What am I forgetting or overlooking ? I got an excel spreadsheet that a friend of mine uses for his hotshot business so I've adjusted that for my use.

Ive got truck payments, fuel on anticipated miles, maintenance / repairs 10k, tires 6k, non trucking insurance 2k per year, work comp 150 month per driver, cpa 3k per year, non covered tolls 1k, road taxes and misc fees 2k, phone / internet 750, plates 2k, wages per driver for 2 drivers ( this will be for a team), permits 1200., my fax 1000,truck washes 1k, unanticipated expenses 2k. Basically I came up with .94per mile on all miles is what it will cost me to do business. Does this sound correct? Or is it low or high? Some of the numbers I plugged into the slots also seem a little high - better to be over than under.


Whats your thoughts on this tractor -

06 Volvo 670 double bunk with 230k comes with a 2yr or 200k warr. so about 9 months worth of warr. Should be able to hammer out a deal for 34k. I plan on putting 10k down and finance the balance. This would leave me with a 25k cash reserve fund.

Ive spoke with a handful of trucking companies I my local area and it seems freight is on the rise. One last question before the flamming begins - If you are contracted under a lease (owner leased to the trucking company) and you break down under load how is that handled - I would guess it would be my responsibility to make arrangements for a rental / lease truck.

Thanks in advance - Todd

 

Don't know of any state where work comp is only 150.00 a month.( unless you pay the driver by 1099 and buy dis-ability insurance.)

 

Actually that number came from a recent post on here about Occupational Accident Policy through OODIA.

 

That's for O/O not employees. Comp is a percentage of the payroll as is FICA,medicare,and un employment.
Unless you try to call them sub contractors.

 

Good thing I'm asking for a little help. Do you have a ball park idea on comp for a driver? I know when I had my carpentry contracting company a few years ago it was pretty high for comp without any incidents. I would really prefer to pay the other driver as an employee instead of a 1099 contractor. It never seems to work out fair to the sub contractor.

Thanks - Todd

 

If you're out of wisconsin the base rate is 11.9%.(50,000.00 in wages and the comp is 5950.00) You will most likely have to start out in the pool of insurers. If you can get it on your own the rate will drop each year per your experience modification.

 

I usually put base plates and permits together. I would allow $1,600-2,200 for both. The way it was phrased it seemed that your payments, maintenance, etc., was around $10,000/year. That may be low, depending on your truck payment. I prefer to keep payments separate from maintenance. Oil changes can run from $169-350. I change my oil around 15,000 miles. I would allow an average cost of $250 per change.

Some cell phone companies are running some good discounts right now. I pay about $100/month for my cell phone service including taxes. My air card runs about $65/month with taxes. If you plan on having an office phone that should run around $100/month. If you lease to a carrier you won't need a dedicated office phone. You should be able to find an internet fax service for about $10/month. I would suggest being able to send and receive faxes from your truck, if you plan on driving yourself. Truck stops can charge from $1-3/per page for faxes.

Some states will allow you to have an occupational accident policy instead of workers comp as long as you don't have more than a certain number of employees. That is 5 in my state. You can find a policy for about $140-150/month per driver. You also didn't mention how you plan on paying your drivers. I have always paid on percentage, but some pay mileage. You need to decide how you will pay your drivers and include that as a separate cost. If you will provide insurance or other benefits you should also include those costs. I think your over all cost per mile is low. Fuel alone can run $0.50-0.60/mile with current fuel prices. If you lease to a carrier they may have a fuel discount program which could keep fuel costs lower. I rarely take toll roads, but if you plan on running the northeast much your toll charges may be low. You can spend $100-200 going in and out of New York, depending on your route. I always recommend calculating costs high and revenue low.

We have broken these costs down on several occasions. You may be able to do a search and find some of the previous threads. I would allow $0.025/mile for pm's or oil changes. $0.05/mile for tires. I normally base my cost estimates on running 10,000 miles. That may be a little high with the current economy, but is usually a good base.

If you have a breakdown it is your responsibility to have it fixed. Some carriers will assist you in finding a repair shop or wrecker, but it is your responsibility to pay the bill. Some carriers have discount programs for tires and repairs. I would try to do as much of my own work as possible. Preventative maintenance will save money on the road. If you breakdown while under a load the carrier may re-power it with another team. If not then you can always rent a truck. However, some companies won't rent a truck to an owner operator. That is something that you may want to check out just in case it is needed. Most repairs should not tie your truck up for more than a day or so. Deliveries can usually be rescheduled. Another thing that I would suggest is to keep a spare tire on your truck. It will be much less costly than buying one on the road. I was quoted $599 for a Bridgestone tire from Petro the other day without any national account discount. I can buy 2 tires for less than that amount locally. Truck stops can charge $175-225 for a used tire plus labor to put it on the truck.

It sounds like you plan on buying a truck and putting drivers in it. I would suggest that you drive the truck yourself before taking that step. It is very difficult to make money with a single truck if you have to put a driver in it, especially with current rates. While freight is up slightly, rates are still pretty flat. Most of us are still doing a lot of dead-heading.

 

I'm registered in 40 states and have not found any that allow an occupational insurance policy on a W2 wage earner. Of course when you 1099 them you can get away with that.
I suppose you don't have to pay UMC,FICA or medicare also.

 

It doesn't make any difference where you run but where you base your business. I was told that in my state that I could use an occupational accident policy as long as I didn't exceed a certain number of employees. If you 1099 them then it is a non issue. You can check with your local state or call OOIDA to check the laws in your state. Someone told me once that North Carolina required you to participate in their workers comp and would not allow an accident policy. I had another owner to tell me that he didn't have to go with the workers comp and could get an occupational accident policy. There are some states that are so cash strapped that they are looking into forcing all of us to purchase their workers comp. The accident policy basically does the same thing as workers comp but at a much lower cost. It is usually much easier to file a claim so I have been told.

 

Hey GMAN -

I'm glad you jumped in! There are alot of very good points that you made. Right now I am at the fine tuning of the numbers to get a real idea of costs and profit. As far as the drivers go a very good friend of mine and I will be driving the truck. He has several years of incident free miles. We also have worked together in the past. I will re-crunch some numbers and make a few more phone calls. I had figured 7000k per year in truck payments and 10k per year in maintenance / repairs plus the tires.

But better to know now what it will cost than finding out later

Thanks - Todd