gingerfold:
Please don’t take this the wrong way, but if you spend £1,000 on fuel at a current fuel card price that will buy you approximately 239 gallons, at 8.00 mpg that will give you 1912 miles, so your rate per mile will be £1.31, which irrespective of your other costs will not be sustainable for a maximum weight artic and trailer. You have pitched your fuel costs as 40% of revenue, which is too high.
That was initial back of the envelope stuff. I’d never dream of going into business on that basis.
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Re my pevious post, i went into business with absolutely no planning, no business plan, no costings beyond fuel+wages wants to be about 50% of the charge. 25 years in business and 22 drivers later and it’s still how I work. I don’t like over-thinking.
weewulliewinkie:
nsmith I appreciate you are doing all the homework to get you going, but have you found good paying work to make this viable cos you should be doing this long before your anywhere near buying trucks etc etc…something else you should consider, for every costing you figure out you should add 20% again on top of this cos the number of unforeseen things that can ■■■■ up a days/weeks/months work at short notice is unbelievable. your figures may look ok on paper but trust me they will be well out on the actual “doing the business” so make allowances for it before you find out the hard way. EXPECT the UNEXPECTED. you hav,nt mentioned how much PROFIT you have set to aim for as this is the only way your business can thrive and grow and give you a goal to achive, to many past wannabees just buy the truck then go and do subbying from ads out the back of magazines, i.e maritime and suchlike this is the road to failure very quickly. once again I stress to you concentrate on finding good, regular, above average paying work FIRST then set about setting everything up ready to rock an roll. if you dont find a steady stream of income your wasting your time working out what your costs are if you,ve no money coming in to pay them. so before you carry on calculating costs get on the phone, internet, chap doors, cold call, pester potential customers and with some hard work and a good slice of good luck you might just find what you need to get you started. then you can work out exactly what equipment and how much fuel you will need to make that elusive big PROFIT we all seek…anyway i could go on all night about starting a business the proper way in our industry so good luck …and you never know till you,ve tried but do it properly!!!
Before you start, you need to have sufficient funds to cover the unexpected. I am an owner driver and have just fractured my shoulder(not at work). Been off now for 2 weeks and will probably be off for at least another 4 weeks may be 6. This will hurt and I have been doing it for more years than I care to remember!!
I have my finance payments insured so that if I’m unable to work my payments are made until I’m back on my feet, it’s not an all singing, all dancing policy that pays a wage too, just my lorry payments, I have my own slush fund for personal expenses. I wouldn’t be without an insurance to cover finance payments, losing everything I worked so hard for because of an illness or injury is not something I’m willing to chance.
gingerfold:
Please don’t take this the wrong way, but if you spend £1,000 on fuel at a current fuel card price that will buy you approximately 239 gallons, at 8.00 mpg that will give you 1912 miles, so your rate per mile will be £1.31, which irrespective of your other costs will not be sustainable for a maximum weight artic and trailer. You have pitched your fuel costs as 40% of revenue, which is too high.
That was initial back of the envelope stuff. I’d never dream of going into business on that basis.
Sent from my SM-G920F using Tapatalk
Re my pevious post, i went into business with absolutely no planning, no business plan, no costings beyond fuel+wages wants to be about 50% of the charge. 25 years in business and 22 drivers later and it’s still how I work. I don’t like over-thinking.
Would you recommend a new start O/D do something similar today though??!!![emoji52]
Perhaps you can over think things sometimes.
If he is looking at buying a 10k tractor and As long as he covers his costs and pays his bills and decides after a year or two it isn’t worth it its not the end of the world.
If he signs up at his local dealer for a new motor that’s very different and would require a lot more thought
kr79:
Perhaps you can over think things sometimes.
If he is looking at buying a 10k tractor and As long as he covers his costs and pays his bills and decides after a year or two it isn’t worth it its not the end of the world.
If he signs up at his local dealer for a new motor that’s very different and would require a lot more thought
^ This.
Which is where the catch 22 of the higher fuel consumption and increased maintenance costs of older trucks and less reliable,less durable,more complex, to maintain,nature of Euro types v US ones in that regard kicks in.On that note a 10-15k old Ozzy import with an N14 and Fuller in it is likely to be a better bet than the Euro option at the same price.But even if we got rid of the EU type approval and tax hurdles still no chance at almost £1 per litre diesel and less than £1.50 per mile rates.
kr79:
Perhaps you can over think things sometimes.
If he is looking at buying a 10k tractor and As long as he covers his costs and pays his bills and decides after a year or two it isn’t worth it its not the end of the world.
If he signs up at his local dealer for a new motor that’s very different and would require a lot more thought
They were always my thoughts from the outset, to be able to get out at any time with minimal loss. There are advantages and disadvantages to every way of operating a truck but with an older truck which is paid for then you always have an escape route whereas if you tie yourself into a long lease and it doesn’t work out then all you can do is stick with it while the quicksand rises above you.
I’m not saying it is the right thing to do- there is no right or wrong thing- just that what you said there mirrored my way of thinking when I started up.
gingerfold:
Please don’t take this the wrong way, but if you spend £1,000 on fuel at a current fuel card price that will buy you approximately 239 gallons, at 8.00 mpg that will give you 1912 miles, so your rate per mile will be £1.31, which irrespective of your other costs will not be sustainable for a maximum weight artic and trailer. You have pitched your fuel costs as 40% of revenue, which is too high.
That was initial back of the envelope stuff. I’d never dream of going into business on that basis.
Sent from my SM-G920F using Tapatalk
Re my pevious post, i went into business with absolutely no planning, no business plan, no costings beyond fuel+wages wants to be about 50% of the charge. 25 years in business and 22 drivers later and it’s still how I work. I don’t like over-thinking.
Would you recommend a new start O/D do something similar today though??!!![emoji52]
Sent from my SM-J500FN using Tapatalk
I honestly don’t know. What’s the difference between 1991 and now.? My Dad was an OD back in the late 60s and every issue he had, I had in '91 and the same issues exist now. There’s no real difference in the basics.
Part of it is luck. I struggled for a few years, took work that covered bills and not a remotely living wage, then I got in with a customer that paid better and slowly improved the customers and got into a really unusual niche.
As I said at the start on this thread, I can’t tell someone not to do it, when a child of five would have laughed at my extremely vague plan.
Unlike Harry, I’m glad I did it, though I’d be richer and less stressed working elsewhere. I don’t think I’m a better haulier than Harry, that I’m brighter or more business savvy, could be less so of all three. I just got a couple of lucky breaks and said yes whilst wondering how the **** I was going to do the job.
the bee in my bonnet about this and similar posts is this, very few go into it with the mindset that they are starting a living breathing business and as such the basic principles of doing so will always be there. It should,nt be a case of just owning your own truck and hopefully making a wage slightly better than you earned as an employee, its about properly running and growing a business that customers will pay a good price “regularly” to use and providing a good reliable service so they will keep coming back for more. However there is one thing most of the failures forget, the very reason for doing what you do “PROFIT PROFIT PROFIT” if you dont keep that as your baseline you will never get anywhere. Now finding work, the neverending quest, well guess what its simple!!! yes simple ah,ll say that again in case you thought it was a miss print…yes simple!!! if you dont ask you dont get… dont believe me■■?..whats to stop you phoning a list of potential customers ( that you will have gathered when you set out to look for work) arranging a meeting and professionally selling yourself and your service to them at an agreeable rate to both parties. thats how any business finds and develops customers, thats how I do it and I set myself a goal of a new customer, or an increase in business from an existing customer every 3 months and I hav,nt missed yet. PROFIT once again the magic word, every penny MUST be reinvested in your business or it will never survive never mind grow. This might all sound like pie in the sky to some and believe me I have had my share of bad bad times but if your business minded and not just a guy with a truck looking for a wage then you wont go far wrong. So my message to all the wannabees is if you want to give it a go, Im the first that will say DO IT but dont faff about living on the edge wondering if you will be bankrupt next week, IT WILL ONLY WORK IF YOU MAKE IT WORK, so do it but go about it the proper way and you might just succeed…
weewulliewinkie:
PROFIT once again the magic word, if your business minded and not just a guy with a truck looking for a wage then you wont go far wrong.
Ironically the best way to make a profit is to use owner drivers who are just looking to cover their costs and earn a decent wage.That’s why there’s haulage companies with direct access to their own customers,or freight brokers/forwarders,or there’s sub contract owner drivers.Not,by definition,a combination of all three.
The problem in this case being nothing to do with unprofitability of the owner driver sector because profitability isn’t the end game in that specific sector because if it was it would obviously defeat its own object.The problem is the fact that it’s too difficult for owner drivers to cover costs and earn a decent wage at current fuel and legislative costs,as a proportion of likely revenues.On that note as it stands revenues can’t go up without affecting main contractor profitability.Which logically just leaves costs in the form of much lower/removed fuel taxation and legislative in the form of allowing heavier trucks hence increased revenues paid for from productivety increases and ideally,arguably,non Euro type approved trucks,thereby hopefully reducing purchase and maintenance and depreciation costs especially for new start owner drivers.
While the idea of owner driver profitability being an essential ingredient seems to make the erroneous conclusion that a haulage company can only start from the position of an owner driver type operation.When the reality is that a haulage company starting from an owner driver position is arguably just an exception not the rule based on that driver’s different ambitions and intentions,which are by no means the actual object for many/most.
gingerfold:
Please don’t take this the wrong way, but if you spend £1,000 on fuel at a current fuel card price that will buy you approximately 239 gallons, at 8.00 mpg that will give you 1912 miles, so your rate per mile will be £1.31, which irrespective of your other costs will not be sustainable for a maximum weight artic and trailer. You have pitched your fuel costs as 40% of revenue, which is too high.
That was initial back of the envelope stuff. I’d never dream of going into business on that basis.
Sent from my SM-G920F using Tapatalk
Re my pevious post, i went into business with absolutely no planning, no business plan, no costings beyond fuel+wages wants to be about 50% of the charge. 25 years in business and 22 drivers later and it’s still how I work. I don’t like over-thinking.
Would you recommend a new start O/D do something similar today though??!!![emoji52]
Sent from my SM-J500FN using Tapatalk
I honestly don’t know. What’s the difference between 1991 and now.? My Dad was an OD back in the late 60s and every issue he had, I had in '91 and the same issues exist now. There’s no real difference in the basics.
Part of it is luck. I struggled for a few years, took work that covered bills and not a remotely living wage, then I got in with a customer that paid better and slowly improved the customers and got into a really unusual niche.
As I said at the start on this thread, I can’t tell someone not to do it, when a child of five would have laughed at my extremely vague plan.
Unlike Harry, I’m glad I did it, though I’d be richer and less stressed working elsewhere. I don’t think I’m a better haulier than Harry, that I’m brighter or more business savvy, could be less so of all three. I just got a couple of lucky breaks and said yes whilst wondering how the **** I was going to do the job.
I do think that you can overthink things though.
Agree with you entirely but I wonder how many O/Ds who started in 1991 are still running a business and a successful one at that??
As you said “luck” plays a great part but you obviously know what your at over the yrs.
Even though I only ran my own truck for 4yrs then sold up,
the business bank account was in good shape
You could make snowballs in hell before I’d apply for another “O” licence!!![emoji6]
albion:
I find these threads difficult. In one way I’m with Harry, weewullie and dieseldog because I’m old and got all the t-shirts. I’ve seen many people lose a lot of money, one their house and in the early days I was nearly amongst them.
But if I hadn’t given things a whirl, then I wouldn’t be where I am now, two bases, 22 staff. So I say if you want to do it, just be aware that for everyone that is successful, ten weren’t.
.
I think in essence we agree. I wouldn’t recommend it, but I’d be a hypocrite to say absolutely don’t do it, when it worked OK for me.
And in answer to your question, very very few. Figure completely out of the air, one in a hundred■■? And of that, how many are still at one wagon, not earning any more than an employed person but with hassle?
This business can definitely chew you up and spit you out.
Albion, you get it, Kev mentioned over thinking it and that’s a trap that many fall into.
I recently wrote an article on this very thing, the main gist of it was to keep it simple.
You want to build up your bank account, simple, spend less than you earn.
To do this as an O/D you need very few things, a decent rate, consistent work, a reliable and fuel efficient lorry and that’s it, so simple.
Get those basics right and you’ll succeed, you don’t need a complicated business plan, it’s all quite simple really, you need to earn as much as you can whilst spending as little as possible to do so. Spend your money wisely, the cost of doing business can be quite high, but as long as your revenue is more than that, you will make money.
Whatever you call it and what carryfast and the op have slightly missed even buying the truck outright you have to earn enough to pay a wage and a bit more to pay the back in to your savings or towards its replacement.
If you say I only need 200quid a week to live on you are heading down a slippery slope.
I know there will be bad weeks where there may be nothing left after the bills are paid but you need to pay yourself a realistic drivers salary at least to make it worthwhile.
Two of my mates run small fleets on the same work. One runs four new leased motors with full r&m the other has five bought at three years old ex lease and he runs them until they are past there best roughly 7-8 years and he is handy with a spanner and does most of his own repairs.
Both make a good living who’s business model is the best? You can’t say but both are happy with there way of doing it.
The old saying “turnover is vanity, profit is sanity” holds good today, just as it did at any other time, and it applies to a one man band as well as to any major fleet. Also monitoring and controlling cash flow is a vital function for any business large or small.
kr79:
Whatever you call it and what carryfast and the op have slightly missed even buying the truck outright you have to earn enough to pay a wage and a bit more to pay the back in to your savings or towards its replacement.
If you say I only need 200quid a week to live on you are heading down a slippery slope.
I know there will be bad weeks where there may be nothing left after the bills are paid but you need to pay yourself a realistic drivers salary at least to make it worthwhile.
My point was that as an owner driver or at least a sub contractor ‘profit’ generally isn’t the object.The definition of profit being loads of money left over after ‘all’ the costs ‘and’ a decent wage have been covered.
While in the case of a subby it’s obvious that the object is for the main contractor to make most/all of any profit potential in the job.Which is why they sub the job out.The main contractor being either a haulage company or freight forwarder/broker either being the ones with direct contact with the customer.While if we’re saying that an owner driver operation can only work by taking over that customer contractor relationship then that obviously means that the owner driver business model can only work in the form of either cutting out the middle man in the form of the freight broker/forwarder or the haulage company with every owner driver working as a small haulage company in their own right all with direct contact with the customer,so as to take all/any profit in the job.Which is total bollox.
While I’d guess that what nmm is describing is the ideal ( sub contract ) owner driver situation of good sub contract rates relative to costs.That will not only cover ‘all’ the costs easily but also pay a good wage much better than that in the employed sector.Which could be regarded as a form of ‘profit’ but in reality isn’t.It’s just a good wage.
On that note depreciation and replacement and maintenance are a cost.The difference in the case of an owner driver being that those costs could potentially be minimised by using older cheaper to purchase and replace and simpler cheaper to maintain and more durable kit.The problem being that the current legislative and fuel cost environment effectively removes that option.Leaving owner drivers in the same position as the big players of expensive to purchase and replace and complex,less durable,expensive to maintain,vehicles.IE that older 10-15k Ozzy N14 powered Fuller import v the Euro counterpart example.But without the economies of scale to offset against those costs enjoyed by the big players.
In all cases it’s the unviable unsustainable cost of fuel,as a proportion of revenues/rates,which is the deal breaker.
gingerfold:
The old saying “turnover is vanity, profit is sanity” holds good today, just as it did at any other time, and it applies to a one man band as well as to any major fleet.
Logically if you want to go by that idea that would effectively remove the option of sub contract work.Because the idea of sub contract is for the forwarder/broker/main haulage contractor to take the profit leaving the owner driver with hopefully a better wage and a better choice of work,than they would have got working as an employed driver,after covering all the costs.The problem in this case being that there’s no way of making all those figures add up after fuel costs have been taken out.
gingerfold:
The old saying “turnover is vanity, profit is sanity” holds good today, just as it did at any other time, and it applies to a one man band as well as to any major fleet.
Logically if you want to go by that idea that would effectively remove the option of sub contract work.Because the idea of sub contract is for the forwarder/broker/main haulage contractor to take the profit leaving the owner driver with hopefully a better wage and a better choice of work,than they would have got working as an employed driver,after covering all the costs.The problem in this case being that there’s no way of making all those figures add up after fuel costs have been taken out.
Fuel doesn’t ( well shouldn’t ) matter to the extent that it’s a make or break. It’s the wage that changes the outcome the most, be it a firm employing 500 drivers, mine with 20 odd or an OD.
Take my competitors ( please someone ), they pay more or less the same for fuel*, the truck costs the same **, wages are the difference. Last year one of my competitors were paying 0.98 pence less an hour than me, currently they pay 0.21p an hour more. Wages are the one thing a haulier/forwarder/broker can control - you can’t tell Scania you are only paying 50k for a truck or Shell that they can foxtrot because you can get it 20p a litre cheaper with BP.
We had a good year last year and the lads got a £500.00 bonus at xmas and 3% wage increase. That doesn’t sound much but 3% on a wage bill is what would finish us, if we lost work and had to take lower paying work. Shell and Scania don’t care wether I’m making money or losing money, the price is the price.
maybe they pay a penny a litre less, but next week they may pay a penny a litre more than me. Any type of contract, you have to insist on a fuel escalator be you Wincantons or an OD.
** you can fiddle about buying a new one and replacing after 4 years or holding onto it for twice that and seeing how the repair bills go, but my personal opinion is that it kinda balances out at the end.
gingerfold:
The old saying “turnover is vanity, profit is sanity” holds good today, just as it did at any other time, and it applies to a one man band as well as to any major fleet.
Logically if you want to go by that idea that would effectively remove the option of sub contract work.Because the idea of sub contract is for the forwarder/broker/main haulage contractor to take the profit leaving the owner driver with hopefully a better wage and a better choice of work,than they would have got working as an employed driver,after covering all the costs.The problem in this case being that there’s no way of making all those figures add up after fuel costs have been taken out.
You’re spot on CF, I don’t want to take sub-contracted work at any time. Sometimes there is no option with back-loads, but 90% of our work is with direct customers, both outbound and return. We have one owner driver subbing for us full time who owns his own truck outright, and we’re not looking to take on anymore subbies. With direct work and just one trusted subbie we have total control of what we do. Last week we had to sub out two back loads because we were so busy, and they both ended up being late collections and even later deliveries.
), they pay more or less the same for fuel*, the truck costs the same **, wages are the difference. Last year one of my competitors were paying 0.98 pence less an hour than me, currently they pay 0.21p an hour more. Wages are the one thing a haulier/forwarder/broker can control - you can’t tell Scania you are only paying 50k for a truck or Shell that they can foxtrot because you can get it 20p a litre cheaper with BP.