Moose:
it depends on what you call a small proffit, if as i your o/p @ 10k you might as well sell up and drive for another haulier
But in my example, that £10k was while still keeping 60 people in work?
Ross.
Who cares about the 60 staff? If the figures don’t stack up, they don’t stack up. It’s all well and good having all these fluffy morals but morals don’t generate you any of the much needed cash when your business is in a crisis. If the business isn’t making any money and you’ve exhausted all avenues to generate some then you are stupid to carry on prolonging the inevitable. All these “great” ideas about cutting wages to keep everyone in a job til the work turns around are a load of bollox as well as all that happens when you do that is you get resentment from your staff and their productivity drops inline with the amount you cut their wages. The end result of each is the same : your business collapses.
If you are a business owner and you have a choice between getting out debt free and trying to turn a corner and in the process you could lose everything then there is only one answer, you get out while you’re still ahead
Worrying about staff doesn’t enter the equation as 100% of your staff would leave your company in a heartbeat if staying employed by you would put them into debt, so treat them in the same manner they would treat you
Business is business, charity is charity, you cannot confuse the two. An employee of a company is just another piece of equipment, you need to look after them to get the best from them, the same as you do with machinery, emotion has no place in it
newmercman:
Getting a bit pink and fluffy on here lately
If you are a business owner and you have a choice between getting out debt free and trying to turn a corner and in the process you could lose everything then there is only one answer, you get out while you’re still ahead
Worrying about staff doesn’t enter the equation as 100% of your staff would leave your company in a heartbeat if staying employed by you would put them into debt, so treat them in the same manner they would treat you
Business is business, charity is charity, you cannot confuse the two. An employee of a company is just another piece of equipment, you need to look after them to get the best from them, the same as you do with machinery, emotion has no place in it
Totally agree, although I feel we have a tsunami of backlash heading our way soon, with lots of mention of loyalty, morals, how-would-you-feel-if-it-was you etc etc.
Obviously nobody can trade at a loss for any sustained length of time, and nobody would aim to build a 40 vehicle fleet operating on 1% profit. But if that’s what you already have, and those figures are holding steady then there would seem to be little point in shutting up shop. Any long-established firm will have survived through several recessions and I imagine that most if not all would take the view that we are now going through another one and that if it can be traded through, then that’s the best option.
newmercman:
Getting a bit pink and fluffy on here lately
If you are a business owner and you have a choice between getting out debt free and trying to turn a corner and in the process you could lose everything then there is only one answer, you get out while you’re still ahead
Worrying about staff doesn’t enter the equation as 100% of your staff would leave your company in a heartbeat if staying employed by you would put them into debt, so treat them in the same manner they would treat you
Business is business, charity is charity, you cannot confuse the two. An employee of a company is just another piece of equipment, you need to look after them to get the best from them, the same as you do with machinery, emotion has no place in it
That’s the realistic way to look at it.But.As I remember it the employers didn’t exactly see things that way when the unions took exactly the same line in regards to erosion of terms and conditions often with the employers whingeing about we’re all in this together and reductions in pay rates have to be accepted to get the firm over yet another bs downturn.
When mostly every recession we’ve ever had has always been because too many employers used that same old bs excuse every time their employees asked for a wage rise to keep incomes ahead of prices which is the only way you’ll get economic growth.
So absolutely just as any decent 1970’s union rep would have said we’re just another piece of machinery to you and we’re not a charity so pay up or close down.
To which Maggie’s answer was ok we’ll close down and import everything instead often paying German workers more than our own to do the job in addition to running up a huge trade deficit.
Which is more or less where things are now.But that still doesn’t alter the fact that an owner driver operation can happily run without any profit margin whatsoever because the object of the excercise is to earn just enough to pay ‘the driver’ a decent wage after all the costs have been taken out nothing more and those costs are going to be kept to the minimum possible by just keeping the operation at the single unit driven by it’s owner and driver level.
In the case of an owner driver the piece of machinery that you’re referring to would be yourself no one else.So taking the issue of it supposedly being all about ‘profit’ to it’s logical conclusion that would mean that an owner driver should shut down an operation and sack himself from a job that’s paying him a decent wage and that involves decent work.Just because there’s no profit left on paper for ‘the company’ after all the costs and his wages have been taken out.
Yeah right and let me guess the next piece of good advice would then be take on a zb agency job driving a HIAB wagon for the local builders firm probably for less money.
Harry Monk:
Obviously nobody can trade at a loss for any sustained length of time, and nobody would aim to build a 40 vehicle fleet operating on 1% profit. But if that’s what you already have, and those figures are holding steady then there would seem to be little point in shutting up shop. Any long-established firm will have survived through several recessions and I imagine that most if not all would take the view that we are now going through another one and that if it can be traded through, then that’s the best option.
Absoulutely HM, my friend in (almost) this position could cut costs by parking up about 10 of his trucks (almost half) and dump some of the lower margin work but his attitude is that if we have an upturn he will be in a better position with all his trucks on the road.
I can’t believe how many TNUK members are saying SHUT DOWN!! I did say (in this example) he was making a profit, so why shut down simply because profit’s are lower than he would like??
Mind you, this forum is full of armchair warriors who ‘talk a good fight’!!
bigr250:
I can’t believe how many TNUK members are saying SHUT DOWN!! I did say (in this example) he was making a profit, so why shut down simply because profit’s are lower than he would like??
That’s the part I can’t understand. In a recession you would expect to earn less, but in the example given the company was trading profitably, and paying the wages of forty people including the owner and quite possibly other members of his family. Why would it make financial sense to close down?
bigr250:
I can’t believe how many TNUK members are saying SHUT DOWN!! I did say (in this example) he was making a profit, so why shut down simply because profit’s are lower than he would like??
That’s the part I can’t understand. In a recession you would expect to earn less, but in the example given the company was trading profitably, and paying the wages of forty people including the owner and quite possibly other members of his family. Why would it make financial sense to close down?
Harry I’ve raised a simple question that’s relevant to an owner driver operation as opposed to a big fleet company scenario.As profit logically means what’s left over after all the costs ‘and’ the wage bill have been paid would that also apply in the case of an owner driver type operation.IE would any sane owner driver shut down,thereby making himself redundant,and take a job on the agency just because there’s little,if any,actual profit showing on the balance sheet after the driver has taken a decent wage from the job.Especially if that job is doing something far better than the type of zb work that would be available probably for less money on the agency .
It’s that difference which is the advantage that an owner driver operation has over the fleet company type operations and it’s what the demand for owner driver sub contractors is based on.In the case of an owner driver just earning a wage is the object and is enough.Whereas the object of the company fleet type operation is to charge a figure over and above what it costs to run the truck and pay the driver which therefore prices itself out of a job compared to what the owner driver charges.
bigr250:
I can’t believe how many TNUK members are saying SHUT DOWN!! I did say (in this example) he was making a profit, so why shut down simply because profit’s are lower than he would like??
That’s the part I can’t understand. In a recession you would expect to earn less, but in the example given the company was trading profitably, and paying the wages of forty people including the owner and quite possibly other members of his family. Why would it make financial sense to close down?
Armchair warriors HM!!! (the sort that are first to ‘put the boot in’ to a boss that made some drivers redundant!!) “I’ve given you 5 years of my life” etc, etc!! I can tell you that my boss isn’t often the first into the yard but he’s always the last out of it and definately puts more hours in than nearly all of his drivers!! (a lot more than me )
Harry Monk:
Obviously nobody can trade at a loss for any sustained length of time, and nobody would aim to build a 40 vehicle fleet operating on 1% profit. But if that’s what you already have, and those figures are holding steady then there would seem to be little point in shutting up shop. Any long-established firm will have survived through several recessions and I imagine that most if not all would take the view that we are now going through another one and that if it can be traded through, then that’s the best option.
Absoulutely HM, my friend in (almost) this position could cut costs by parking up about 10 of his trucks (almost half) and dump some of the lower margin work but his attitude is that if we have an upturn he will be in a better position with all his trucks on the road.
I can’t believe how many TNUK members are saying SHUT DOWN!! I did say (in this example) he was making a profit, so why shut down simply because profit’s are lower than he would like??
Mind you, this forum is full of armchair warriors who ‘talk a good fight’!!
Ross.
There is some merit to this argument, after all, you have the equipment and the corresponding finance payments etc in place, so ride out the storm and when things pick up, you’re laughing. The bad times will remove some of the dead wood and those that survive can have their pick of the best drivers and equipment as prices will drop as more of both will be available, in time it will become a buyer’s market.
But, you have to get to that point, to do this you really need to be on the ball and to make sure that the decision to do this is a business decision and not an emotional one. Yes it is a horrible to think that you may have to close down a business that you’ve worked hard to establish, you can be as hard arsed as you like, but laying off employees will not be a pleasant experience and there will be a sense of failure.
The alternative is to leave it too late, then the repo man turns up at the yard, you’re in the County Court facing bankruptcy and nobody has a job, it’s a very fine line that seperates the two and you have to keep an eye on that line or you cross it and you’re [zb]ed…For good
Carryfast, you have your theories, but no facts to back up your argument. So tell us how you would make enough money to put petrol in the Jag working at the rates that are on offer at the moment. You have a lot to say on the subject, but do you have an idea how much you would earn in a month and how much it would cost you to do so
Harry Monk:
Obviously nobody can trade at a loss for any sustained length of time, and nobody would aim to build a 40 vehicle fleet operating on 1% profit. But if that’s what you already have, and those figures are holding steady then there would seem to be little point in shutting up shop. Any long-established firm will have survived through several recessions and I imagine that most if not all would take the view that we are now going through another one and that if it can be traded through, then that’s the best option.
Absoulutely HM, my friend in (almost) this position could cut costs by parking up about 10 of his trucks (almost half) and dump some of the lower margin work but his attitude is that if we have an upturn he will be in a better position with all his trucks on the road.
I can’t believe how many TNUK members are saying SHUT DOWN!! I did say (in this example) he was making a profit, so why shut down simply because profit’s are lower than he would like??
Mind you, this forum is full of armchair warriors who ‘talk a good fight’!!
Ross.
Carryfast, you have your theories, but no facts to back up your argument. So tell us how you would make enough money to put petrol in the Jag working at the rates that are on offer at the moment. You have a lot to say on the subject, but do you have an idea how much you would earn in a month and how much it would cost you to do so
Logic says that there’s absolutely no need for an owner driver operation to earn an actual ‘profit’ from the job.What would be the point in sub contracting work to an owner driver if the owner driver charges the same price as the big company fleet.It’s all about the fact that an owner driver operation can just work on the basis of cost without needing any profit on top.That’s obviously assuming the owner driver is happy just staying an owner driver and just so long as the job pays enough to cover a similar (hopefully better) wage as would be available as an employed driver.
The time to shut down (or not start up) an owner driver operation is when the rates and demand for the service don’t seem to even provide any guarantee that the wage,after all the costs of running the wagon,will be sufficient to live on.I think in many cases that’s where the industry is now and that’s one of the reasons why I’m out.But the idea of ‘profit’ in the case of an owner driver operation doesn’t even factor into the equation because that would defeat the object of anyone subbing out the work to start with.
Carryfast:
Logic says that there’s absolutely no need for an owner driver operation to earn an actual ‘profit’ from the job.What would be the point in sub contracting work to an owner driver if the owner driver charges the same price as the big company fleet.It’s all about the fact that an owner driver operation can just work on the basis of cost without needing any profit on top.That’s obviously assuming the owner driver is happy just staying an owner driver and just so long as the job pays enough to cover a similar (hopefully better) wage as would be available as an employed driver.
One of the balancing acts I have to perform is to ensure that my company doesn’t make a profit- if it made a profit, it would have to pay Corporation Tax.
The way I ensure it doesn’t make a profit is that at the end of every month, most of any surplus is paid to me in the form of a loan repayment- I lent my company the money it needed to start up. Obviously, money received by me as a loan repayment isn’t taxable, and my salary falls below the threshold for PAYE or NI payments (although I receive a NI credit) so neither the company nor myself pay any tax, and won’t do until the loan is fully repaid.
The company has just paid me for November’s work, I’m not going to say how much because I’m in a lose/lose situation. Either I will not be believed, or if I am I will be accused of willy-waving. But it’s safe to say that my net income was at least the same as a normal employee’s gross income would be, and the figures on my company balance sheet are still more than they were this time last month. All I can say is that there’s nothing tying me to this, I could sell the truck tomorrow and get out, but I won’t be.
Carryfast:
Logic says that there’s absolutely no need for an owner driver operation to earn an actual ‘profit’ from the job.What would be the point in sub contracting work to an owner driver if the owner driver charges the same price as the big company fleet.It’s all about the fact that an owner driver operation can just work on the basis of cost without needing any profit on top.That’s obviously assuming the owner driver is happy just staying an owner driver and just so long as the job pays enough to cover a similar (hopefully better) wage as would be available as an employed driver.
One of the balancing acts I have to perform is to ensure that my company doesn’t make a profit- if it made a profit, it would have to pay Corporation Tax.
The way I ensure it doesn’t make a profit is that at the end of every month, most of any surplus is paid to me in the form of a loan repayment- I lent my company the money it needed to start up. Obviously, money received by me as a loan repayment isn’t taxable, and my salary falls below the threshold for PAYE or NI payments (although I receive a NI credit) so neither the company nor myself pay any tax, and won’t do until the loan is fully repaid.
The company has just paid me for November’s work, I’m not going to say how much because I’m in a lose/lose situation. Either I will not be believed, or if I am I will be accused of willy-waving. But it’s safe to say that my net income was at least the same as a normal employee’s gross income would be, and the figures on my company balance sheet are still more than they were this time last month. All I can say is that there’s nothing tying me to this, I could sell the truck tomorrow and get out, but I won’t be.
Those rates which you’ve described seem reasonable enough to me to provide a decent living.It’s just a question of wether that type of return applies together with strong enough demand compared to capacity to rely on it in the medium to long term throughout the owner driver sub contract sector of the industry as a whole which would stop me at least being tempted at this stage.If I thought that it would be possible to find those rates easily doing long haul full load work for example with sufficient demand for the service relative to the amount of capacity out there I’d certainly think about it.But the industry just doesn’t seem that strong to me.
But the important thing as I see it is that it’s just the decent driver income/wage potential and threshold that matters in the case of an owner driver operation and anything over that is just a bonus which could range from zero to whatever without being a factor whatsoever in the decision as to the future trading situation of the operation.
I’m trying to understand nmm’s view of that question related to wether any sane owner driver would shut down an operation and make themselves redundant,assuming that the operation is paying a decent wage while showing little,if any,profit margin over and above that .
Granted if your making a good wage stick at it but if you are only making a wage an employed driver is making you got to look long and hard to think is it worth the extra hassle just for a wage.
kr79:
Of course a owner driver has to make a profit one way or another how are you going to renew your truck at some point.
You have to make a profit, the important thing is not to show a profit.
That’s true and that is one of the perks of been self employed over been a wage slave.
But you know as well as anyone you have got to make a profit one way or another.
kr79:
Of course a owner driver has to make a profit one way or another how are you going to renew your truck at some point.
Depreciation and replacement costs are (should be) factored into the costs side of the balance sheet anyway.Profit means what’s left after ‘all’ the costs and wages have been taken out.As I’ve said it’s that issue of rates v costs nothing to do with profit margins which is what stops me even thinking about the possibility as the industry stands at present.But having said that no sensible owner driver would replace a truck with something that isn’t the same price and age as the original purchase was when it was bought.As I’ve said the way I see it the object of the excercise is to stay an owner driver running a truck which is cheap enough to buy but good enough to do the job and earn a decent wage doing it nothing more than that.
kr79:
But you know as well as anyone you have got to make a profit one way or another.
There’s a company with at least a dozen trucks whose entire business model consists of subcontracting to the company I subcontract to, they’ve been doing it for years and run Volvo FH12s, all less than three years old. They get the same job rates that I do.
Logic dictates that I earn at least as much as their drivers, plus the share which their admin staff receive, plus the same profit margin which they make. Plus whatever the taxman takes from all of those folk. Plus working tax credits.
I just cannot get my head around this idea that it is not possible to earn money as a small haulier. I’m baffled when folk tell me that I’m on a fool’s errand and that they will be amazed if I last the next week/month/year when the only person here who has access to my accounts is me, and I’m quite happy to soldier on.
RobK seems to be the prime example of this. As far as I’m aware, he has absolutely no knowledge or experience of operating a truck but that doesn’t seem to stop him knowing more about it than everyone who ever has. One of life’s mysteries to me has always been that the less a person knows about something, the more opinionated they are about it.
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