. there are access pay for NE etc. but i don't figure them (just offsets added costs)

mileages for solo avg less.. more like 6-9k mo find your breakpoint. new HOS may figure into mo mileages next month.

maint escrow seems high to me for new truck. in 3 yr old truck maint cost could be that high would be more like it. but, extra in account invested...could be good call.

income taxes looks light, but with depreciation application you may be right on.

my insurance,permits etc runs less

 

[geo956]

ClasicOne.... thanks for your detailed and informative reply(s). I did not incorporate downtime costs into the spreadsheet and should. Living expenses and additional APU fuel need to be incorporated and add up to on road expenses.

Does your avg gross yearly number include FSC revenue? Also my understanding for "percent" FSC calculations; it is usually the percent (16.7) times a national freight rate (typ:$1.85). In your example it would be ($1.85)x(16.7%)=.308 cpm. Is this accurate? Seems high for a cpm FSC compared to the other way to calculate which is FSC=(todays fuel$-$1.25)/mpg. So that figure would be: ($2.85-1.25)/8.5=.19cpm. Am I looking at these two systems correctly? If so I like the % method... How "variable" do you find the Conway FSC to be?

In my conversations with Conway recruiting, they have given me "average" monthly miles of 8.8K-10.5K for a solo. Based on what your real life estimates are I should assume the recruiting figures represent a "sunny side" optomistic view...or, perhaps what I would see during the busy months only.

As for my figures, I want to be conservative so that my surprises will be to the positive side. I also plan to keep a close ear to the ground to see how the new HOS rules affect everyone.

I am also sending a pm to you.