Constructing a personalized profit plan is one of the most important things that an owner-operator can do. This is your roadmap to financial success. A profit plan consists of two main items: revenue, and expenses.
When determining revenue for a client, we run through quite a few different pieces of information that help give us a complete picture. We start by determining the number of miles a client thinks they will run on any given month. We then use their rate per mile to give us a good starting point. Other factors like fuel surcharge and miscellaneous pay will allow us to determine total revenue.
Once we have determined the kind of revenue your business expects to make, it’s time to talk about the expenses you will encounter. Things like your truck payment, truck insurance, licenses, permits, and FHUT are all fixed expenses. These are things that you pay for whether or not your truck is running.
In addition to fixed expenses, there are also variable expenses that can fluctuate from month to month. Things like fuel, maintenance, and fuel taxes are all examples of variable expenses.
Once we have helped you put together your profit plan, you will know exactly how many miles you need to run each month in order to break even. Once you hit your break-even point, from there it’s all profit in your pocket.
It’s a good idea to review this profit plan several times throughout the year to see how you’re doing and make sure your numbers haven't changed. Are you making enough money to pay your quarterly tax estimates? Have you saved enough for that vacation you’ve been planning? Are you running the miles you thought you would? All of these are questions you should be asking yourself on a regular basis.
If you haven’t created a profit plan for your business yet, call ATBS to get started. Your assigned business consultant will walk you through all the things that help make up your monthly revenue and expenses and guide you to higher profitability.