New operator, advice appreciated

This is my first post and in the beginning, I would like to thank everyone for having me here.

I & my friend are about to enter the industry on the owner/driver basis starting with 1 lorry.
I am an accountant by trade and my friend is a lorry driver with more than 30 years of experience around EU and for the last decade within the UK.
We have very helpful friends who are in the business and can make some dough to pay the bills. Definitely better than what they had in the employment (The contract they had was circa. 30k gross/year tops. About 1.9k cash in hand/month.)

As an accountant, I am privileged to have an access to some data, however, I would still like to have a second opinion on few matters.
I got some digging, rang a few companies, put the tables together & been reading the forum for the last few days.
As a payback to the community, I will be sharing some actual figures here and I hope I could get something back from the community as well.

A. Revenue (the money coming in net of VAT)
Tipper (Volvo FM480 2016 plate on the HP) in the first 12 months generated 130k net of VAT (156k gross).
Burning 27k of fuel.
All insurances & licenses added up to 8k (including FORS audit)
The company had a driver which took a salary of 30k gross
Paid the HP for lorry of 26.4k

Summing up after 12months was left with 23k of pure profit before interest and tax.
No capital introduced by the director has bene repaid.

1. What is your average profit before interest and tax generated by 1 lorry?

I rang Sitra and was advised that their subbies get 2k/week. Which I believe will not be enough to pay for the petrol. ?!

The above example relates to tipper, however, after talking with the friend in the freight business he mentioned that his lorry is burning 1.2 of fuel (net of VAT.)/week.
That adds up to 62.4k a year which seems really high.

2. What is the average cost of fuel burned by the Arctic which is on the road for as long as 1 driver can drive within a week?

B. Finding Jobs. I rang few companies advertised as freight forwarders and none of them told me that they have regular work to keep a lorry on the road for a whole week.
I believe I did not research the topic properly yet, however, I would really appreciate if you could give me some advice on whether
3. Should I look for a logistic company, a freight forwarder? Or maybe is it someone else I need? (yeah I know - the direct customer is the answer, however, I do not know how to get in there yet.)

4. Is it possible to have the loads lined-up? Or do I need to ring everyone I been in touch with in the area regarding opportunities after unloading?

The last one seems quite simple, on the forum people advertise parking spaces 35/week 50/week 75/week.
5. Is this a place meant to be used as a parking only or could I register my O-licence on one of these places?

First mistake in my opinion and I’m sure you will get loads. Is buying a truck on hp should of brought a second hand truck out right less headache if it goes ■■■■ up.

But on average from what I’ve found truck drivers before any bills come out. Earn anywhere between 2 to 3k depending on area and what licences you hold.

I.e

Hiab
ADR
Waste carriers licence

Some prefer to go on a day rate comepared to pay per mile.

Then you gotta think transport manager cpc if you have or friend has great if not that will cost you around 400 per month for one.

And parking yes you can register your o licence as parking your truck their and I’m sure it has to be advertised as parking their so residents know about it.

My advise would be to find your own work it’s better ring maybe one firm sub out to them and sign up with a few for backloads. The backloads will hopefully at least pay for your fuel.

Best person to speak to is harry monk

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Trucks run on diesel NOT petrol,
“I see trouble ahead”!!![emoji52]

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Luke_7ucas:
…I rang Sitra and was advised that their subbies get 2k/week. Which I believe will not be enough to pay for the petrol. ?!

:laughing: :laughing: …as Big truck has said, trucks run on diesel NOT petrol! If you are working your costing’s on the price of PETROL then they may be a tad out!! :open_mouth: :wink:

Good luck with your endeavour.

bullitt:

Luke_7ucas:
…I rang Sitra and was advised that their subbies get 2k/week. Which I believe will not be enough to pay for the petrol. ?!

:laughing: :laughing: …as Big truck has said, trucks run on diesel NOT petrol! If you are working your costing’s on the price of PETROL then they may be a tad out!! :open_mouth: :wink:

Good luck with your endeavour.

I am glad that out of 542 words you and your friend managed to comprehend 1 word. Altogether.
But thanks anyway. Keep up the good work.

Dannyboy84:
First mistake in my opinion and I’m sure you will get loads. Is buying a truck on hp should of brought a second hand truck out right less headache if it goes ■■■■ up.

But on average from what I’ve found truck drivers before any bills come out. Earn anywhere between 2 to 3k depending on area and what licences you hold.

I.e

Hiab
ADR
Waste carriers licence

Some prefer to go on a day rate comepared to pay per mile.

Then you gotta think transport manager cpc if you have or friend has great if not that will cost you around 400 per month for one.

And parking yes you can register your o licence as parking your truck their and I’m sure it has to be advertised as parking their so residents know about it.

My advise would be to find your own work it’s better ring maybe one firm sub out to them and sign up with a few for backloads. The backloads will hopefully at least pay for your fuel.

Best person to speak to is harry monk

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Hi Dannyboy84, thank for pointing the things out. Some things might seem simple or obvious but before one can see them as such he needs to be aware of their existence.
Starting with the lorry. It’s been thought through and due to our limited resources we will have to go the leasing route. Maybe with the second lorry, we will be able to afford a purchase.
Taking the average between 2-3 over 52 weeks is 130k as mentioned above, thus the biggest concern is the amount of fuel burned, but this depends on the type of the license I will be applying for.
I am still in the process of analysis which license will suit best. This probably depends on the contact I find.
As you mentioned TM CPC will be done by me. Always saves few quid down the line.

In regards to finding work, I will start with analysis work from the bottom of the chain: Maritime, Wincanton, Gold Star. That should give me a rough idea who shouldn’t I work for and what rates are to be avoided.

Harry Monk seems like a legend here. I saw people mentioning him in quite a few posts :open_mouth:

Maritime i wouldn’t bother with them their pay is poor, same for gold star and I work for Wincanton and there pay is about average. I’d look at small local firms to where you live and sub out to them or find a unique market and corner it. All depends on area you live.

I.e

Farms
Food depots that distribute food to supermarkets.
(Gist, Morrisons, Tescos, and such).
If adr then look at maybe. (Boc).
U need something thAt others ain’t doing.

But I’d definitely sign up for backloads for some companies.to cover fuel. And costs.

And get two fuel cards and play them against each other to get prices cheaper.

Or even a credit card linked to company account as their monthly payments where as fuel cards every 14 days I think.

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But remember the ones that advertise for subbies ain’t worth pulling for why you think they advertise. I’d ring Agee companies and see what’s going on.

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Luke_7ucas:
…I am glad that out of 542 words you and your friend managed to comprehend 1 word. Altogether.
But thanks anyway. Keep up the good work.

:laughing: :laughing: :laughing: … Developing a sense of humour will help you as well! :wink:

bullitt:

Luke_7ucas:
…I am glad that out of 542 words you and your friend managed to comprehend 1 word. Altogether.
But thanks anyway. Keep up the good work.

:laughing: :laughing: :laughing: … Developing a sense of humour will help you as well! :wink:

Now your asking for miracles,
He is an Accountant after all!!! :laughing:

Another blind leading the blind o/d thread , it’s not 2 months since dannyboy84 was asking similar questions as the op . :unamused:

I’m confused. Are the figures quoted real, or projected? One tipper with one driver turning over £130k, yet only using £27k of fuel? And paying the driver £30k gross, so remove employers NHI contributions isn’t a huge wage for a driver who can turn over that much ? Over a 48 week year?

Luke_7ucas:
Harry Monk seems like a legend here. I saw people mentioning him in quite a few posts :open_mouth:

Don’t believe everything you read on TruckNet. :wink:

coiler:
I’m confused. Are the figures quoted real, or projected? One tipper with one driver turning over £130k, yet only using £27k of fuel? And paying the driver £30k gross, so remove employers NHI contributions isn’t a huge wage for a driver who can turn over that much ? Over a 48 week year?

If he’s working for himself, he won’t be getting four weeks off a year! :wink:

The OP did say:

Tipper (Volvo FM480 2016 plate on the HP) in the first 12 months generated 130k net of VAT (156k gross).
Summing up after 12months was left with 23k of pure profit before interest and tax.
No capital introduced by the director has bene repaid.

So with all that profit, he can pay himself some more…

Heck with that level of profit, I’m off to buy a tipper myself.

Sorry can’t help you OP, I don 't drill my figures down that far. FWIW, I work on wage and fuel costs coming to 50% of price charged. That simple calculation has kept me solvent for 26 years.

Thank Dannyboy84, this is exactly what I was missing.

Big Truck:

bullitt:

Luke_7ucas:
…I am glad that out of 542 words you and your friend managed to comprehend 1 word. Altogether.
But thanks anyway. Keep up the good work.

:laughing: :laughing: :laughing: … Developing a sense of humour will help you as well! :wink:

Now your asking for miracles,
He is an Accountant after all!!! :laughing:

I am learning guys! It’s called British humor. Might not be commonly known in this country :laughing:

Punchy Dan:
Another blind leading the blind o/d thread, it’s not 2 months since dannyboy84 was asking similar questions as the op . :unamused:

Then I believe that Dannyboy84 he needs an appreciation since he made it. It’s even more interesting if he made it with comments like yours.
So far the “blind” was the only one to provide an advice worth noting down.

coiler:
I’m confused. Are the figures quoted real, or projected? One tipper with one driver turning over £130k, yet only using £27k of fuel? And paying the driver £30k gross, so remove employers NHI contributions isn’t a huge wage for a driver who can turn over that much? Over a 48 week year?

Figures are real.
If you want to be picky there might be an additional month worth of fuel which is not included, depends on how his fuel cards are charged. (I don’t remember from to top of my head tbh.)
This company is quite particular, as it’s not the main source of income for the owner.
The mentioned driver works on a day rate. When the driver is not at work the owner drives.
It would be too complicated to identify how many days the lorry was driven by the owner.
The 30k is the amount that was paid to the driver. (This guy is not the owner.)

In answer to your question that 30k is not much in the long run for the driver.
Yes, you are right, but from the company perspective, it’s good.

Harry Monk:

Luke_7ucas:
Harry Monk seems like a legend here. I saw people mentioning him in quite a few posts :open_mouth:

Don’t believe everything you read on TruckNet. :wink:

What would your best advice on finding work? Oh, might sage.

albion:

coiler:
I’m confused. Are the figures quoted real, or projected? One tipper with one driver turning over £130k, yet only using £27k of fuel? And paying the driver £30k gross, so remove employers NHI contributions isn’t a huge wage for a driver who can turn over that much ? Over a 48 week year?

If he’s working for himself, he won’t be getting four weeks off a year! :wink:

The OP did say:

Tipper (Volvo FM480 2016 plate on the HP) in the first 12 months generated 130k net of VAT (156k gross).
Summing up after 12months was left with 23k of pure profit before interest and tax.
No capital introduced by the director has bene repaid.

So with all that profit, he can pay himself some more…

Heck with that level of profit, I’m off to buy a tipper myself.

Sorry can’t help you OP, I don 't drill my figures down that far. FWIW, I work on wage and fuel costs coming to 50% of price charged. That simple calculation has kept me solvent for 26 years.

Thank you for your comment about costing, it might give me some insight upon my later analysis.

The only money owner took was a bonus with no significant importance either to the company or himself.
Analyzing the operation itself of this company might be a bad idea as there is not much drive for profit since the start.
70k was thrown in. The truck was taken, and it drives. What it generates it generates. That’s all.

The main thing I am trying to analyze whether is it better to go with the tipper or hauling the loads.

And tbh I don’t really see it viable for 1 lorry to make a living for two people.

Luke_7ucas:
Thank Dannyboy84, this is exactly what I was missing.

Then I believe that Dannyboy84 he needs an appreciation since he made it. It’s even more interesting if he made it with comments like yours.
So far the “blind” was the only one to provide an advice worth noting down.

Thank you for your comment about costing, it might give me some insight upon my later analysis.

The only money owner took was a bonus with no significant importance either to the company or himself.
Analyzing the operation itself of this company might be a bad idea as there is not much drive for profit since the start.
70k was thrown in. The truck was taken, and it drives. What it generates it generates. That’s all.

The main thing I am trying to analyze whether is it better to go with the tipper or hauling the loads.

And tbh I don’t really see it viable for 1 lorry to make a living for two people.

Are you talking work in the UK BTW? I am confused since your comment on our humour - glad you are picking it up :wink:

TBH, the only way of making money is to get your own customer direct; if you can’t do that then it’s down to what rates you can get from forwarders or firms subbing out. My dad did tipper work and it was never the best paying, not aware that it’s changed. No one can actually answer your question without knowing every variable and even then something will come along and blindside you. Usually 5 minutes after you think everything’s going well today…

You can make a living out of a lorry here in the UK ofr one person, very very rarely two.

Punchydan was pointing out that Danny was asking similar questions to you in April of this year - I’m not sure if he’s started out on his own yet and if he has, then a couple of months is not the definition of made it. And Dan qualifies as an experienced operator.

All the tipper OD’s I’ve spoken to a barely scraping through…

What would your best advice on finding work? Oh, might sage.

Well, when I started, I was hoping to be able to pick up exhibition and roadshow work, something I had a lot of experience of doing. And I had subcontracting in place to fill in the gaps. Bread and butter with some jam.

About the time I put in my O licence application, I spoke to a long-standing friend who was doing this type of work. He said “At the moment it’s still all British trucks doing it, but the first time anyone uses eastern Europeans, they’ll all start doing it”.

Well, guess what? In the time it took my O licence to come through, he did an exhibition in Amsterdam and said “There are eight Polish trucks here”, and at the next one he said “half of the trucks here are eastern European”, and within another month he was virtually the only British driver left on the job. Then my O licence came through.

So I did the subbing for four years, but there wasn’t enough more in it to make it any more financially rewarding than working as an agency driver, with a lot more aggravation. VATman, bank manager, accountant, VOSA blah blah blah. Every Saturday morning a mountain of mail to open and deal with. As I’ve said before, I don’t regret running my own truck and I learnt a lot from it, I just decided it was time to move on to a new chapter, which has been the ever-evolving story of my life really.

I don’t know what advice I could give you about sourcing highly paid work, because if I knew that, then I would be doing it myself, but I will wish you the best of luck with your venture and whatever you decide to do. I will honestly try to answer any question you have, but I can only repeat that the long-held answer to the question “How do you make a small fortune in haulage?” is “Start with a large one”.

Best of luck.

albion:

coiler:
I’m confused. Are the figures quoted real, or projected? One tipper with one driver turning over £130k, yet only using £27k of fuel? And paying the driver £30k gross, so remove employers NHI contributions isn’t a huge wage for a driver who can turn over that much ? Over a 48 week year?

If he’s working for himself, he won’t be getting four weeks off a year! :wink:

The OP did say:

Tipper (Volvo FM480 2016 plate on the HP) in the first 12 months generated 130k net of VAT (156k gross).
Summing up after 12months was left with 23k of pure profit before interest and tax.
No capital introduced by the director has bene repaid.

So with all that profit, he can pay himself some more…

Heck with that level of profit, I’m off to buy a tipper myself.

Sorry can’t help you OP, I don 't drill my figures down that far. FWIW, I work on wage and fuel costs coming to 50% of price charged. That simple calculation has kept me solvent for 26 years.

There will certainly be 52 or more, weeks’ worth of effort put into running this business, but there most definitely will not be 52 or even 48 weeks’ worth of revenue coming in, not even if someone has found the holy grail. Vehicle downtime, sickness and slack periods dictate that standing costs need to be aportioned to a lower figure for the purpose of working out profitability.

On bulk I would work on averaging 2200 per week if working a stubby! You will have better weeks and worse weeks!
Fuel between 750 and 1000 per week

We were in a similar situation 12 months ago. We dipped our toe in the water by hiring a tractor unit and trailer from last July. Until the end of the month. We turned over money but did we make anything, not really and include into that that we had 1/3 own account work.

We have since bought a 10 year old fh and only do our own account work! That should tell you all you need to know

James

Good point cav!