[slacker]

Originally Posted by rank

How do you increase net profit by lowering your rates? Please don't say running more miles.

Is that so?
Trucker A buys new truck, runs 150,000 miles and banks $50,000.
Trucker B buys new truck, runs 50,000 miles and banks $40,000.

Who did better?

Let me see, hum,

1. pick loads that are on the outskirts of major cities to avoid city driving. You still have close access to big roads, but less stop and go. You could actually profit more on lower rate.

2. stay out of truckstops if you cannot control your spending

3. continually work to reduce "fixed" expenses.

4. have business budget (same as monitoring percentages)

Trucker A buys $130,000 truck and runs 150,000 miles
Trucker B buys $50,000 truck and runs less miles to make the same net, because potentially reduced "fixed" expenses.

The first thing any business does is control fixed expenses, and then work to reduce costs that may fluctuate due to sales. In other words, if your sales increase, so will your cost of doing business. You cannot always reduce these percentages as much as reducing fixed expenses.

In the automotive business, I found it "impossible" to ever spend as much money on repairs to a used car as the cost of buying a new car, including interest, and increased insurance premiums. You can have major repairs and never come close to a decent down payment and the cost of trading, not to mention getting beat out of your trade.

I believe it was GMAN that said you should consider a truck is just a "tool in your tool box", and I think that is the best advise anyone can hear. My wife reminds me of this about once a week and brings me back to reality. I dig the hood and lights as much as anyone, but I am determined to be profitable where I am. I figure if I can't do it now, more fixed expenses will just make it more risky.

I prefer SnapOn tools, but I started out with craftsman, to make enough money to by SnapOn. :wink:

Everyone wants to make quick money, but I've found (the hard way), it comes over time with strategy and planning.

To be profitable requires a great deal of self control, which is the thing that is the most difficult for me. :?

I'm preaching to myself, forgive me.....

jonboy

[Rev.Vassago]

Originally Posted by jonboy

Trucker A buys $130,000 truck and runs 150,000 miles
Trucker B buys $50,000 truck and runs less miles to make the same net, because potentially reduced "fixed" expenses.

Way to skirt the question.

Let's put it in another form that will make it harder for you to sidestep:

Trucker A buys a $50,000 truck, runs 150,000 miles, and banks $50,000.
Trucker B buys a $50,000 truck, runs 50,000 miles, and banks $40,000.

Who did better?

In the automotive business, I found it "impossible" to ever spend as much money on repairs to a used car as the cost of buying a new car, including interest, and increased insurance premiums. You can have major repairs and never come close to a decent down payment and the cost of trading, not to mention getting beat out of your trade.

Trucking isn't the automotive business.

Originally Posted by jonboy

I for one, have been inspired by what Steve has been able to accomplish in such a short time, and I hope he is able to share "the bottom line" with us at some point.
jonboy

I'm not sure what my bottom line will be come tax time this year. I've spent a large amount of money on things that were not really necessary like the Rigmaster, chrome and replacing parts that didn't need replacing but I just plain wanted new ones that looked nicer. Even though they can all be deducted from my taxes they were really all presents to myself.

I haven't paid any attention to details as far as what it's costing me to run the truck or analyzing the crap out of this business. My checking account has a sizable amount of money in it, my bills are paid and I can pretty much buy what I want.

Keep in mind fellas, I really have no bills, my kids are grown, no wife so I can live on a fraction of what someone like Rank needs.

[slacker]

Originally Posted by Rev.Vassago

Way to skirt the question.

Let's put it in another form that will make it harder for you to sidestep:

Trucker A buys a $50,000 truck, runs 150,000 miles, and banks $50,000.
Trucker B buys a $50,000 truck, runs 50,000 miles, and banks $40,000.

Who did better?.

Ok Rev, I'll break it down for you.

Considering both truckers have the same "fixed" expenses, since they both have a $50,000 truck, paid for or close to the same payment, then all other expenses would adjust according to gross income not necessarily mileage.

I assume you are trying to say the guy that runs 100,000 miles more will make more money, and with that big of a spread, it's a given.

My point was, the biggest savings would be on fixed expenses, and then after that, close scrutiny of variable expenses.

What if the guy that ran the 100,000 had an average of 1.25, and the 50,000 guy was able to get 2.00?

The guy with 100,000 has made more, or has he? It looks like $25,000 more, but is it? He may of grossed it, but does he still have it?

After you consider tired wear, depreciation of the truck, additional maintainence costs, and other factors, that could diminish some. Let's not forget costs to his family, or even costs at his home that have to be farmed out to others ie. minor plumbing repairs etc.

In the automotive business, I found it "impossible" to ever spend as much money on repairs to a used car as the cost of buying a new car, including interest, and increased insurance premiums. You can have major repairs and never come close to a decent down payment and the cost of trading, not to mention getting beat out of your trade.

Originally Posted by Rev.Vassago

Trucking isn't the automotive business.

Trucking is not the automotive business, and that was not my point, only an example.

My point was, I believe (my opinion), you cannot spend, unless you're retarded I guess, as much money on an old truck as the cost of buying a new one.

Having said that, if you just ignored the old truck and did no preventative maintainence, your breakdowns could cost you more in loss of revenue than the costs of repair.

Business is business, no matter the comodity. Trucking is no exception to the rules of business.

This reminds me of something I saw at the GATS show. A $180,000 expedite box truck. I asked the guy if he really thought it was possible to make profit with those fixed expenses on $1.10 revenue, and he said no, but the truck sure looked cool, and some older couple would surely buy it and go into that expediting. :wink:

Rev, are you trying to play the devils advocate, or the devil. :lol:

You know I kidding, go easy on me, I'm new at this.

Have fun out there today, and be safe

jonboy

[solo379]

Jonboy, you have a lot of common sense, and if you survive long enough, to get some practical knowledge, some day you'll make a fine O/O! 8)

[Rev.Vassago]

Originally Posted by Steve Booth

Even though they can all be deducted from my taxes they were really all presents to myself.

I'd sooner pay the taxes on the money, as the crap for the truck to make it look pretty has little to no return on the investment. It's like throwing money away, and it's a poor business decision.

I haven't paid any attention to details as far as what it's costing me to run the truck or analyzing the crap out of this business. My checking account has a sizable amount of money in it, my bills are paid and I can pretty much buy what I want.

:shock:

Wait until your truck is suddenly depreciated, and you actually have to pay taxes. Not paying attention to the details is the first step in failure.

It amazes me that someone will worry so much about how much they are earning per mile, yet they have no grasp on any of the numbers that really matter: the operating costs and the per-day costs. The above scenario is truly the definition of a hobby trucker.

Originally Posted by jonboy

Ok Rev, I'll break it down for you.

Considering both truckers have the same "fixed" expenses, since they both have a $50,000 truck, paid for or close to the same payment, then all other expenses would adjust according to gross income not necessarily mileage.

You are trying to read a whole lot more into it than there is, but sure.

I assume you are trying to say the guy that runs 100,000 miles more will make more money, and with that big of a spread, it's a given.

You would assume wrong.

My point was, the biggest savings would be on fixed expenses, and then after that, close scrutiny of variable expenses.

What if the guy that ran the 100,000 had an average of 1.25, and the 50,000 guy was able to get 2.00?

The guy with 100,000 has made more, or has he? It looks like $25,000 more, but is it? He may of grossed it, but does he still have it?

After you consider tired wear, depreciation of the truck, additional maintainence costs, and other factors, that could diminish some. Let's not forget costs to his family, or even costs at his home that have to be farmed out to others ie. minor plumbing repairs etc.

You are again reading a whole lot more into it, but yes - you are, for the most part, correct.

Trucking is not the automotive business, and that was not my point, only an example.

My point was, I believe (my opinion), you cannot spend, unless you're retarded I guess, as much money on an old truck as the cost of buying a new one.

I disagree 100%. Especially for the guy who is running 50,000 miles per year, as opposed to 150,000 (like me).

This reminds me of something I saw at the GATS show. A $180,000 expedite box truck. I asked the guy if he really thought it was possible to make profit with those fixed expenses on $1.10 revenue, and he said no, but the truck sure looked cool, and some older couple would surely buy it and go into that expediting. :wink:

A $180,000 expedite truck can and does make money. The trick is, don't run for $1.10. Nobody says you have to.

Rev, are you trying to play the devils advocate, or the devil. :lol:

You know I kidding, go easy on me, I'm new at this.

Nope - you're mis-understanding me.

[slacker]

Originally Posted by solo379

Jonboy, you have a lot of common sense, and if you survive long enough, to get some practical knowledge, some day you'll make a fine O/O! 8)

Thanks Solo, I hope I survive as well. I have no choice.


jonboy

[slacker]

Rev, I guess I misunderstood what you were trying to say.

I was trying hard, but just couldn't get it I suppose.

jonboy

[henboy1]

Got my CDL in 2004 and sat for about 6 months and drove a straight truck for 6 months.I quit that job and bought an E350 cargo van and did courier work in 2005/06.I then took a CDL refresher course in summer 06.I bought my first truck with a credit card, lied my way into trucking as far as experience.I started hauling containers for 6 months and quit.In Jan. 07 I started with Landstar hauling crappy ass dry van.I was struggling while hauling dry van until I took their securement class for platform.I now pull a STEPDECK(11' ON TOP AND 37' ON THE BOTTOM).I had no idea on chaining and tarping because the class didn't cover much of that practically.This was until another BCO with a flat took me around some loads we both booked and physically showed me everything about securement.My platform freight started 2 months ago and I have already hauled 15 loads.I just got back from hauling a 35kibs bulk tank(chains).Hauling platform freight is hard but the pay is good.My % is better and I am glad I left dry van alone.

[slacker]

Henboy, that is a pretty tough way to start.

I hope to get into the stepdeck freight next year myself.

jonboy