routier:
as an O/D you should have a min turnover of £5500,50 per week if not Id forget it
[zb] me routier, do you have a phone number?
I reckon it is possible to survive as a subcontractor if you keep an eye on costs. NOT being an owner driver this is probably all wrong but say you were on £1.15 a mile. If you did 1650miles that would make you £1897, lets call it £1900.
I’m not to sure what fuel would be for that, so lets say £1000
Then:
Truck finance: £200
Insurance,tax, maintenance and other things: £200
Wage: £500
I have probably missed some things out(not being an owner driver and all ) but it seems possible if you just want to earn a drivers wage…
Please correct me where i am wrong (not by saying hes just a [zb] school boy) so me and others can learn.
A ROUGH guide is to charge a job at 3 times the cost of your diesel.
the difference is huge, i looked at boxes a few times and just could’nt work out how anyone could earn a living out of em at the rates that were being offered!
when i packed in (dec2008) nearly all my work paid £2+ a mile if it didn’t, in my eyes, it weren’t worth doing but as most find out at some point, anyone can offer any rate if they’ve no intention of paying you!
invoice factoring was and probably still is the best way to go, cash flow is king in this game but not only that, the first thing your factoring company will do is credit check your costumer, if they wont touch em then neither should you.
paul b:
the difference is huge, i looked at boxes a few times and just could’nt work out how anyone could earn a living out of em at the rates that were being offered!
when i packed in (dec2008) nearly all my work paid £2+ a mile if it didn’t, in my eyes, it weren’t worth doing but as most find out at some point, anyone can offer any rate if they’ve no intention of paying you!
invoice factoring was and probably still is the best way to go, cash flow is king in this game but not only that, the first thing your factoring company will do is credit check your costumer, if they wont touch em then neither should you.
factoring are you having a laugh they take up to 5% off you which is up to £125 on £2500 turn over pw.
£6500 per year you have gave away off your profit. if you cant run it on your own you shouldnt be in the job
the vast majority of haulage firms invoice factor, even the big boys, as said cash flow is every thing, question are you better off working as a dedicated suby getting weekly payments but working for ridiculously low rates or go out and get your own costumers at your rates but stand the cost of invoice factoring?
it’s not hard to work out which puts the most money in your pocket?
everyone has to make the same choice i.e do i want to earn a wage but be able to say it’s my truck or do i want to run a truck as a business and actually make some money?
I get charged between 1.5% and 3% for invoice factoring which having the money in the bank week two for week one’s work rather than waiting 60 days for it is worth it in my opinion.
Silver_Surfer:
I get charged between 1.5% and 3% for invoice factoring which having the money in the bank week two for week one’s work rather than waiting 60 days for it is worth it in my opinion.
Here’s my take on it.
If you’re for the sake of argument factoring 10k of invoices a month at 2%, that’s costing you 200quid/month. If those invoices are on 60day terms then you’ll always have 2 months worth factored, which is about 20k.
Seeing as factoring is little more than a short term loan at a very high rate of interest, why not instead get an extra 20k on your mortgage, put that 20k into your business and stop factoring. Even at 8%APR that will only cost you an extra 150/month over 25 years, leaving you 50quid a month better off. If your mortgage is 5% APR you’ll be instantly £85/month (or just over a grand a year) better off.
If the factoring is costing you much more than 2% then this method will result in even greater savings. For example if you’re having to pay 3% it would pay to just borrow the 20k over 10 years as a business loan. 3% of 10k is 300quid/month, a 20k loan over 10 years at 10%APR is only about £260/month, you’re £40/month better off for 10 years and then £300/month after that. At 5% it would leave you instantly £240/month better off.
paul b:
the difference is huge, i looked at boxes a few times and just could’nt work out how anyone could earn a living out of em at the rates that were being offered!
when i packed in (dec2008) nearly all my work paid £2+ a mile if it didn’t, in my eyes, it weren’t worth doing but as most find out at some point, anyone can offer any rate if they’ve no intention of paying you!
invoice factoring was and probably still is the best way to go, cash flow is king in this game but not only that, the first thing your factoring company will do is credit check your costumer, if they wont touch em then neither should you.
factoring are you having a laugh they take up to 5% off you which is up to £125 on £2500 turn over pw.
£6500 per year you have gave away off your profit. if you cant run it on your own you shouldnt be in the job
I’d shop around if I were you Lee.
2.5% @ Bibby, 75% up front, balance on setlement.
Silverburn, 4% initially, discounted after an initial period, 96 % up front !
Lloyds 1% on a minimum 40k monthly t/o, 80% up front, etc…
Silver_Surfer:
I get charged between 1.5% and 3% for invoice factoring which having the money in the bank week two for week one’s work rather than waiting 60 days for it is worth it in my opinion.
Here’s my take on it.
If you’re for the sake of argument factoring 10k of invoices a month at 2%, that’s costing you 200quid/month. If those invoices are on 60day terms then you’ll always have 2 months worth factored, which is about 20k.
Seeing as factoring is little more than a short term loan at a very high rate of interest, why not instead get an extra 20k on your mortgage, put that 20k into your business and stop factoring. Even at 8%APR that will only cost you an extra 150/month over 25 years, leaving you 50quid a month better off. If your mortgage is 5% APR you’ll be instantly £85/month (or just over a grand a year) better off.
If the factoring is costing you much more than 2% then this method will result in even greater savings. For example if you’re having to pay 3% it would pay to just borrow the 20k over 10 years as a business loan. 3% of 10k is 300quid/month, a 20k loan over 10 years at 10%APR is only about £260/month, you’re £40/month better off for 10 years and then £300/month after that. At 5% it would leave you instantly £240/month better off.
Paul
Makes sense for an o/d paul but what about insuring your invoices, expansion or the taking on of subbies.
How many times would you be prepared to remortgage then ?
Silver_Surfer:
I get charged between 1.5% and 3% for invoice factoring which having the money in the bank week two for week one’s work rather than waiting 60 days for it is worth it in my opinion.
Here’s my take on it.
If you’re for the sake of argument factoring 10k of invoices a month at 2%, that’s costing you 200quid/month. If those invoices are on 60day terms then you’ll always have 2 months worth factored, which is about 20k.
Seeing as factoring is little more than a short term loan at a very high rate of interest, why not instead get an extra 20k on your mortgage, put that 20k into your business and stop factoring. Even at 8%APR that will only cost you an extra 150/month over 25 years, leaving you 50quid a month better off. If your mortgage is 5% APR you’ll be instantly £85/month (or just over a grand a year) better off.
If the factoring is costing you much more than 2% then this method will result in even greater savings. For example if you’re having to pay 3% it would pay to just borrow the 20k over 10 years as a business loan. 3% of 10k is 300quid/month, a 20k loan over 10 years at 10%APR is only about £260/month, you’re £40/month better off for 10 years and then £300/month after that. At 5% it would leave you instantly £240/month better off.
Paul
so taking out a loan over twenty five years is a better option? wonder how many coming into the job have made that mistake and lived to regret it?
i used to use silverburn, they charged me 3% as my costumers were all firms they’d dealt with previously, interestingly a haulage company who i subbed some work off that on the face of it were a pretty safe bet, they knocked back as unsuitable, that same company went bust last year owing a lot of people a lot of money!
it really is a no brainer, basically the best money you’ll ever spend.
paul b:
it really is a no brainer, basically the best money you’ll ever spend.
I honestly can’t see it. Paying 3% for 2 months credit is even dearer than most credit cards, and the thought of paying out 3 grand or more each year for short term credit doesn’t sit well with me at all. I would much rather make sure the business is properly capitalised in the first place and have the extra 3k profit.
paul b:
it really is a no brainer, basically the best money you’ll ever spend.
I honestly can’t see it. Paying 3% for 2 months credit is even dearer than most credit cards, and the thought of paying out 3 grand or more each year for short term credit doesn’t sit well with me at all. I would much rather make sure the business is properly capitalised in the first place and have the extra 3k profit.
Paul
totaly agree with you repton.
i have worked for several different customers over the last 7 yrs waiting 30 & 60 days for payment
never had to factor never will as everyone will agree the job is tight enough without giving 3.4.5% away off
your profit
i guess it all depends on indivdual circumstances, for me at the time to move from being a dedicated subby to finding my own work it was realistically the only option, i looked at it that the rates i could get were so vastly better than those as a suby the 3% was not even worth considering but i had an o center that required paying for monthly, same with my maintenence bills, fuel accounts and truck finance, it only took one month where my main customers cheuqe came a couple of days late and my fuel account was put on stop to make me realise that cash flow was the most important thing! if you’ve got a setup with your suppliers where you can pay them on sixty days and still command the lowest rates for fuel etc, you’ve done more than i could achieve in six years of doing the job.
remortgage/loan v’s invoice factoring, invoice factor against invoices for work done in any given month, loan requires paying weather you’ve been out to work or not i.e you’ve been on holiday and only worked two weeks of a month, you’ve had a major repair on the wagon which has seen you not only work two weeks that month but also run up a big bill, your loan payment is still due, all of a sudden it’s not cheap money, it’s a ball n chain around your neck.
of coarse the clever man will use that weekly cash flow to his advantage, for instance i originally had my matenence work carried out by a big commercial garage, they provided a good service but they also knew how to charge for it, moved to a local mobile machanic who was quite happy to work for a lot less based on the fact i could pay him straight away for any work he did on the wagon, the saving was a great deal more than the 3%.
Hi. Tried it twice with disasterous results both times. As an OD you don’t earn any money while sitting about and there is PLENTY of that with container work.
Personally, I think if you fancy that work you are better off working as a driver for one of the big companies. All the best.
skipton building society are offering 1.75% at the minute for factoring. i quit mine june last year and am just now getting back on my feet having caught up with almost everyone i owe. i would avoid it unless of course you have no option.
yorkshireborn:
skipton building society are offering 1.75% at the minute for factoring.
Sounds cheap. Does that include invoice insurance as well ?
yorkshireborn:
i quit mine june last year
Factoring agreement or business?
yorkshireborn:
and am just now getting back on my feet having caught up with almost everyone i owe. i would avoid it unless of course you have no option.
yorkshireborn:
skipton building society are offering 1.75% at the minute for factoring.
Sounds cheap. Does that include invoice insurance as well ?
yorkshireborn:
i quit mine june last year
Factoring agreement or business?
yorkshireborn:
and am just now getting back on my feet having caught up with almost everyone i owe. i would avoid it unless of course you have no option.
paul b:
it really is a no brainer, basically the best money you’ll ever spend.
I honestly can’t see it. Paying 3% for 2 months credit is even dearer than most credit cards, and the thought of paying out 3 grand or more each year for short term credit doesn’t sit well with me at all. I would much rather make sure the business is properly capitalised in the first place and have the extra 3k profit.
Paul
totaly agree with you repton.
i have worked for several different customers over the last 7 yrs waiting 30 & 60 days for payment
never had to factor never will as everyone will agree the job is tight enough without giving 3.4.5% away off
your profit
mmmmmmmh. never say never hawkster!!! unlike one individual who lived at home with his mummy for the first 5 or so yrs, was in a bettter situation than a lot even if it was just for your mummy to make your snap for ya on a morning ,
i think you know him hawkster who i am on about!!! he lived at home had a new truck and had no bills to pay apart from £20 board a month!! and even then his mum used to give him £10 a week pocket money as well,so yep some lucky ones may never need to factor and some poor ckufs may never be able to get away from the factoring side!!!
) but it seems possible if you just want to earn a drivers wage…
