Goaty:
Hardly a sweeping statement, merely a comment based on experience.
Your figures leave no room for "what if’s? "
Punctures, stone chips parking fines etc…
9 mpg every mile is highly commendable but imho unrealistic for general Haulage at 44tn, let us all hope you never lose this customer.
The profit = wages thing is also tripe. Costings should cover everything, including wages with a profit tagged on. What’s the point otherwise? Haulage is a business not a hobby.
9+ mpg is what we are getting on the same mixture of 44t work and some lighter loads that we were lucky to get 8mpg out of the last Stralis we had but is an actual operating figure.
My costings are spot on for our operation(costings = costs). Revenue is a different matter, as I said in my previous post we do not get £1.50 a mile so the revenue figures are to show what our profits would be at those rates.
Regarding profit and wages I do not think you understand the position of an owner operator sole trader, the difference between total operating costs and revenue is profit. To call part of it wages and part of it profit is merely semantics and as we have no major maintenance(other than the items you mention) or replacement vehicle costs then profit is wages, if I want to put aside some of those wages and call it something else is neither here nor there.
Haulage is a business and I have been doing it for thirty years but I am now retired and leave the work to my son(partnership) but still do the books for him, that is why there are some we’s and some I’s in my posts.
If we ever did lose this customer then I think my son would probably try and walk away from the industry altogether, the state that it is in today.
Profit is wages for a sole proprietor, but only if you see your business as a job.
As an asset based business and not a job wages obviously needs to be factored in to any equation, but you also need to make a profit, this way you can reinvest profit into the business and lower tax liabilities into the bargain.
I did it a different way still, instead of paying myself a set wage (which I did as it makes accounts a bit easy) I focused on a set figure each month that I wanted to have as nett profit, once I had that in the business account I withdrew the rest and I added it to my personal stash.
I liked this method as it meant I could budget for expansion more effectively, using the first lorry to buy the second, the second to buy the third etc etc etc.
newmercman:
Profit is wages for a sole proprietor, but only if you see your business as a job.
As an asset based business and not a job wages obviously needs to be factored in to any equation, but you also need to make a profit, this way you can reinvest profit into the business and lower tax liabilities into the bargain.
I did it a different way still, instead of paying myself a set wage (which I did as it makes accounts a bit easy) I focused on a set figure each month that I wanted to have as nett profit, once I had that in the business account I withdrew the rest and I added it to my personal stash.
I liked this method as it meant I could budget for expansion more effectively, using the first lorry to buy the second, the second to buy the third etc etc etc.
Many ways to skin a cat…
I would agree with you in that there are many business models, ours has always been to make a living and I think many Owner Operators are the same.
We are not an asset based business, basically we own next to nowt.
We have no expansion plans, have negligible assets so I would be interested to know how we could reduce our tax liabilities by reinvestment in the business.Our only assets are peripherals such as computers etc and I see no point in replacing things for the sake of it to save a little tax, believe me everything that can be remotely construed as a business asset or expense is claimed for.
I don’t advocate spending money to save paying tax. I’m in business to make money and I’d rather pay the taxman his cut and keep the rest than buy something I don’t need just to avoid a tax bill, the taxman takes a percentage, the rest is mine.
In an asset based business there are things that need to be bought to keep it going, tools, tyres, a respray etc, in your business all of that is encompassed by your monthly payment, so your tax bill is what it is. In an asset based business you claim for all of that and you can manipulate it a bit so you make purchases at the right time so you get the tax break on them almost immediately, thereby improving cash flow.
Like buying a complete set of trailer tyres, buy them at the end, not the beginning of a tax year and you get the allowance 12 months sooner.
Goaty:
Hardly a sweeping statement, merely a comment based on experience.
Your figures leave no room for "what if’s? "
Punctures, stone chips parking fines etc…
9 mpg every mile is highly commendable but imho unrealistic for general Haulage at 44tn, let us all hope you never lose this customer.
The profit = wages thing is also tripe. Costings should cover everything, including wages with a profit tagged on. What’s the point otherwise? Haulage is a business not a hobby.
9+ mpg is what we are getting on the same mixture of 44t work and some lighter loads that we were lucky to get 8mpg out of the last Stralis we had but is an actual operating figure.
My costings are spot on for our operation(costings = costs). Revenue is a different matter, as I said in my previous post we do not get £1.50 a mile so the revenue figures are to show what our profits would be at those rates.
Regarding profit and wages I do not think you understand the position of an owner operator sole trader, the difference between total operating costs and revenue is profit. To call part of it wages and part of it profit is merely semantics and as we have no major maintenance(other than the items you mention) or replacement vehicle costs then profit is wages, if I want to put aside some of those wages and call it something else is neither here nor there.
Haulage is a business and I have been doing it for thirty years but I am now retired and leave the work to my son(partnership) but still do the books for him, that is why there are some we’s and some I’s in my posts.
If we ever did lose this customer then I think my son would probably try and walk away from the industry altogether, the state that it is in today.
Splitting hairs? Perhaps.
I stand by my previous post.
When I price a job I do so with a profit margin AFTER allowing for a drivers wages. I did this ever since running more than one vehicle. I’m now back to one again but still price jobs in the same fashion.
£130 per day plus nights out. These I view as a standing cost, not a nice idea if it happens.
Goaty:
Hardly a sweeping statement, merely a comment based on experience.
Your figures leave no room for "what if’s? "
Punctures, stone chips parking fines etc…
9 mpg every mile is highly commendable but imho unrealistic for general Haulage at 44tn, let us all hope you never lose this customer.
The profit = wages thing is also tripe. Costings should cover everything, including wages with a profit tagged on. What’s the point otherwise? Haulage is a business not a hobby.
9+ mpg is what we are getting on the same mixture of 44t work and some lighter loads that we were lucky to get 8mpg out of the last Stralis we had but is an actual operating figure.
My costings are spot on for our operation(costings = costs). Revenue is a different matter, as I said in my previous post we do not get £1.50 a mile so the revenue figures are to show what our profits would be at those rates.
Regarding profit and wages I do not think you understand the position of an owner operator sole trader, the difference between total operating costs and revenue is profit. To call part of it wages and part of it profit is merely semantics and as we have no major maintenance(other than the items you mention) or replacement vehicle costs then profit is wages, if I want to put aside some of those wages and call it something else is neither here nor there.
Haulage is a business and I have been doing it for thirty years but I am now retired and leave the work to my son(partnership) but still do the books for him, that is why there are some we’s and some I’s in my posts.
If we ever did lose this customer then I think my son would probably try and walk away from the industry altogether, the state that it is in today.
Splitting hairs? Perhaps.
I stand by my previous post.
When I price a job I do so with a profit margin AFTER allowing for a drivers wages. I did this ever since running more than one vehicle. I’m now back to one again but still price jobs in the same fashion.
£130 per day plus nights out. These I view as a standing cost, not a nice idea if it happens.
69000m/a gives revenue of…£103500 giving a profit of £38150
80500…£120750…£48788
2000…£138000…£59425
OR
At £1.50/mile
69000m/a gives revenue of…£103500 enabling a wage of £30000p/a and a profit of £8150
80500…£120750…£30000p/a and a profit of £18788
92000…£138000…£30000p/a and a profit of £29425.
