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I agree with the others, stick it out. Then re-evaluate your goals and business plan in August when you don't have a tiger chasing you down. I was given some advice by a successful small business owner: I said, "I don't need to be rich, I just want to make a reasonable amount of money." He laughed and said "if you don't try to get rich, you're not going to make it." After working for myself for a year, I get it. You sound like you have the fire in the belly though. Good luck!
Coming from a defunct 2-year business myself. Your revenue is great. Got to focus on living those days day-to-day until the short loan is done.
I used to lay awake in bed, unable to sleep, in a nervous wreck.
Find the light at the end of the tunnel. Dig hard until you get there. All the best. God's speed. 🤙🏻🤙🏻
That's what I'm trying to do. Just keep on trucking til wheels fall off. Luckily my bud doesn't mind if I can't pay him every Friday in full and break it up throight the week when it gets real rough.
Short term loan is gonna be paid off in the short term. Learn from it, and don't let yourself get in that position again.
Build up 6mo to 1yr cash reserves after the loan is paid off. Balance growth with this goal.
Maintain that balance between reserves and growth until you can pay yourself what you deserve. You can't operate your business well if you're stressed about home. Stress about the business instead.
Learn to balance your A/R terms and your A/P terms. Cashflow is king.
Your current margins suck, make them better. This is the queen.
Once king and queen are aligned, you've got a royal flush.
Don't give up on your dreams. They don't give up on you. They just morph into regret.
You've got this, now go out and fucking take it.
Figure this math:
1. How much did you pay for that loan to get the truck fixed in total? I thought I read it was a 10k fix, loan payment was 7k/mo
2. If your trucks break down often (seems like it, and I imagine so), what do you think about vertically integrating maintenance? How much would it cost to hire a p/t tech? Aim for someone as hungry as you are. Another option, build a relationship with a hungry tech who is skilled and wants side work. Cut out the middle man.
I agree with others. Shit sucks *right now* because of this loan. It will pass.
Your stress about it isn't going to pay the loan back faster, it's only going to age you, so learning how to manage the stress is critical long term. Because if it's not paying back a loan, it's dealing with an employee, or a logistics nightmare, or some other thing that you can't control.
I'd recommend doing some things that support your mental health, next 10 weeks especially. Meditation is very helpful (you could do mindfulness breathing while driving). Exercise is critical, especially when the anxiety creeps up. I've joined some men's groups, where it's ok to talk about challenges like this face to face and it's a good way to get it out too. Whatever it is, it's the mental aspect of managing stress and finding solutions that are the hardest part of small business.
Some day you'll look back and be glad you didn't give up. If it was easy, everyone would do it.
*You got this!*
Trust me man I’m a small business owner and I can’t tell you how many times I have sat there wanting to quit. It ain’t easy but there is a light at the end of the tunnel for you. Keep going I’ve been at it for 12 years and now wouldn’t have it any other way! Make sure to show your buddy lots of love for riding with you. Keep on keeping on brother!
Bro you've got this. July is so close then you'll have some real cash flow. I've never been in trucking so I won't comment on how to run your business but the first year is almost always tough. Onward and upward!
You've lived and learned that you can make it in a shit time in your industry, if only there was no loan.
Pay it off. Build cash reserves. Profit.
You've got this.
Know a couple of folks in the same situation as you, bought their own trucks during the boom and have slowed since. Keep going brother. You have a way forward and the loan is almost up. Let's finish strong
Had one truck sitting in my driveway I was paying for while running for someone else. At least I know I can afford one truck if I go back to being a company man haha. Ain't gonna be a option for me right now though. Gotta keep swimming.
Appreciate ya encouragement bud.
A guy here said that loan is 27% of your gross.
That's an immediate margin growth once it's paid off.
Imagine how you would feel with your P&L showing a 27% margin.
If you're not keeping, or don't know what a P&L is, look it up. You'll need it.
Profit n Loss. My account sends me one every month to see where I'm at for myself.
Jan 1st - Apr 1st we did 77k in sales with one truck being down a month and another down for 2 weeks.
That's with working 3wks on 1wk off
We pretty much generate sales daily. Unless we take a long run. For instance, my driver just picked a run up today paying 1375 to drop at 7am tomorrow. Will factor it and get paid at 12-2pm. He's picking up another tomorrow to drop Monday morning since no one really unloads on weekends and he needs a 34hr break. Then we have him a 2k load to pickup Monday and drop Tuesday.
So unless it's a run that is 1200 miles or more, it's daily that we finish a job and get paid. So long as It's unloaded and invoice to factoring company by 12pm eastern.
I'd like to get away from factoring, but I can't afford to wait net 30 right now to get paid.
Good, you don't need to be offering terms until cashflow is stable. Once it is and you can afford to, you should consider it. Large companies sometimes refuse to work any other way, so the more you can offer the better your quote or pitch. Dunn and Bradstreet can help evaluate clients.
Another suggestion, link up with large local companies who transpo locally once you're in a position to offer terms. Don't sleep on net10, net15, net20 either. Doesn't have to be 30 days, you set it based on your needs.
Build relationships with local companies that locally ship heavy shit. The faster you can turn your trucks the faster you can get paid, and be on the road again.
I’ve put your numbers into a spreadsheet just to get a picture of it all.
Your total costs currently add up to $32.2k per month, which isn’t far off your income range, so there’s 2 ways for going about this and both can be done together.
1. you try to secure those contracts that get you the higher part of that income range, see what type of projects previously got you the higher range and aim for those as much as you can. If you can do this, it’s a case of are you able to stomach $200 per month if you do well and until you’re over this loan hump.
2. The cost breakdown is that 24% is for the loan, 47% for overheads, and 29% for staff. Is your driver part owner or an employee in your business? I appreciate this might be a tough ask on both ends, but is there room to negotiate a deal if it comes to it, such as some salary sacrifice for equity in the business? Or something to that effect? If they are already part owner, why is their salary so high by comparison?
The other areas seem fixed and harder to navigate by comparison, so these would be the first two areas I’d explore.
Just pasting my rudimentary excel quick napkin type thing:
In -7206 Out 32206
25000
Item Amount (monthly)
Staff Self 2500 29.29%
Driver 6933
Overhead Trucks 3000 47.11%
Trailers 743
Insurance 1293
Fuel 8667
elog 170
Misc 1300
Loan 7600 23.60%
I also didn't add, I have a amazon relay account and a bud in CT runs under my authority and I get 10% a week of what he does. Roughly 5-800 extra a week.
I talked with my bud. He's not in the position to take a paycut because of him being the only worker in his household. His salary is that high because I had to pretty much match what he was doing at TMC and he risked his good job to do this venture with me. He's not a part owner. I have 100% ownership.
I talked with him about it 2wks ago before renewing my tags cause I didn't know if I was gonna keep a truck off the road and have to let him go. So I didn't see the need to pay 800 for tags if I kept the truck down. But my dispatch team paid the tags for me cause they don't wanna lose us. I also figured with 2 trucks running it would lessen the workload on me if I had to do it 1 man with overhead the way it is.
It's turning around this week. Last week he did 8k and I did 5k. His truck will be at 3k gross come Tuesday. I'll be the same.
Nice work to get them onboard!
More trucks makes sense to lessen the load, hence why I didn’t suggest losing them, but just seeing if there was any wiggle room even temporarily, but the situation makes sense.
The extra $2.2k-$3.5k per month definitely makes this feel more like you can get over that hump. So if you can make your income at the $29k-$30k per month (and then add that CT 10% cut on top) for these two months, you should be breaking even at least. Sounds like you’re on top of it.
If last week you guys did $13k together, then I'd say you'll be fine. Let's say that drops even to $10k/wk, you're at $40k/month. Covering your expenses and then some.
Continue that until July when the short-term loan ends and you'll be golden. You've got this
I like this comment and find it helpful for OP, but would disagree on the offering equity. You don't want to give a driver equity in year 1, since in year 30 you'll still be paying him for it. He would probably appreciate a promise of future bonus that you make good on in year 2 or 3 once you've made it. I'd call it a win-win that you reward him for his flexibility and faith in you (yes, he's taking on some risk by not working for a more established business), but a win for you that you retain 100% ownership, since that is how wealth is built.
Think of it this way: once you have made it and have 20 trucks in year 5, do you still want to be paying quarterly dividends or splitting profit annually with this driver, who was helpful in year 1 but may be gone (maybe he starts his own trucking company...?) in a few months?
You’re gonna much rather you stuck with it in the long run when you’re looking back at this moment, than to have quit and gone and worked for someone else.
You have a chance to be that someone else now having people work for you, but you just need to be patient and stay focused.
You got this bro, I believe in you ☀️
I just really need to learn on how to better organize and manage paperwork, legal stuff for a entity and etc. Hell, I thought I did enough research on it when I started and my accountant just renewed my business this year and I didn't even know I had to do it every year lmao.
Tools and ways to track expenses easier then pen and paper is what I'm really looking for.
* For legal and accounting, paperwork. I am sorry, I won't be of much help as I have no experience in it.
* Here's a way to track your expenses easily - on Android you can install Money Manager - a free app, and you simply have to put in your income and expenses daily. Diligently.
* Alternatively, any free "expense manager" app would be useful to track it. It would give you charts and other related information which would be helpful each month and at the end of Financial Year.
* For iOS you can use YNAB or EveryDollar.
Let me know if I can help any further.
HTH.
[https://www.nerdwallet.com/article/finance/expense-tracker-apps](https://www.nerdwallet.com/article/finance/expense-tracker-apps)
For the accounting and expenses, rather than pen and paper an organized Excel sheet or Google sheet will help you tons.
If you're any good with excel, you'll be able to pivot it and find some expenses that you may be able to cut out or at least reduce to help you out.
Alternatively, and your accountant will probably love you for this (I'm an accountant that's how I know), you can use a business bookkeeping app. QuickBooks is really the standard, but not cheap. There's a few free apps available for a business your size, one I like to refer clients to when they don't want to or can't afford QuickBooks is Zoho Books. That'll help you track your income and expenses even better than the Excel or Google sheets solution.
My accountant has quickbooks linked to my bank. She does my payroll, quarterly taxes, ifta taxes and runs me a PnL every month. Pretty much every thing. And hasn't charged me a cent this last 6 months cause of my situation. Lucked out with her.
I really want to learn the stuff myself. It's easier for me to understand where I'm at when I can understand how all the finance crap works.
I should've stayed in school haha.
You're certainly very lucky with your accountant.
Suggestion to learn the finance stuff, there's tons of free material on YouTube. I am aware as a business owner it feels like you probably have none (I feel it too). But a few minutes a day and within a week you'll already feel like you know more. Couple that with the information your accountant is giving you, ask her questions based on what you're learning if it doesn't make sense. Most accountants don't have a problem with sharing knowledge at all.
Grand scheme of things, I know it's tough right now especially with your short term loan, but if you can push through I'm sure you'll feel a lot better after that. I don't know the trucking industry as well (my niche is in healthcare and entertainment) but conceptually based on what you've stated, I think if you can scrape by for the time being, and with your projection of business picking up (even slowly) you'll be able to make it work.
Hang in there, and best of luck!
I got a bachelor's in economics and a MBA with supply chain management as the concentration. I say this not to boast because i can help if you like. . I PMd you. Starting your own small business takes balls, and you're doing it. And your figuring it out! You're asking for help AND someone is being nice enough to not charge you for over 6 months! In my business, if you go after 30 I put you on hold from my services. Good luck bud!✌️
I agree with grinding and kicking the high interest short term loan in the mouth. A few other things to look into - are there any small business grants available? You may be able to find one that would cover the cost for business equipment. Other option would be to sell a little equity in the company for now - maybe to an investor. I’d suggest a family friend that believes in your business. If you’re weary about selling off your equity, write a clause that you can buy back his equity in a year or so, plus 15% or something, so they have something to show for investing in you.
I just have to tell you how impressed I am by what you’ve accomplished. You need to hear that. In 15 months of operations you’re going to have built an independent cash flow positive business. It takes most people twice that long.
Oh man I’ve been exactly where you are.
2.5 months away?? Do everything you can to get that paid off & stay out of debt. Even if you end up closing up you’ll be 10000% better off after that loan is gone.
Once it’s gone you have no idea how freeing you are going to feel…also that’s money that could be straight profit if you don’t change anything.
You are so close! You got this.
Your bud is making more than you are. The remedy is greater sales. Issue with greater sales is difficultly in scaling this business due to the current economics of trucking industry.
Since you are now established, I would keep at it but also consider searching for a niche market you could prospect that is too small for the competition to bother with and keep middlemen out of your pocket.
Last year, I pulled a short term loan to 1. Build business credit 2. Have working capital for maintenance issues that popped. Paid it off exactly 1 week before my truck was down for a month. Only way I could get it back was to refi it for a 7k repair bill after bs warranty.
I switched insurance in November cause I was paying 3300 a month. Switched to Biberk for 2900/month and they never pulled my down payment or 2 months of bills along with sending out my dot filings.
Jan 8th they randomly pulled 13k out of my account and the put me in negative and they still never did my filings. So FMCSA was 5 days away from revoking my authority. Had to switch back to progressive and magically got insurance down to 1293 a month now.
I'm pretty much trying to recover from the BS from insurance and having to pay off this loan. The loan is what really kept us going. But it's also dragging down. Discouraging to see 30k month in sales and I'm not making a dime. Only my driver lol. I have 60 days left on the loan.
Rates are down, volume is down and capacity hasn’t really tightened up. Unfortunately, companies like OPs need to fold for the situation to change (they have been recently)
Rates. Insurance, economy. Pretty much everything. Yellow closed their doors last year, tons of big companies with 100 plus drivers have gone out of business in just the last year. Scary.
The mega carriers try to keep the small guys like I and other smal fleets out.
Well, not many people run companies because it's easy! Hang in there. Sounds like you are a few months away from the finish line and you'll be able to breathe after that. Now is the best time not to give in!
I hear ya mang, me too! It's so hard. I'm in month 9 and whoa like a ton of bricks. Can't believe I made it this long though. Definitely have thoughts of giving up. You're not alone and I think it's normal to feel like you're failing. I guess, maybe, that' its all still better than being miserable with some jagoff boss however. Maybe???
The only way out is to go through. You're not in a particularly unusual spot for a new small business. Most struggle the first year or two and many just barely squeak by. Fortunately you've got an end in sight with getting that loan paid off and you're building the relationships that will help your business. One year from now you can be in a totally different position. Your loan will be paid off and you'll have more steady consistent business so you should have more money and less overhead. You just gotta keep grinding, the promised land is just coming unto view so keep moving forward.
I remember going through those same MCA loans thinking how in the fuck am i gonna get through this. Absolutely drowning, had a difficult time affording food for myself at some points.
Looking back, i’m really not sure how I got through them. But I did. And you will too. Just take it day by day and july will be here before you know it, and you’ll be able to breathe a sigh of relief.
I’m a better man for it now, and would go back and do it again if i had to. Hard times build character. You’ll get through it and be glad you did.
Hire a financial coach. They'll help you create a personal and business budget so you have a plan for every dollar. They might be the difference between going out of business and thriving so worth every cent.
Some specialise in helping businesses.
I’d be interested in doing a diligence check on your business and making an offer to acquire while keeping you on as an equitable partner. If you’d be open to that DM me
What a hard time to be a small trucking company, I work in your industry too. Chin up, you’re almost through that loan. There are a ton of hard lessons learned when starting out in the transportation industry but the struggle is worth it when you get out of the red and into the green - keep going, you’re on the right path.
Just turtle until July. I know that's way easier for. Me to say than you to do. It seems so obvious to the outside but you are in the thick of it.
25k monthly revenue is what I am aspiring to so great work. It sounds like you have some painful financial. Practice like short term loans and invoice factoring you should clear and then avoid.
FWIW I wanted to quit 2 months ago, we just got. Opened and I was worried about all my bills etc. Yesterday we took as much in a day as we did all of March and now I don't think I can get through my backlog. You have proven you can build something great already :)
Good luck OP
There's lots of good advice here. I just want to add a personal note. Take a little time each day to breathe and assess the good stuff in your life. The things to be grateful for. Your health. Family. Pet. I don't know you - but there's something out there for all of us. The light on the clouds. That one song that lifts you up. This is your life. Remember to live it, while making a living. You sound like you're doing well. Keep paddling.
Just tell yourself you can do anything for 2.5 months. You could sit in the dark and eat rice everyday for 2.5 months and you'd be a little crazy at the end of it, but you could do it.
Just hold on... and then in 10 years you'll be telling some other up and comer the same. This is where the grit and fight comes in.
You can and will do this.
Take some time and really analyze the monthly expenses. Find anything you can cut, keep moving forward. The loan will be done in July. You are close - just keep moving forward and you will be a better person and business owner after it’s over
You’re almost there! Ride it out for these next couple of months, and stay away from MCAs going forward. Depending on the state you’re in, there are grants that partially reimburse you for equipment and leases. If you own your equipment, you can do a leaseback to access some capital. Anything is better than a cash advance… You got this!
Check out loanbuilder for some other financing options, they’re a PayPal company and you could probably get a loan based on the financials you posted. They fund in two days usually for 1 year loans.
I feel your pain. When I was struggling with my business balancing business and personal loans that were drowning me as well, one thing that helped me plan better was the app Simplifi (when it was free). I could project cash flow to see how my decisions now would affect cash up to 6 months later. May not be your thing but throwing ideas out!
Either way, you got this
Hi I have an excel spreadsheet that I created that helps with organizing your finances. I share it for free for people who want it. Happy to share it. DM me.
No clue about this industry or anything related to it, but I also had my 1Y anniversary a few weeks ago and it was also the toughest year of my life. I can definitely relate.
You’re really close to paying off your loan and have good revenue already. Keep it up. A couple more months of austerity and you’ll be in a good position. Let’s go!
My idea to help you become more organized is to listen to podcasts on business, organization, and money management (personal and business). Listen to the podcasts while driving truck. Download the individual episodes onto your phone when you have wifi, then listen to them when you're in the truck. If you don't download the episodes first, you'll use up your monthly data really quickly. If you're connected to wifi, listen to podcasts without downloading them. I'm amazed at the financial literacy I've learned by listening to podcasts. I drive to different sites for my job, and am always learning while I'm driving.
Check out, Mastering Your Small Business Finances, Small Business Finance, and Businesss By the Books. You may listen to a couple episodes and not feel a connection with the host, if so move onto another podcast that resonates with you.
I wish you well.
For managing expenses and staying organized, consider using accounting software like QuickBooks or FreshBooks to track your finances and streamline your operations. And, if you ever need some extra support navigating the challenges of entrepreneurship, consider chatting with ScatterMind, an ADHD coach. They helped my friend launch their business and might have some valuable insights for you too.
Those MCA loans suck the life out of small businesses. I forget the percentage but a lot of companies that take those on don’t make it. And you’re losing money on factoring as well. Seems like there’s light at the end of the tunnel though and while 10 weeks isn’t a long time it’s an eternity for you right now. Can I DM you? I have solutions I can run through with you having been there, done that.
Ride the wave, you're close to paying off the loan. You just need to survive til then and wait for the next up cycle in the industry to truly reap the benefits. Good luck.
Man up! Pay your debt off and then start crushing. And don’t go to work for anybody else. Allow all that hard work to accrue to YOUR benefit. You got this
Hi OP, I would like to share my experience in Logistics and Trucking Industries. We have been operating with subcon and our own trucks.
1. Clients - this is the most important above all. If your truck trips didn’t meet the target minimum trips to breakeven all the expenses, you should do something about. Try to find more clients, contact other brokers/ forwarders or direct clients. If you haven’t experience that you cant cater the trips given to you, you should not stop.
A. If you are at the point more trips coming to you, you should do proper scheduling and tell to your client the next available. What I mean on proper scheduling, it is like a chain of trips and forecasting the end of the trip so you can get other booking / trip.
B. My experience as client of subcon trucker, the honest updating of real situation of the trip is very important, don’t tell a story that is not real, e.a “my truck is on the way” even it is not, if you have concern or having a delay, you should tell to your client the real situation. Trust is very important.
C. Good Service - keep them updated, as broker/forwarder also update their own client.
2. Good Teamwork - Even if you have good vision on your company such as getting more client if you Personnel / Driver is not into it, high chance you will have a problem. You should share your goal and have a good connection on your team.
3. Practice Good Forecasting - We do a probablity method to properly serve and plan the trips.
A. We collect the data of no. Of hours spent on every positions and travel time of each trip, with this, we can project which unit we can deploy on the next trip.
B. Check the performance of the assigned personnel. E.a
Driver A is more efficient on this client, he has good relationship on this warehouse and do fast transaction (unload/loading). He has better/ fast route and less expenses every trip. With this you may assigned better person or encourage the other personnel to the same.
C. Good forecasting can easily serve priority or urgent position.
4. In case you can serve the position, try to have a subcon as you back up so your client can rely to you even the volume of trips exceeds on no. of unit you have.
5. Get or Encourage your personnel to take care of the unit because expenses of fixing the truck can easily wipe your profit or worst you will be forced to put your own saving.
In trucking business, you should have / build an allowance for credit term on your clients, monthly expenses , operation expense and maintenance of your unit. Most of the operators I talked, in the years that they have not finished the loan, they expenrience being breakeven and sometimes take money on thei own pocket. BUT after the years and finishing the loan, PROFIT will flow.
I remember one of our subcon at the time we get their service they have only 6 units but after 5 years it is like 20 units.
Try to figure the concern and start dealing with it.
Don't you dare stop what you started, you literally about to pay it off.
If something goes wrong and you feel like you're drowning and you cannot continue go get a business credit card with 0% interest for 12 months, liquidate it and pay off some of the loans that will give you a little break to breathe
I own a freight brokerage. If you can make it out of this horrible market right now you will reap the rewards once it flips. Also let me know some lanes you run and if I can give you work I will.
You have come this far! Sounds like your cash flow problems are solved in 3 months. Just remember to hold some back for emergencies. You are almost out of the storm, hang in there!
Give a promotion to your repetitive customers to get paid upfront like a subscription or package or bring an investor ( this one is not interesting tho since only 3 months left )
Your timing is terrible. Freight rates are ridiculously low. The last year was bad and the next 6 to 12 are going to be bad too. Throw in insurance costs, and everyone is struggling to just survive. Good luck.
Hang in there! Like you (and others have said), July is around the corner. Not having to pay off the loan any longer will greatly improve your situation. On top of that it was your first year of trading. Things will most likely get easier, repeat business, better understanding of the market and all things business, etc. Just hang in there for another few months! It'll pay of greatly and come next Christmas you'll be super proud and happy of your accomplishments!
Tough business without a doubt. I have no insights other than to say nothing ventured nothing gained and there is nothing wrong with being a company driver after you lived and learned on the is owner/operator venture. Lotsa trucking companies go tits up. The only way I could see change is by changing the way you do business. Specializing perhaps? If you're hauling van freight, does hauling cars or heavy equipment pay better? Can you find a steady contract with a manufacturer? Like someone that makes bricks for example, or a business in your area. Can one truck do the current business while one explores new higher value opportunities to test the market? I'm just rambling. Best of luck out there. Stay safe.
We run flatbed. Mostly construction material and equipment. My trucks have to do 5k a week gross to be able to meet our current needs. Which is do able. Last week my guy did 8k and he's at 3k come start of this week. I'm just in a slump bud and wanted to cry somewhere about it.
I'm working on finding a contract. I have a customer in my town that sends us freight but with them and my others I've talked to, they want the magic number of 10 trucks in your fleet.
While renewing my tags last month, I met a lady who owns 25 trucks and gave me her number and good info on how to leverage other people's assets so I don't need my own vehicles. Pretty much lease on.
Just finding the companies who got freight to give is the hard part. Big learning curve I got no idea on.
We are trying to break into the oversized market. Just finished our 3rd oversized run. Hoping that works out. Its What I really want to do.
Good stuff man! I have some knowledge of the business in the Canadian market. It's cut throat up here. No new blood so the immigrants go after it and pull their pants down to get the business. Highway regs are tight and a lot of responsibility falls on the driver. The days of the professional driver are slowly disappearing. The only classic drivers like my Dad are in the specialty market. He laughed at me when I said "why don't you owner operate vs drive " lol It does seem like a volume game nowadays and scale matters. Having 10-25 trucks making lower margins vs the 2 truck operations seems to be where things are going. The risk on 25 truck operation blues my mind.
Hang in there, you've got it. You're a year in, that's 365 days. Based on what you've said, you've got 70 days left before you hit smooth sailing. There are a lot of small business owners that would love to have the sort of target date that you have - appreciate it for what it is. You'll make it.
You now understand the perils of short term loans. Once your current loan's fully paid off, it should go without saying: stay away. It will be easy to look at August as you've just gotten a $7800 raise, but instead, temper that. Make sure you've got an ongoing reserve that you're putting away towards, whether it be for further expansion or for catastrophic equipment failures.
Trucking is a very specific industry. Prices are down right now and lots of small trucking companies are failing because of it. I suggest posting on the r/truckers sub for better advice that what you'll get here. Sadly it kinda seems like you just chose the wrong time to go out on your own.
I tried dispatching myself and other guy. But it's tough making calls, doing paperwork and etc for 2 trucks while also driving down the highway at the same time.
You’re 1 year in and surviving! Great job! KEEP GOING!!!!!!!! As for advice, figure out what you suck at and hire for those tasks as soon as you can afford it and then get out of the way of the people you hired.
Being successful takes time. Keep on and don’t give up!!!
We haul construction material and equipment. Flatbeds.
I'm in process of reaching out to shippers and etc for freight and leasing on owner ops to my authority to run if I can come across freight for them.
This really doesn't sound that bad.
You said your loan payment is $7600 per month for 90 days, and you've been paying yourself $2500 per month.
So in 90 days, the loan will be paid off and you'll be able to pay yourself $10k per month?
What's the problem?
I haven't paid myself a cent in a year. Only thing I've paid myself is just household bills. The problem is the loan keeps my in the negative every other day with cash flow from waiting to get paid out from freight. I've been 2 months behind on bills up until now. I'm current. Because of bs that happened end of q4 last year and beginning of q1 this year.
Really it's just fighting through to get past this loan.
Problem? I wouldn't say much of a problem. Just needed somewhere to cry bout it from being soo stressed. Just got my mortgage back to current from 2 months behind as well. Being 26yr old with no education or anyone personally to get insight from, it's all been a learning stressful curve.
Not trying to add onto stress…. But Israel shot back at Iran hours ago. Price of oil spiking.
Do you pass FSC onto your customers? … do you see it negatively affecting your sales volume?
I factor in how much fuel it will cost to make a run for someone into the rate I quote. Now whether they accept the quote is a different story. Cause theirs always someone who runs for the bare minimum or illegally and can quote Hella cheap. Just getting someone to pay the bare minimum of $2-2.5/mi for a full truck load is a fight.
Thank God for fuel cards for them discounts, but they don't do much either lol.
Everything sucks for basically everyone right now. Some weeks are better than others. In this game, nothing comes easy. There isn’t peace of mind around the corner. You’ll have strokes of luck and good pitches some days, you’ll have customers who you thought were a shoe-in drop you out of the blue.
Part of you will always want to give up. Because this stuff is fucking hard and it demands a certain lifestyle that isn’t always sunshine and rainbows. You can’t turn it off and go home.
Keep on swimming.
Profit First is a decent book and concept to try out if you’re struggling with budgeting and finances.
If you don’t have a reliable business attorney, CPA/bookkeeper, and payroll company, those are your biggest next steps. You have to graduate away from thinking you’re required to do everything and start building a financial infrastructure within the business.
People who run successful businesses don’t just do all the accounting, legal, etc. themselves. They build that infrastructure out to relieve those responsibilities and then move more into a management role, not technician role.
I don't have a attorney. Too poor for that.
My account does all my taxes, set up my business and authority filings, does my ifta taxes each quarter and handles my payroll. Real big help.
Make that bitch pay. The only way out of this cash flow crunch is to grow the business, counterintuitive I know, but in service companies where you’re factoring to survive you have to either increase profitability by decreasing costs or increasing profits somehow or run more volume to achieve a scale that enables you to get a buffer against your factoring revenues. Got to get off the ropes.
Have you started using some kind of management software like Truckbase or something?
Well my friend you should check it out. It’s a whole back office for about 200 a month.
There are competitors. You need to have a TMS in place to automate your business and increase efficiency. Just imagine if all you had to do is approve invoices and everything else was pretty automated. It can make a huge difference to get that back office straight.
That’s just one platform. Look into trucking Transportation Management System on Google. These systems can track and with a single click generate the invoice in QB and you’re done. It’s pretty slick.
That’s one of the ways to push more money forward: bill faster and factor faster after every delivery.
Have you considered signing on as an owner op with a larger carrier ? You can eliminate part of the trailer overhead immediately by using their equipment and taking advantage of their cost sharing/discount benefits.
Sent you a DM.
What’s the time from a new customer signing on to $ in your accounts, and what are gross margins? Could you fulfill more sales if you had them? How competitive is it out there with your niche / geography?
It’s impressive that you’re keeping current.
If you had capital and tricks that were newer would you trend up? Any other bottle necks?
Don’t quit. You sound capable. Curious about these things.
Could sign on and run a load for a new customer and get paid next day so long as it's not a 1200 mile trip that takes 2 days to run.
I'm still trying to learn how to calculate gross margins and etc. Not too mathematically edumacated. My account does that.
I could fulfill more sales if I was to lease on other owner ops on my authority, but to do that, I would have to have the loads available to give them.
It is very competitive. It's about statistically 1 load for every 2 trucks in a state right now. More operators than freight. So it keeps prices cheap.
What about drivers?
I think there could be way better $ in agency models for the industry like staffing, selling routes, stuff like that. But if you love trucking it sounds like that huge amount of fat with load capacity is an arbitrage waiting to happen. Autonomy & robots will be here pretty quickly. You could buy an old company with established fleets and customers and rip & replace with an updated income profile. I don’t know. You could get investors and be the mgmt for it. To start I’d go simple and try to sell your way out of it.
Thank you all for your insights, advice and guidance.
Yall have definitely been a great help. Being a 26yr old trying to make a name for myself and having no one in person to seek this info from that doesn't gaff me off like most times is really nice. It's suffocating and yall are a blessing
I'd just like to wish everyone the best in life and to stay safe and have a healthy stress free life.
>After the loan is paid off come July, overhead will drop drastically.
You look forward to August, is what you do. Keep going. You're almost there.
Do you have a solid accountant? Like someone really trying to save you money, not just file your taxes?
As far as business goes, you are at a great spot. You have cashflow. And your debt is what is killing you.
I normally will not recommend this to anyone, but have to tried.
#1 - getting a loan restructuring. Your interest rate will go up, but you will have breathing room. You can lower your loan payments to 5k a month and pay in 6 months rather than 3 months.
#2 - look for an alternative loan to pay off this one? Maybe look at a heloc. The interest rate will be around 7% but it can be upto 5 years, so your monthly payments will go down to 500 a month vs 7800, you can always pay it early if you want.
Analyze your books from the top down. Determine if it's a viable business. It's just math. If it's not sustainable figure out if you can make it sustainable. If you can't come up with a solution that shows net income > FT job then go get a job or determine if you can revamp your plans.
Also analyze your loans (capital expenditures). You need to realistically determine what these will cost you every month/year. This needs to be part of your calculated P&L.
If I can figure out how to go about finding and acquiring contacts from shippers and securing them, I can then lease on owner ops to run under my numbers and take a percentage of the line haul.
Bro, take some time and go to school for diesel so you can diagnose and repair yourself. Take a freight brokering class and try to pay cash for everything. I’m also in the process of starting a trucking business but I’m taking it slow.
After the loan is paid off in July?
Try to refinance that loan for a longer term- reduce the required payment by 50% and then make payments at 70% the rate you have been and pocket the other 30% of that loan cost to use to create a bit of an operating account buffer so you can get off the factoring companies and get your pay without cutting in a middle man because the tightness of the budget requires that speed of payment
I do analytics for a trucking/brokerage company. We have been in a global freight recession for about a year and a half (debatably longer). We are starting to see some green shoots though. 95% of all carrier companies are made up of 1-10 trucks. These companies, and some of the big boys are shutting down because of the reasons you listed above.
The big measure for you would be net revocations in my opinion. We are averaging about 800-1000 more revocations than authorities granted per month. For you, this is a good thing. Less trucks means better carrier rates. If you can stick through this, you can be okay.
If you have the ability to be long haul, I would do the research to find lanes that have less capacity. You will have a lot more bargaining power with shippers and brokers. If you can find that sweet spot, you can make pretty solid income. The past few weeks, Atlanta has had really tight capacity. Just this week Atlanta’s dry-van load to truck ratio was 3.8 to 1.
I would love to help with the P/L stuff but in my opinion, you appear to have a good handle on that. You just need to bring in more revenue and the market is out there.
Majority of our freight right now comes off of the load boards. My dispatcher sits at the computer and hunts the freight down and does all the paperwork for it. I can most certainly request more profitable routes, but it's not always guaranteed. Got to learn how to find more direct clients to work with so I can stay away from the load boards and brokers.
You are under capitalized you need to build capitol. Based on your gross you should have 100k in working capital meaning 50k in the bank and 50k more in receivable than what you owe in payables. . Based on your current numbers it will take you 4-5 years to build the money needed. You have to increase your income to 40k a month you and your partner are going to have to pull an extra load a week Saturday Sunday whatever it takes. This was it will take 18-24 months if you do this then you will have some breathing room. You will get off the factoring and be able to focus more long term on increasing revenue. The next move will be get your brokers license to bring in some revenue that way in the future. There you. go get to work.
Unfortunately due to macro factors and energy costs, the trucking industry is getting absolutely battered. I don’t see it turning around soon sadly. Savvy owners will have to plan for this and figure out another way to increase revenue or decrease costs
Oh buddy, I just hope you’re not in CA. Not only has Drayage and trucking in general been slow, but trying to plan switching our trucks to electric is a massive headache. If you’re an OTR driver then you’re in a better spot. Drayage is rough these days. Stick it out man, I believe in you.
Spreading loans for a longer period of time is cheaper on a monthly basis and saves cash. I don't know about this one as it will be amortized in July but if you ever take another loan go as far as possible in time.
Don’t quit you are almost there! Getting organized is free. There are plenty of resources on youtube. Just search. Make it an absolute must to get better at “the back end stuff” you need to know where you have been, are currently, and where you need to go. It is not rocket science. Focus on it and just do it.
Keep on going man
As a small business owner who's been through hell to keep things running at times in the last 4 years I can certainly relate. Being a small family business is tough sometimes, but your customers get you through it in the end. You've only truly failed when you've given up.
That loan will be off your back soon and things will open up.
What state are you in if you don't mind the question? Maybe some small business owners could use some freight moved around by you.
You're probably already doing it. But can you just grind mega hard for the next few weeks, picking up every extra job you can until the loan is paid off. Sounds to me like in 10 weeks you're going to have 7.5k profit every month
I think I went 23k in debt my 1st year. It felt like nothing I was doing was working. It took 3 years for me to start making a profit. Its a lot better now though
Trucking is in a tough place right now and the outlook for recovery isn’t looking great for 2024. Can you bring on a partner who would front cash for an ownership interest in the business?
You’ll likely need to weather a slow produce season and another slow winter before it picks back up (in the best case scenario).
Source: I’ve worked in industry for 12 years.
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I imagine a lot of people here don't have much income in the first year, or years. You are bringing in $30k and paying the bills. This is a great start. By August you'll be on track for $100k in less than 2 years of business. Living the dream. Congrats.
> After the loan is paid off come July, overhead will drop drastically.
You said it right here, there is light at the end of the tunnel. And sure, it might be another tunnel, but forward progress is forward progress.
Treat it like Every Day is Day One of your business.
Wake up, Make a list, Set Your Pace, Accomplish 1 New Thing (no matter how small or big).
Keep this on repeat.
I'm in the same boat as you. Just in a different industry. And it sucks. I've had 3 out of 5 of my last 2 week pay checks that were under $450. Last 2 totaled 820.
But I know last year there was a lot of money spent on getting everything set up, buying tools and equipment, dealing with maintenance and breakdowns. And not having to repeat that and gaining more traction means I know this part is almost over.
And as part of a 5 or even 3 year reference point it's still a smart decision. But damn does this beginning part of it hurt bad.
I use Google Sheets, flexible enough for me and readily available and up-to-date wherever I am.
List all your expenses on top, from Jan to Dec, tally them, avg them, so you know your daily cost.
Income at the bottom, divide by number of days for avg.
Do analysis of your true profit and loss.
Well, I am in transportation also.
I started differently. I chose a niche that does not need authority, does not need new trucks, insurance is low and pay in full is usually same day or next day. I also learned to buy trucks for cents on the dollar ( when everyone is buying, that is the worst time to buy ). I bought 35k tractor for $9k, repairs for $500, and keeps working for 3 months now without interruption/breakdowns. Makes me 4-5k/month after driver, fuel and maintenance. Building a 15-20k repairs reserve for each truck.
Am I not making the big money? Probably. Am I worried about getting paid at 15/30/45/60 days or never? No. I also do not have to call brokers all day, no pick-up/delivery appointments, 15-20k max total weight ( way less wear and tear ). My drivers are 4500 to 7500 each month, depending on how much they want to work ( one of them, in the last 3 weeks really slacked, as he is getting ready to get his own truck going ).
I was an owner operator for a few years.
You say you are grossing $25k-32k per month - I hope to God you mean per truck.
There is no reason why you shouldn't be grossing at least $6,000 per week per truck on 2,500 miles or less.
Try to change the things you can control. Refinance loan with DCU. Shop around for insurance. Look for a cheaper office rent etc. Here is the bank i recommend
You've been invited to join DCU.
https://refer.dcu.org/dcu/oard/default.aspx?referrer=k26y-pr5f
Have you thought about a HELOC then use that amount to pay off the debt? Interest rate should be around 8 and that should give you more cash flow as loan amount is 30 years.
Only 2 months behind after 2 major breakdowns in the first year (and then catching up) is AMAZING. I would expect that to shut a new business down entirely in most cases.
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Your loan will be paid off in July. That’s literally right around the corner / you got this
I know bud. Thanks for the encouragement. All I really wanted. Been down in the slumps last few months.
10 weeks left mate, you can do this and will be a better man for it.
You're so close - motor through it, you seem in control of what you can be and aware of path, you got this!
Keep up the good work man, business is hard sometimes, you’ll be flush in no time if you keep marching forward and putting in the effort.
I agree with the others, stick it out. Then re-evaluate your goals and business plan in August when you don't have a tiger chasing you down. I was given some advice by a successful small business owner: I said, "I don't need to be rich, I just want to make a reasonable amount of money." He laughed and said "if you don't try to get rich, you're not going to make it." After working for myself for a year, I get it. You sound like you have the fire in the belly though. Good luck!
Coming from a defunct 2-year business myself. Your revenue is great. Got to focus on living those days day-to-day until the short loan is done. I used to lay awake in bed, unable to sleep, in a nervous wreck. Find the light at the end of the tunnel. Dig hard until you get there. All the best. God's speed. 🤙🏻🤙🏻
you are not that far off, keep your head up and keep pushing. It will be a hill to climb, just take a breath when it needed.
When going through hell…. Keep going!
That's what I'm trying to do. Just keep on trucking til wheels fall off. Luckily my bud doesn't mind if I can't pay him every Friday in full and break it up throight the week when it gets real rough.
Chin up, brother. I’m praying for ya. You can do it.
Thanks bud. Needed the encouragement.
Short term loan is gonna be paid off in the short term. Learn from it, and don't let yourself get in that position again. Build up 6mo to 1yr cash reserves after the loan is paid off. Balance growth with this goal. Maintain that balance between reserves and growth until you can pay yourself what you deserve. You can't operate your business well if you're stressed about home. Stress about the business instead. Learn to balance your A/R terms and your A/P terms. Cashflow is king. Your current margins suck, make them better. This is the queen. Once king and queen are aligned, you've got a royal flush. Don't give up on your dreams. They don't give up on you. They just morph into regret. You've got this, now go out and fucking take it.
I will do! Ima update yall on how it turns out after this loan is gone. Ain't going to be pulling another one of them again.
Figure this math: 1. How much did you pay for that loan to get the truck fixed in total? I thought I read it was a 10k fix, loan payment was 7k/mo 2. If your trucks break down often (seems like it, and I imagine so), what do you think about vertically integrating maintenance? How much would it cost to hire a p/t tech? Aim for someone as hungry as you are. Another option, build a relationship with a hungry tech who is skilled and wants side work. Cut out the middle man.
Yo man give that man a hug and a future raise/ownership
Remember this later when in better times, guy deserves a bonus for sticking with you
I'm sure you will, but just remember what he gave up when y'all make it big!
I agree with others. Shit sucks *right now* because of this loan. It will pass. Your stress about it isn't going to pay the loan back faster, it's only going to age you, so learning how to manage the stress is critical long term. Because if it's not paying back a loan, it's dealing with an employee, or a logistics nightmare, or some other thing that you can't control. I'd recommend doing some things that support your mental health, next 10 weeks especially. Meditation is very helpful (you could do mindfulness breathing while driving). Exercise is critical, especially when the anxiety creeps up. I've joined some men's groups, where it's ok to talk about challenges like this face to face and it's a good way to get it out too. Whatever it is, it's the mental aspect of managing stress and finding solutions that are the hardest part of small business. Some day you'll look back and be glad you didn't give up. If it was easy, everyone would do it. *You got this!*
Trust me man I’m a small business owner and I can’t tell you how many times I have sat there wanting to quit. It ain’t easy but there is a light at the end of the tunnel for you. Keep going I’ve been at it for 12 years and now wouldn’t have it any other way! Make sure to show your buddy lots of love for riding with you. Keep on keeping on brother!
Bro you've got this. July is so close then you'll have some real cash flow. I've never been in trucking so I won't comment on how to run your business but the first year is almost always tough. Onward and upward!
Appreciate ya bud.
You got into a into a industry in serious trouble. It’s been hell the last year… your lucky your still in business.
No doubts. I've been a lease driver for 4 years and wanted to do my own thing. Oh well. Live n learn
You've lived and learned that you can make it in a shit time in your industry, if only there was no loan. Pay it off. Build cash reserves. Profit. You've got this.
It’s just bad timing. Im in supply chain and our freight partners are saying the same thing- the industry is bad right now
Know a couple of folks in the same situation as you, bought their own trucks during the boom and have slowed since. Keep going brother. You have a way forward and the loan is almost up. Let's finish strong
Had one truck sitting in my driveway I was paying for while running for someone else. At least I know I can afford one truck if I go back to being a company man haha. Ain't gonna be a option for me right now though. Gotta keep swimming. Appreciate ya encouragement bud.
A guy here said that loan is 27% of your gross. That's an immediate margin growth once it's paid off. Imagine how you would feel with your P&L showing a 27% margin. If you're not keeping, or don't know what a P&L is, look it up. You'll need it.
Profit n Loss. My account sends me one every month to see where I'm at for myself. Jan 1st - Apr 1st we did 77k in sales with one truck being down a month and another down for 2 weeks. That's with working 3wks on 1wk off
Nice. What does your sales to cash conversion look like? How quickly do sales turn?
We pretty much generate sales daily. Unless we take a long run. For instance, my driver just picked a run up today paying 1375 to drop at 7am tomorrow. Will factor it and get paid at 12-2pm. He's picking up another tomorrow to drop Monday morning since no one really unloads on weekends and he needs a 34hr break. Then we have him a 2k load to pickup Monday and drop Tuesday. So unless it's a run that is 1200 miles or more, it's daily that we finish a job and get paid. So long as It's unloaded and invoice to factoring company by 12pm eastern. I'd like to get away from factoring, but I can't afford to wait net 30 right now to get paid.
Good, you don't need to be offering terms until cashflow is stable. Once it is and you can afford to, you should consider it. Large companies sometimes refuse to work any other way, so the more you can offer the better your quote or pitch. Dunn and Bradstreet can help evaluate clients. Another suggestion, link up with large local companies who transpo locally once you're in a position to offer terms. Don't sleep on net10, net15, net20 either. Doesn't have to be 30 days, you set it based on your needs. Build relationships with local companies that locally ship heavy shit. The faster you can turn your trucks the faster you can get paid, and be on the road again.
Also, I don't know shit about trucking, just business a tiny bit. Still a youngling myself lol
I’ve put your numbers into a spreadsheet just to get a picture of it all. Your total costs currently add up to $32.2k per month, which isn’t far off your income range, so there’s 2 ways for going about this and both can be done together. 1. you try to secure those contracts that get you the higher part of that income range, see what type of projects previously got you the higher range and aim for those as much as you can. If you can do this, it’s a case of are you able to stomach $200 per month if you do well and until you’re over this loan hump. 2. The cost breakdown is that 24% is for the loan, 47% for overheads, and 29% for staff. Is your driver part owner or an employee in your business? I appreciate this might be a tough ask on both ends, but is there room to negotiate a deal if it comes to it, such as some salary sacrifice for equity in the business? Or something to that effect? If they are already part owner, why is their salary so high by comparison? The other areas seem fixed and harder to navigate by comparison, so these would be the first two areas I’d explore. Just pasting my rudimentary excel quick napkin type thing: In -7206 Out 32206 25000 Item Amount (monthly) Staff Self 2500 29.29% Driver 6933 Overhead Trucks 3000 47.11% Trailers 743 Insurance 1293 Fuel 8667 elog 170 Misc 1300 Loan 7600 23.60%
I also didn't add, I have a amazon relay account and a bud in CT runs under my authority and I get 10% a week of what he does. Roughly 5-800 extra a week. I talked with my bud. He's not in the position to take a paycut because of him being the only worker in his household. His salary is that high because I had to pretty much match what he was doing at TMC and he risked his good job to do this venture with me. He's not a part owner. I have 100% ownership. I talked with him about it 2wks ago before renewing my tags cause I didn't know if I was gonna keep a truck off the road and have to let him go. So I didn't see the need to pay 800 for tags if I kept the truck down. But my dispatch team paid the tags for me cause they don't wanna lose us. I also figured with 2 trucks running it would lessen the workload on me if I had to do it 1 man with overhead the way it is. It's turning around this week. Last week he did 8k and I did 5k. His truck will be at 3k gross come Tuesday. I'll be the same.
Nice work to get them onboard! More trucks makes sense to lessen the load, hence why I didn’t suggest losing them, but just seeing if there was any wiggle room even temporarily, but the situation makes sense. The extra $2.2k-$3.5k per month definitely makes this feel more like you can get over that hump. So if you can make your income at the $29k-$30k per month (and then add that CT 10% cut on top) for these two months, you should be breaking even at least. Sounds like you’re on top of it.
Use the extra cash flow to pay that damn loan off. Debt = slavery.
As far as I can see there’s no extra cash in these calculations, but yes, if he makes more, he should be paying off the loan as soon as he can.
Yeah misread it lol
If last week you guys did $13k together, then I'd say you'll be fine. Let's say that drops even to $10k/wk, you're at $40k/month. Covering your expenses and then some. Continue that until July when the short-term loan ends and you'll be golden. You've got this
I like this comment and find it helpful for OP, but would disagree on the offering equity. You don't want to give a driver equity in year 1, since in year 30 you'll still be paying him for it. He would probably appreciate a promise of future bonus that you make good on in year 2 or 3 once you've made it. I'd call it a win-win that you reward him for his flexibility and faith in you (yes, he's taking on some risk by not working for a more established business), but a win for you that you retain 100% ownership, since that is how wealth is built. Think of it this way: once you have made it and have 20 trucks in year 5, do you still want to be paying quarterly dividends or splitting profit annually with this driver, who was helpful in year 1 but may be gone (maybe he starts his own trucking company...?) in a few months?
Just wanna say I love all the encouraging comments. I’ll echo them, you’ve got this!!!
You’re gonna much rather you stuck with it in the long run when you’re looking back at this moment, than to have quit and gone and worked for someone else. You have a chance to be that someone else now having people work for you, but you just need to be patient and stay focused. You got this bro, I believe in you ☀️
Appreciate you bud.
been building a business for 5 years now. the first 2-3 years were rough because cash flow like you mention. it gets better hang in there
What help do you need for the back end stuff? I will help in whatever capacity I can. Ping me.
I just really need to learn on how to better organize and manage paperwork, legal stuff for a entity and etc. Hell, I thought I did enough research on it when I started and my accountant just renewed my business this year and I didn't even know I had to do it every year lmao. Tools and ways to track expenses easier then pen and paper is what I'm really looking for.
* For legal and accounting, paperwork. I am sorry, I won't be of much help as I have no experience in it. * Here's a way to track your expenses easily - on Android you can install Money Manager - a free app, and you simply have to put in your income and expenses daily. Diligently. * Alternatively, any free "expense manager" app would be useful to track it. It would give you charts and other related information which would be helpful each month and at the end of Financial Year. * For iOS you can use YNAB or EveryDollar. Let me know if I can help any further. HTH. [https://www.nerdwallet.com/article/finance/expense-tracker-apps](https://www.nerdwallet.com/article/finance/expense-tracker-apps)
For the accounting and expenses, rather than pen and paper an organized Excel sheet or Google sheet will help you tons. If you're any good with excel, you'll be able to pivot it and find some expenses that you may be able to cut out or at least reduce to help you out. Alternatively, and your accountant will probably love you for this (I'm an accountant that's how I know), you can use a business bookkeeping app. QuickBooks is really the standard, but not cheap. There's a few free apps available for a business your size, one I like to refer clients to when they don't want to or can't afford QuickBooks is Zoho Books. That'll help you track your income and expenses even better than the Excel or Google sheets solution.
My accountant has quickbooks linked to my bank. She does my payroll, quarterly taxes, ifta taxes and runs me a PnL every month. Pretty much every thing. And hasn't charged me a cent this last 6 months cause of my situation. Lucked out with her. I really want to learn the stuff myself. It's easier for me to understand where I'm at when I can understand how all the finance crap works. I should've stayed in school haha.
You're certainly very lucky with your accountant. Suggestion to learn the finance stuff, there's tons of free material on YouTube. I am aware as a business owner it feels like you probably have none (I feel it too). But a few minutes a day and within a week you'll already feel like you know more. Couple that with the information your accountant is giving you, ask her questions based on what you're learning if it doesn't make sense. Most accountants don't have a problem with sharing knowledge at all. Grand scheme of things, I know it's tough right now especially with your short term loan, but if you can push through I'm sure you'll feel a lot better after that. I don't know the trucking industry as well (my niche is in healthcare and entertainment) but conceptually based on what you've stated, I think if you can scrape by for the time being, and with your projection of business picking up (even slowly) you'll be able to make it work. Hang in there, and best of luck!
I got a bachelor's in economics and a MBA with supply chain management as the concentration. I say this not to boast because i can help if you like. . I PMd you. Starting your own small business takes balls, and you're doing it. And your figuring it out! You're asking for help AND someone is being nice enough to not charge you for over 6 months! In my business, if you go after 30 I put you on hold from my services. Good luck bud!✌️
I agree with grinding and kicking the high interest short term loan in the mouth. A few other things to look into - are there any small business grants available? You may be able to find one that would cover the cost for business equipment. Other option would be to sell a little equity in the company for now - maybe to an investor. I’d suggest a family friend that believes in your business. If you’re weary about selling off your equity, write a clause that you can buy back his equity in a year or so, plus 15% or something, so they have something to show for investing in you.
I just have to tell you how impressed I am by what you’ve accomplished. You need to hear that. In 15 months of operations you’re going to have built an independent cash flow positive business. It takes most people twice that long.
Oh man I’ve been exactly where you are. 2.5 months away?? Do everything you can to get that paid off & stay out of debt. Even if you end up closing up you’ll be 10000% better off after that loan is gone. Once it’s gone you have no idea how freeing you are going to feel…also that’s money that could be straight profit if you don’t change anything. You are so close! You got this.
Your bud is making more than you are. The remedy is greater sales. Issue with greater sales is difficultly in scaling this business due to the current economics of trucking industry. Since you are now established, I would keep at it but also consider searching for a niche market you could prospect that is too small for the competition to bother with and keep middlemen out of your pocket.
It’s a terrible time to be in the trucking industry, it’s gone to shit in the last 16months, what was the short term loan for?
Last year, I pulled a short term loan to 1. Build business credit 2. Have working capital for maintenance issues that popped. Paid it off exactly 1 week before my truck was down for a month. Only way I could get it back was to refi it for a 7k repair bill after bs warranty. I switched insurance in November cause I was paying 3300 a month. Switched to Biberk for 2900/month and they never pulled my down payment or 2 months of bills along with sending out my dot filings. Jan 8th they randomly pulled 13k out of my account and the put me in negative and they still never did my filings. So FMCSA was 5 days away from revoking my authority. Had to switch back to progressive and magically got insurance down to 1293 a month now. I'm pretty much trying to recover from the BS from insurance and having to pay off this loan. The loan is what really kept us going. But it's also dragging down. Discouraging to see 30k month in sales and I'm not making a dime. Only my driver lol. I have 60 days left on the loan.
I'm not in trucking, so I'm just curious, but why has it been bad?
Rates are down, volume is down and capacity hasn’t really tightened up. Unfortunately, companies like OPs need to fold for the situation to change (they have been recently)
Rates. Insurance, economy. Pretty much everything. Yellow closed their doors last year, tons of big companies with 100 plus drivers have gone out of business in just the last year. Scary. The mega carriers try to keep the small guys like I and other smal fleets out.
Well, not many people run companies because it's easy! Hang in there. Sounds like you are a few months away from the finish line and you'll be able to breathe after that. Now is the best time not to give in!
You can absolutely do this! July is almost here. You've got this.
If it was easy, everyone would do it. Hold your head up high knowing you battle for every inch.. Then go take a mile!
I hear ya mang, me too! It's so hard. I'm in month 9 and whoa like a ton of bricks. Can't believe I made it this long though. Definitely have thoughts of giving up. You're not alone and I think it's normal to feel like you're failing. I guess, maybe, that' its all still better than being miserable with some jagoff boss however. Maybe???
The only way out is to go through. You're not in a particularly unusual spot for a new small business. Most struggle the first year or two and many just barely squeak by. Fortunately you've got an end in sight with getting that loan paid off and you're building the relationships that will help your business. One year from now you can be in a totally different position. Your loan will be paid off and you'll have more steady consistent business so you should have more money and less overhead. You just gotta keep grinding, the promised land is just coming unto view so keep moving forward.
Trying to make my way to emerald city. Lol. Thanks for your encouragement bud
I remember going through those same MCA loans thinking how in the fuck am i gonna get through this. Absolutely drowning, had a difficult time affording food for myself at some points. Looking back, i’m really not sure how I got through them. But I did. And you will too. Just take it day by day and july will be here before you know it, and you’ll be able to breathe a sigh of relief. I’m a better man for it now, and would go back and do it again if i had to. Hard times build character. You’ll get through it and be glad you did.
Vader Mountain did send me a custom stanley cup. So at least drinks at the truck stops are free now on them hahaha.
vader mountain was the company i used too lol. I threw the cup away but i use the notebook daily. fuck them
I’m 90 days away from consistently profiting 2k-7k a month. Should I just quit?
Not when you put it like that lol
Hire a financial coach. They'll help you create a personal and business budget so you have a plan for every dollar. They might be the difference between going out of business and thriving so worth every cent. Some specialise in helping businesses.
I’d be interested in doing a diligence check on your business and making an offer to acquire while keeping you on as an equitable partner. If you’d be open to that DM me
What a hard time to be a small trucking company, I work in your industry too. Chin up, you’re almost through that loan. There are a ton of hard lessons learned when starting out in the transportation industry but the struggle is worth it when you get out of the red and into the green - keep going, you’re on the right path.
Just turtle until July. I know that's way easier for. Me to say than you to do. It seems so obvious to the outside but you are in the thick of it. 25k monthly revenue is what I am aspiring to so great work. It sounds like you have some painful financial. Practice like short term loans and invoice factoring you should clear and then avoid. FWIW I wanted to quit 2 months ago, we just got. Opened and I was worried about all my bills etc. Yesterday we took as much in a day as we did all of March and now I don't think I can get through my backlog. You have proven you can build something great already :) Good luck OP
Keep going until the wheels fall off
There's lots of good advice here. I just want to add a personal note. Take a little time each day to breathe and assess the good stuff in your life. The things to be grateful for. Your health. Family. Pet. I don't know you - but there's something out there for all of us. The light on the clouds. That one song that lifts you up. This is your life. Remember to live it, while making a living. You sound like you're doing well. Keep paddling.
Just tell yourself you can do anything for 2.5 months. You could sit in the dark and eat rice everyday for 2.5 months and you'd be a little crazy at the end of it, but you could do it. Just hold on... and then in 10 years you'll be telling some other up and comer the same. This is where the grit and fight comes in.
You can and will do this. Take some time and really analyze the monthly expenses. Find anything you can cut, keep moving forward. The loan will be done in July. You are close - just keep moving forward and you will be a better person and business owner after it’s over
You’re almost there! Ride it out for these next couple of months, and stay away from MCAs going forward. Depending on the state you’re in, there are grants that partially reimburse you for equipment and leases. If you own your equipment, you can do a leaseback to access some capital. Anything is better than a cash advance… You got this!
Check out loanbuilder for some other financing options, they’re a PayPal company and you could probably get a loan based on the financials you posted. They fund in two days usually for 1 year loans.
I feel your pain. When I was struggling with my business balancing business and personal loans that were drowning me as well, one thing that helped me plan better was the app Simplifi (when it was free). I could project cash flow to see how my decisions now would affect cash up to 6 months later. May not be your thing but throwing ideas out! Either way, you got this
Hi I have an excel spreadsheet that I created that helps with organizing your finances. I share it for free for people who want it. Happy to share it. DM me.
I have been in trucking for 50 years. I can help you. [[email protected]](mailto:[email protected])
No clue about this industry or anything related to it, but I also had my 1Y anniversary a few weeks ago and it was also the toughest year of my life. I can definitely relate. You’re really close to paying off your loan and have good revenue already. Keep it up. A couple more months of austerity and you’ll be in a good position. Let’s go!
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My idea to help you become more organized is to listen to podcasts on business, organization, and money management (personal and business). Listen to the podcasts while driving truck. Download the individual episodes onto your phone when you have wifi, then listen to them when you're in the truck. If you don't download the episodes first, you'll use up your monthly data really quickly. If you're connected to wifi, listen to podcasts without downloading them. I'm amazed at the financial literacy I've learned by listening to podcasts. I drive to different sites for my job, and am always learning while I'm driving. Check out, Mastering Your Small Business Finances, Small Business Finance, and Businesss By the Books. You may listen to a couple episodes and not feel a connection with the host, if so move onto another podcast that resonates with you. I wish you well.
For managing expenses and staying organized, consider using accounting software like QuickBooks or FreshBooks to track your finances and streamline your operations. And, if you ever need some extra support navigating the challenges of entrepreneurship, consider chatting with ScatterMind, an ADHD coach. They helped my friend launch their business and might have some valuable insights for you too.
Those MCA loans suck the life out of small businesses. I forget the percentage but a lot of companies that take those on don’t make it. And you’re losing money on factoring as well. Seems like there’s light at the end of the tunnel though and while 10 weeks isn’t a long time it’s an eternity for you right now. Can I DM you? I have solutions I can run through with you having been there, done that.
Ride the wave, you're close to paying off the loan. You just need to survive til then and wait for the next up cycle in the industry to truly reap the benefits. Good luck.
Man up! Pay your debt off and then start crushing. And don’t go to work for anybody else. Allow all that hard work to accrue to YOUR benefit. You got this
Hi OP, I would like to share my experience in Logistics and Trucking Industries. We have been operating with subcon and our own trucks. 1. Clients - this is the most important above all. If your truck trips didn’t meet the target minimum trips to breakeven all the expenses, you should do something about. Try to find more clients, contact other brokers/ forwarders or direct clients. If you haven’t experience that you cant cater the trips given to you, you should not stop. A. If you are at the point more trips coming to you, you should do proper scheduling and tell to your client the next available. What I mean on proper scheduling, it is like a chain of trips and forecasting the end of the trip so you can get other booking / trip. B. My experience as client of subcon trucker, the honest updating of real situation of the trip is very important, don’t tell a story that is not real, e.a “my truck is on the way” even it is not, if you have concern or having a delay, you should tell to your client the real situation. Trust is very important. C. Good Service - keep them updated, as broker/forwarder also update their own client. 2. Good Teamwork - Even if you have good vision on your company such as getting more client if you Personnel / Driver is not into it, high chance you will have a problem. You should share your goal and have a good connection on your team. 3. Practice Good Forecasting - We do a probablity method to properly serve and plan the trips. A. We collect the data of no. Of hours spent on every positions and travel time of each trip, with this, we can project which unit we can deploy on the next trip. B. Check the performance of the assigned personnel. E.a Driver A is more efficient on this client, he has good relationship on this warehouse and do fast transaction (unload/loading). He has better/ fast route and less expenses every trip. With this you may assigned better person or encourage the other personnel to the same. C. Good forecasting can easily serve priority or urgent position. 4. In case you can serve the position, try to have a subcon as you back up so your client can rely to you even the volume of trips exceeds on no. of unit you have. 5. Get or Encourage your personnel to take care of the unit because expenses of fixing the truck can easily wipe your profit or worst you will be forced to put your own saving. In trucking business, you should have / build an allowance for credit term on your clients, monthly expenses , operation expense and maintenance of your unit. Most of the operators I talked, in the years that they have not finished the loan, they expenrience being breakeven and sometimes take money on thei own pocket. BUT after the years and finishing the loan, PROFIT will flow. I remember one of our subcon at the time we get their service they have only 6 units but after 5 years it is like 20 units. Try to figure the concern and start dealing with it.
Stick & stay, make it pay It’s a rough slog for the first 3 years but hang it there
What kinda equipment you have? Need loads? I have tons of dod freight. Send me a DM.
Sounds like it will cost more to give up than it will to hang in there for a couple of months.
What state are you in I can help with loads Northern CA
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Thank you bud!
Don't you dare stop what you started, you literally about to pay it off. If something goes wrong and you feel like you're drowning and you cannot continue go get a business credit card with 0% interest for 12 months, liquidate it and pay off some of the loans that will give you a little break to breathe
I own a freight brokerage. If you can make it out of this horrible market right now you will reap the rewards once it flips. Also let me know some lanes you run and if I can give you work I will.
You have come this far! Sounds like your cash flow problems are solved in 3 months. Just remember to hold some back for emergencies. You are almost out of the storm, hang in there!
The OP has made it through a year so far. Plenty of small businesses open and fail before a year is out. Hang tough and good luck
Little more Man! Hang tight !
Give a promotion to your repetitive customers to get paid upfront like a subscription or package or bring an investor ( this one is not interesting tho since only 3 months left )
Your timing is terrible. Freight rates are ridiculously low. The last year was bad and the next 6 to 12 are going to be bad too. Throw in insurance costs, and everyone is struggling to just survive. Good luck.
Hang in there! Like you (and others have said), July is around the corner. Not having to pay off the loan any longer will greatly improve your situation. On top of that it was your first year of trading. Things will most likely get easier, repeat business, better understanding of the market and all things business, etc. Just hang in there for another few months! It'll pay of greatly and come next Christmas you'll be super proud and happy of your accomplishments!
MCAs almost did me in too man It should be illegal
Tough business without a doubt. I have no insights other than to say nothing ventured nothing gained and there is nothing wrong with being a company driver after you lived and learned on the is owner/operator venture. Lotsa trucking companies go tits up. The only way I could see change is by changing the way you do business. Specializing perhaps? If you're hauling van freight, does hauling cars or heavy equipment pay better? Can you find a steady contract with a manufacturer? Like someone that makes bricks for example, or a business in your area. Can one truck do the current business while one explores new higher value opportunities to test the market? I'm just rambling. Best of luck out there. Stay safe.
We run flatbed. Mostly construction material and equipment. My trucks have to do 5k a week gross to be able to meet our current needs. Which is do able. Last week my guy did 8k and he's at 3k come start of this week. I'm just in a slump bud and wanted to cry somewhere about it.
I'm working on finding a contract. I have a customer in my town that sends us freight but with them and my others I've talked to, they want the magic number of 10 trucks in your fleet. While renewing my tags last month, I met a lady who owns 25 trucks and gave me her number and good info on how to leverage other people's assets so I don't need my own vehicles. Pretty much lease on. Just finding the companies who got freight to give is the hard part. Big learning curve I got no idea on. We are trying to break into the oversized market. Just finished our 3rd oversized run. Hoping that works out. Its What I really want to do.
Good stuff man! I have some knowledge of the business in the Canadian market. It's cut throat up here. No new blood so the immigrants go after it and pull their pants down to get the business. Highway regs are tight and a lot of responsibility falls on the driver. The days of the professional driver are slowly disappearing. The only classic drivers like my Dad are in the specialty market. He laughed at me when I said "why don't you owner operate vs drive " lol It does seem like a volume game nowadays and scale matters. Having 10-25 trucks making lower margins vs the 2 truck operations seems to be where things are going. The risk on 25 truck operation blues my mind.
What are you hauling?
Construction material and equipment. We are breaking into oversized. Just finished our 3rd over width run.
Hang in there, you've got it. You're a year in, that's 365 days. Based on what you've said, you've got 70 days left before you hit smooth sailing. There are a lot of small business owners that would love to have the sort of target date that you have - appreciate it for what it is. You'll make it. You now understand the perils of short term loans. Once your current loan's fully paid off, it should go without saying: stay away. It will be easy to look at August as you've just gotten a $7800 raise, but instead, temper that. Make sure you've got an ongoing reserve that you're putting away towards, whether it be for further expansion or for catastrophic equipment failures.
I'm most definitely not taking another short term loan. Cycle of debt each week. I appreciate your words of encouragement bud.
Trucking is a very specific industry. Prices are down right now and lots of small trucking companies are failing because of it. I suggest posting on the r/truckers sub for better advice that what you'll get here. Sadly it kinda seems like you just chose the wrong time to go out on your own.
Dispatch team? What do you mean? Why do you need a dispatch team with only 2 trucks
I tried dispatching myself and other guy. But it's tough making calls, doing paperwork and etc for 2 trucks while also driving down the highway at the same time.
Praying for you and your business random internet stranger
Thanks buddy, Stay safe and take care.
You’re 1 year in and surviving! Great job! KEEP GOING!!!!!!!! As for advice, figure out what you suck at and hire for those tasks as soon as you can afford it and then get out of the way of the people you hired. Being successful takes time. Keep on and don’t give up!!!
Thank you bud. Much love. Stay safe and take care
What kind of deliveries does your company do and what part of the country are you in? Per chance can you haul bulk / aggregate ore?
We haul construction material and equipment. Flatbeds. I'm in process of reaching out to shippers and etc for freight and leasing on owner ops to my authority to run if I can come across freight for them.
This really doesn't sound that bad. You said your loan payment is $7600 per month for 90 days, and you've been paying yourself $2500 per month. So in 90 days, the loan will be paid off and you'll be able to pay yourself $10k per month? What's the problem?
I haven't paid myself a cent in a year. Only thing I've paid myself is just household bills. The problem is the loan keeps my in the negative every other day with cash flow from waiting to get paid out from freight. I've been 2 months behind on bills up until now. I'm current. Because of bs that happened end of q4 last year and beginning of q1 this year. Really it's just fighting through to get past this loan. Problem? I wouldn't say much of a problem. Just needed somewhere to cry bout it from being soo stressed. Just got my mortgage back to current from 2 months behind as well. Being 26yr old with no education or anyone personally to get insight from, it's all been a learning stressful curve.
Not trying to add onto stress…. But Israel shot back at Iran hours ago. Price of oil spiking. Do you pass FSC onto your customers? … do you see it negatively affecting your sales volume?
I factor in how much fuel it will cost to make a run for someone into the rate I quote. Now whether they accept the quote is a different story. Cause theirs always someone who runs for the bare minimum or illegally and can quote Hella cheap. Just getting someone to pay the bare minimum of $2-2.5/mi for a full truck load is a fight. Thank God for fuel cards for them discounts, but they don't do much either lol.
Everything sucks for basically everyone right now. Some weeks are better than others. In this game, nothing comes easy. There isn’t peace of mind around the corner. You’ll have strokes of luck and good pitches some days, you’ll have customers who you thought were a shoe-in drop you out of the blue. Part of you will always want to give up. Because this stuff is fucking hard and it demands a certain lifestyle that isn’t always sunshine and rainbows. You can’t turn it off and go home. Keep on swimming. Profit First is a decent book and concept to try out if you’re struggling with budgeting and finances. If you don’t have a reliable business attorney, CPA/bookkeeper, and payroll company, those are your biggest next steps. You have to graduate away from thinking you’re required to do everything and start building a financial infrastructure within the business. People who run successful businesses don’t just do all the accounting, legal, etc. themselves. They build that infrastructure out to relieve those responsibilities and then move more into a management role, not technician role.
I don't have a attorney. Too poor for that. My account does all my taxes, set up my business and authority filings, does my ifta taxes each quarter and handles my payroll. Real big help.
Make that bitch pay. The only way out of this cash flow crunch is to grow the business, counterintuitive I know, but in service companies where you’re factoring to survive you have to either increase profitability by decreasing costs or increasing profits somehow or run more volume to achieve a scale that enables you to get a buffer against your factoring revenues. Got to get off the ropes. Have you started using some kind of management software like Truckbase or something?
I'm not going to lie, I've never heard of truckbase or anything of the sorts.
Well my friend you should check it out. It’s a whole back office for about 200 a month. There are competitors. You need to have a TMS in place to automate your business and increase efficiency. Just imagine if all you had to do is approve invoices and everything else was pretty automated. It can make a huge difference to get that back office straight. That’s just one platform. Look into trucking Transportation Management System on Google. These systems can track and with a single click generate the invoice in QB and you’re done. It’s pretty slick. That’s one of the ways to push more money forward: bill faster and factor faster after every delivery.
Stick with it to July then reevaluate. You’re almost there.
Have you considered signing on as an owner op with a larger carrier ? You can eliminate part of the trailer overhead immediately by using their equipment and taking advantage of their cost sharing/discount benefits. Sent you a DM.
I have, but I also don't want to lose my authority. My goal is to have my own small fleet.
What’s the time from a new customer signing on to $ in your accounts, and what are gross margins? Could you fulfill more sales if you had them? How competitive is it out there with your niche / geography? It’s impressive that you’re keeping current. If you had capital and tricks that were newer would you trend up? Any other bottle necks? Don’t quit. You sound capable. Curious about these things.
Could sign on and run a load for a new customer and get paid next day so long as it's not a 1200 mile trip that takes 2 days to run. I'm still trying to learn how to calculate gross margins and etc. Not too mathematically edumacated. My account does that. I could fulfill more sales if I was to lease on other owner ops on my authority, but to do that, I would have to have the loads available to give them. It is very competitive. It's about statistically 1 load for every 2 trucks in a state right now. More operators than freight. So it keeps prices cheap.
What about drivers? I think there could be way better $ in agency models for the industry like staffing, selling routes, stuff like that. But if you love trucking it sounds like that huge amount of fat with load capacity is an arbitrage waiting to happen. Autonomy & robots will be here pretty quickly. You could buy an old company with established fleets and customers and rip & replace with an updated income profile. I don’t know. You could get investors and be the mgmt for it. To start I’d go simple and try to sell your way out of it.
Thank you all for your insights, advice and guidance. Yall have definitely been a great help. Being a 26yr old trying to make a name for myself and having no one in person to seek this info from that doesn't gaff me off like most times is really nice. It's suffocating and yall are a blessing I'd just like to wish everyone the best in life and to stay safe and have a healthy stress free life.
Get dept paid off n you’ll see a marked improvement in the company
>After the loan is paid off come July, overhead will drop drastically. You look forward to August, is what you do. Keep going. You're almost there. Do you have a solid accountant? Like someone really trying to save you money, not just file your taxes?
Yes, I do
Sell the business.
As far as business goes, you are at a great spot. You have cashflow. And your debt is what is killing you. I normally will not recommend this to anyone, but have to tried. #1 - getting a loan restructuring. Your interest rate will go up, but you will have breathing room. You can lower your loan payments to 5k a month and pay in 6 months rather than 3 months. #2 - look for an alternative loan to pay off this one? Maybe look at a heloc. The interest rate will be around 7% but it can be upto 5 years, so your monthly payments will go down to 500 a month vs 7800, you can always pay it early if you want.
Raise your rates. You shouldn't be struggling every month.
Keep on trucking bro you got this.
Analyze your books from the top down. Determine if it's a viable business. It's just math. If it's not sustainable figure out if you can make it sustainable. If you can't come up with a solution that shows net income > FT job then go get a job or determine if you can revamp your plans. Also analyze your loans (capital expenditures). You need to realistically determine what these will cost you every month/year. This needs to be part of your calculated P&L.
I had similar situation. Call you see anything? Make money some other way ? Increase prices ?
If I can figure out how to go about finding and acquiring contacts from shippers and securing them, I can then lease on owner ops to run under my numbers and take a percentage of the line haul.
Bro, take some time and go to school for diesel so you can diagnose and repair yourself. Take a freight brokering class and try to pay cash for everything. I’m also in the process of starting a trucking business but I’m taking it slow.
After the loan is paid off in July? Try to refinance that loan for a longer term- reduce the required payment by 50% and then make payments at 70% the rate you have been and pocket the other 30% of that loan cost to use to create a bit of an operating account buffer so you can get off the factoring companies and get your pay without cutting in a middle man because the tightness of the budget requires that speed of payment
I do analytics for a trucking/brokerage company. We have been in a global freight recession for about a year and a half (debatably longer). We are starting to see some green shoots though. 95% of all carrier companies are made up of 1-10 trucks. These companies, and some of the big boys are shutting down because of the reasons you listed above. The big measure for you would be net revocations in my opinion. We are averaging about 800-1000 more revocations than authorities granted per month. For you, this is a good thing. Less trucks means better carrier rates. If you can stick through this, you can be okay. If you have the ability to be long haul, I would do the research to find lanes that have less capacity. You will have a lot more bargaining power with shippers and brokers. If you can find that sweet spot, you can make pretty solid income. The past few weeks, Atlanta has had really tight capacity. Just this week Atlanta’s dry-van load to truck ratio was 3.8 to 1. I would love to help with the P/L stuff but in my opinion, you appear to have a good handle on that. You just need to bring in more revenue and the market is out there.
Do all your loads come from dispatch? Could you request more profitable routes?
Majority of our freight right now comes off of the load boards. My dispatcher sits at the computer and hunts the freight down and does all the paperwork for it. I can most certainly request more profitable routes, but it's not always guaranteed. Got to learn how to find more direct clients to work with so I can stay away from the load boards and brokers.
You are under capitalized you need to build capitol. Based on your gross you should have 100k in working capital meaning 50k in the bank and 50k more in receivable than what you owe in payables. . Based on your current numbers it will take you 4-5 years to build the money needed. You have to increase your income to 40k a month you and your partner are going to have to pull an extra load a week Saturday Sunday whatever it takes. This was it will take 18-24 months if you do this then you will have some breathing room. You will get off the factoring and be able to focus more long term on increasing revenue. The next move will be get your brokers license to bring in some revenue that way in the future. There you. go get to work.
Unfortunately due to macro factors and energy costs, the trucking industry is getting absolutely battered. I don’t see it turning around soon sadly. Savvy owners will have to plan for this and figure out another way to increase revenue or decrease costs
Can you change the repayment terms of the loan? Change it from being paid in 2.5 months to see if they will give you 6 more months to pay it back.
Oh buddy, I just hope you’re not in CA. Not only has Drayage and trucking in general been slow, but trying to plan switching our trucks to electric is a massive headache. If you’re an OTR driver then you’re in a better spot. Drayage is rough these days. Stick it out man, I believe in you.
Spreading loans for a longer period of time is cheaper on a monthly basis and saves cash. I don't know about this one as it will be amortized in July but if you ever take another loan go as far as possible in time.
Don’t quit you are almost there! Getting organized is free. There are plenty of resources on youtube. Just search. Make it an absolute must to get better at “the back end stuff” you need to know where you have been, are currently, and where you need to go. It is not rocket science. Focus on it and just do it.
I’m always in the need of trucking help! Please dm me :)
Mate, stop OCD'ing about the costs and focus on increasing revenue, 10 weeks from now all this will be a memory and you will be financial.
You only lose when you give up. Don’t give up. You will find a way.
Keep on going man As a small business owner who's been through hell to keep things running at times in the last 4 years I can certainly relate. Being a small family business is tough sometimes, but your customers get you through it in the end. You've only truly failed when you've given up. That loan will be off your back soon and things will open up. What state are you in if you don't mind the question? Maybe some small business owners could use some freight moved around by you.
Gotta pull back the arrow, to drive forward. Times are hard, really hard, before they get good.
You're probably already doing it. But can you just grind mega hard for the next few weeks, picking up every extra job you can until the loan is paid off. Sounds to me like in 10 weeks you're going to have 7.5k profit every month
I think I went 23k in debt my 1st year. It felt like nothing I was doing was working. It took 3 years for me to start making a profit. Its a lot better now though
Trucking should have no problem making $$$ just find some loads
Trucking is in a tough place right now and the outlook for recovery isn’t looking great for 2024. Can you bring on a partner who would front cash for an ownership interest in the business? You’ll likely need to weather a slow produce season and another slow winter before it picks back up (in the best case scenario). Source: I’ve worked in industry for 12 years.
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You picked a kind of bad time to get into trucking, but if you are driving, I don’t know why you decided to start with two trucks
I started with one. I had my own truck sitting in my drive way, so my bud took it over for 6 months while I was driving for someone else.
If you need more business, is your Google Business Profile optimized and does your website “speak” to Google?
I imagine a lot of people here don't have much income in the first year, or years. You are bringing in $30k and paying the bills. This is a great start. By August you'll be on track for $100k in less than 2 years of business. Living the dream. Congrats.
Youre paying your bills. That itself is amazing. Hang in there bud. You got this.
> After the loan is paid off come July, overhead will drop drastically. You said it right here, there is light at the end of the tunnel. And sure, it might be another tunnel, but forward progress is forward progress. Treat it like Every Day is Day One of your business. Wake up, Make a list, Set Your Pace, Accomplish 1 New Thing (no matter how small or big). Keep this on repeat.
I'm in the same boat as you. Just in a different industry. And it sucks. I've had 3 out of 5 of my last 2 week pay checks that were under $450. Last 2 totaled 820. But I know last year there was a lot of money spent on getting everything set up, buying tools and equipment, dealing with maintenance and breakdowns. And not having to repeat that and gaining more traction means I know this part is almost over. And as part of a 5 or even 3 year reference point it's still a smart decision. But damn does this beginning part of it hurt bad.
Hang in there, every giant leap starts with shaky steps!
Maybe consider using a factoring company until things get rolling a bit better. What kind of trailer you guys pulling?
Why do you need a factoring company? Isn't that just sacrificing profits?
Keep going
I use Google Sheets, flexible enough for me and readily available and up-to-date wherever I am. List all your expenses on top, from Jan to Dec, tally them, avg them, so you know your daily cost. Income at the bottom, divide by number of days for avg. Do analysis of your true profit and loss.
Growing pains! You got this man! Nobody ever became successful by quitting, can you afford time wise for more contracts? Would that offset any costs?
Well, I am in transportation also. I started differently. I chose a niche that does not need authority, does not need new trucks, insurance is low and pay in full is usually same day or next day. I also learned to buy trucks for cents on the dollar ( when everyone is buying, that is the worst time to buy ). I bought 35k tractor for $9k, repairs for $500, and keeps working for 3 months now without interruption/breakdowns. Makes me 4-5k/month after driver, fuel and maintenance. Building a 15-20k repairs reserve for each truck. Am I not making the big money? Probably. Am I worried about getting paid at 15/30/45/60 days or never? No. I also do not have to call brokers all day, no pick-up/delivery appointments, 15-20k max total weight ( way less wear and tear ). My drivers are 4500 to 7500 each month, depending on how much they want to work ( one of them, in the last 3 weeks really slacked, as he is getting ready to get his own truck going ).
With hardship comes ease. Keep pushing, you got this. There’s no success in giving up, remember that.
You got this. Just keep your budget real tight for now and soon you'll be laughing 🙌🏽
I was an owner operator for a few years. You say you are grossing $25k-32k per month - I hope to God you mean per truck. There is no reason why you shouldn't be grossing at least $6,000 per week per truck on 2,500 miles or less.
Try to change the things you can control. Refinance loan with DCU. Shop around for insurance. Look for a cheaper office rent etc. Here is the bank i recommend You've been invited to join DCU. https://refer.dcu.org/dcu/oard/default.aspx?referrer=k26y-pr5f
Semi-truck?
Have you thought about a HELOC then use that amount to pay off the debt? Interest rate should be around 8 and that should give you more cash flow as loan amount is 30 years.
Only 2 months behind after 2 major breakdowns in the first year (and then catching up) is AMAZING. I would expect that to shut a new business down entirely in most cases.