I’m trying to establish the true costs of starting up a transport business (OD) Basically everything you need to fork out for before you get money in
I have the following:
C Licence
C+E Licence
CPC (driver and oppo)
Medical
Vehicle hire/lease
Trailer hire/lease
Parking costs
O licence admin
Maintenance margin
PPE/Uniform/Workwear
Diesel
Adblue
Any more to add?
Truck insurance
Public liability
GIT insurance
Work place pension (for oppo )
Bank charges, accountant, mobile phone, internet blah blah blah. I reckon you’d need an absolute minimum of £25,000 to start up using a leased truck and being paid on 30 day terms on a one vehicle licence.
Salary/wages. It’ll be at least four weeks before anyone pays you so you need to factor in a couple of grand for the driver. You might be able to ride out your own pay for a few weeks.
£39,370.93 - Thats the price I am working on based on spending £20k outright on a used unit. Once I have that in the bank I go looking to get started. Given the six month average wait for an o-licence Ill have enough time to put away the money for things like operating margin, saving a bit for diesel costs etc.
That includes the following:
The unit - something like a 2010/60 Axor 6x2 with half a million under the wheels.
A cheap sliding skelly from the likes of Ryders and a bit of elbow grease from myself to make it good. I include the cost of all six tyres, paint stripper, hammerite, brushes and an MOT.
1 x 2kg, 2x 6kg dry powder fire extiguishers.
RHA ADR kit which includes the orange coloured plates x2.
LQ folding diamonds x2.
O-Licence Application
O-Licence isssuing cost.
8-weeks Operating Centre costs at Sheffield J31 secure parking.
1 year VED.
Insurance including PLI and GIT. - GIT at £6500 per tonne. May be a little more when you add on ADR if you are going to carry that.
Blue Estate said about a workplace pension. Auto Enrollment rules mean you have to match your employees contribution so anywhere between 1 and 5% of salary.
A few other things:
26 10m ratchet straps.
26 corner protectors.
In vehicle Height indicator
2 accident kits.
Container Bulldog Lock - will do tauts, boxes and fridges.
Optional extras of:
Amber beacon bar.
2500w inverter.
If you are leasing rather than buying you will save at least 18k on your initial purchase prices for unit and trailer but have ongoing costs.
You will also need to account for things like:
Circa £1k a week for diesel between first job and first payment, so possibly £5k in motion lotion and adblue.
Drivers salary - if you are putting a driver in it you will be looking at about £800 a week, if you are doing it yourself then its a lot cheaper because you just take a directors salary and pay yourself a dividend when the company has the money.
Running repairs - Tyres etc.
The £7.5k you have to keep in the account to cover big problems to get your o-licence.
These numbers are inclusive of VAT because you won’t be able to get the money back from HMRC for quite a while. When it does come back though its going to be at least £5k so a nice chunk of change.
To address Harry Monks little list:
Bank charges - Barclays Business £9p/m, free for the first 12 months.
Accountant - between 150 and 350 a month depending on who you go with.
Mobile - Use your own perhaps. If not Tesco Mobile do a sim only deal at £25 p/m which includes 25gb of 4G data. That will cover your internet use too.
Don’t forget that you have to have a minimum of £6,650 in your bank account, or access to that amount,for a one vehicle O licence, and £3,700 for each additional vehicle at all times. The TC will almost certainly require you to produce your second month’s bank statements (i.e. after you have had two months of outlay without your first income payment).
If you were to use 26 straps you may need 52 corner protectors rather than the 26 stated .
Does it really take 6 months to be granted an o license? How much does applying for an interim licence speed things up by?
I’m looking in to setting up with a couple of partners and i didn’t realise the process took so long.
I’ve noticed online there are companies who can help with the application for a fee, are these worth the outlay and does anyone have any recommendations?
Punchy Dan:
If you were to use 26 straps you may need 52 corner protectors rather than the 26 stated .
You make a fair point, add about another tenner to the number.
Work place pension won’t apply to him as he’s self employed
Harry Monk:
Don’t forget that you have to have a minimum of £6,650 in your bank account, or access to that amount,for a one vehicle O licence, and £3,700 for each additional vehicle at all times. The TC will almost certainly require you to produce your second month’s bank statements (i.e. after you have had two months of outlay without your first income payment).
Does this have to be in a bank account or is cash any good.
m_attt:
Harry Monk:
Don’t forget that you have to have a minimum of £6,650 in your bank account, or access to that amount,for a one vehicle O licence, and £3,700 for each additional vehicle at all times. The TC will almost certainly require you to produce your second month’s bank statements (i.e. after you have had two months of outlay without your first income payment).Does this have to be in a bank account or is cash any good.
I don’t know, but don’t see how you could prove you had the cash?
I was granted a interim licence straightaway because I was moving operating centre but its been three months now and still running under it .As for the cash needed for each vehicle when I started years ago they accepted credit cards as money for .But things may have changed
Harry Monk:
m_attt:
Harry Monk:
Don’t forget that you have to have a minimum of £6,650 in your bank account, or access to that amount,for a one vehicle O licence, and £3,700 for each additional vehicle at all times. The TC will almost certainly require you to produce your second month’s bank statements (i.e. after you have had two months of outlay without your first income payment).Does this have to be in a bank account or is cash any good.
I don’t know, but don’t see how you could prove you had the cash?
Put it in a briefcase and slap it on the TC’s desk? As far as I’m aware, credit cards can count towards this money
I thought it was 9 weeks, not 6 months?
UncleJoe:
I thought it was 9 weeks, not 6 months?
Mine took six months from start to finish but this included getting the CPC. The actual application took 10 weeks.
UncleJoe:
I’m trying to establish the true costs of starting up a transport business (OD) Basically everything you need to fork out for before you get money inI have the following:
C Licence
C+E Licence
CPC (driver and oppo)
Medical
Vehicle hire/lease
Trailer hire/lease
Parking costs
O licence admin
Maintenance margin
PPE/Uniform/Workwear
Diesel
AdblueAny more to add?
Hows about finding the work first, then deciding what type of truck/trailer you will need to suit the work most cost effectively. then you can average your diesel costs per month, cos to do it beforehand is pure guess work. I can assure you whatever figure you arrive at to operate a truck business, the true cost will be much much more
nsmith1180:
£39,370.93 - Thats the price I am working on based on spending £20k outright on a used unit. Once I have that in the bank I go looking to get started. Given the six month average wait for an o-licence Ill have enough time to put away the money for things like operating margin, saving a bit for diesel costs etc.That includes the following:
The unit - something like a 2010/60 Axor 6x2 with half a million under the wheels.
A cheap sliding skelly from the likes of Ryders and a bit of elbow grease from myself to make it good. I include the cost of all six tyres, paint stripper, hammerite, brushes and an MOT.
1 x 2kg, 2x 6kg dry powder fire extiguishers.
RHA ADR kit which includes the orange coloured plates x2.
LQ folding diamonds x2.O-Licence Application
O-Licence isssuing cost.
8-weeks Operating Centre costs at Sheffield J31 secure parking.
1 year VED.
Insurance including PLI and GIT. - GIT at £6500 per tonne. May be a little more when you add on ADR if you are going to carry that.Blue Estate said about a workplace pension. Auto Enrollment rules mean you have to match your employees contribution so anywhere between 1 and 5% of salary.
A few other things:
26 10m ratchet straps.
26 corner protectors.
In vehicle Height indicator
2 accident kits.
Container Bulldog Lock - will do tauts, boxes and fridges.Optional extras of:
Amber beacon bar.
2500w inverter.If you are leasing rather than buying you will save at least 18k on your initial purchase prices for unit and trailer but have ongoing costs.
You will also need to account for things like:Circa £1k a week for diesel between first job and first payment, so possibly £5k in motion lotion and adblue.
Drivers salary - if you are putting a driver in it you will be looking at about £800 a week, if you are doing it yourself then its a lot cheaper because you just take a directors salary and pay yourself a dividend when the company has the money.
Running repairs - Tyres etc.
The £7.5k you have to keep in the account to cover big problems to get your o-licence.These numbers are inclusive of VAT because you won’t be able to get the money back from HMRC for quite a while. When it does come back though its going to be at least £5k so a nice chunk of change.
To address Harry Monks little list:
Bank charges - Barclays Business £9p/m, free for the first 12 months.
Accountant - between 150 and 350 a month depending on who you go with.
Mobile - Use your own perhaps. If not Tesco Mobile do a sim only deal at £25 p/m which includes 25gb of 4G data. That will cover your internet use too.
Smith, how long are you planning on taking to save this 40k start up? I ask , as I don’t think I’ve met many folk who are good at accumulating big chunks of money.
With regards to your ops licence, you’ll AV it in three weeks if you’ve no criminal record or embarrassing questions to answer?
With regards to all your sundries, to be honest, you’ll AV collected all stuff like straps, corner boards. Paints etc, no doubt your scavenging all you can already.
You’ll do well to be paying £350 a month on an accountant, more like £500 annually.
With regards the unit purchase, try an alternative route, as your only prolonging startup by two years whilst you save your 20k, in fact if you were starting this month, I’d give you my iveco that’s spare and I’m never gonna use. Try every and all scenarios.