four to equal one truck's revinue?

[Mikey P]

I was reading a Steve Marsh article and was interested in hearing what you all think about his math...

It is reasonable to assume that an owner/operator with no assistance from a spouse can build a company to the point of earning $100,000 for the owner. To earn the same amount using employees would probably require four trucks, an office and office staff.

The rest of the article is here

So in his opinion trucks two and three are money losers, I've heard that before but with SO many variables, I'd be curious to hear what you "Few Truckers" have experienced.

 

[hogjowl]

I ran three trucks for several years before I came to the realization that I was much better off with only one. I think he is correct in his statement.

 

[Desk Jockey]

I agree and dis-agree! (How bout that one piglet )

As Mike said depends on too many factor to be a blanket statement. If you doing a bunch of low margin work sure, but if you have a decent margin I can't see how those numbers would work. But then I'm no guru either so maybe he actually has data to support his position where I am just making an assumption.

 

[hogjowl]

So, it's profitable unless it's not. I see your point.

 

[Jerry]

Could be possible, but you would have to gross a chunk to pull 100K out .

 

[Mikey P]

better off in the financial sense of keeping more money at the end of the day or better off in more naps, less chimp blunders and less head aches trying to think of ways to keep the other vans moving?


What was the dollar amount difference?

 

[Desk Jockey]

So, it's profitable unless it's not. I see your point.

I knew you'd love that! The fence is a good place to be, just go with the side that's winning!

 

[Kipp]

It just depends how much net you can hang on to as you add expenses to your business.

As a O/O you have the luxury of not loosing any significant money if the van sits. Once you add employees, office, shop you have to out run those expenses every month.

I agree you can't make a blanket statement like that and have it hold true in every case. You could do it less trucks with the right model. Or more, or never make money and go under.

Also another factor to consider is its not adding 2-3-4 more of you it's employees and with that comes training expense, learning curves, mistakes etc.

Done right though there's good perks for being off the truck the biggest being you have a legitimate company to sell in the end.

 

[Mikey P]

are you back in the game now 1k?

 

[Kipp]

No but I bought a TM so I could still be a part of the club lol

 

[hogjowl]

Back to the subject at hand ... there are exceptions to every rule, but generally speaking what Marsh is saying is true. Don't complicate the matter with ficticious examples of what COULD happen. If you take a thousand cleaners and put them into a 3 truck operation, Marsh's example will hold true for 999 of them. If not 1001 ...

 

[Mikey P]

in my county of 250k people there is not one company running more than two full time trucks.

 

[Kipp]

Personally I think a good multi truck growth strategy would to stay on one truck until you have the net and cash flow of 3-4 trucks running to step off.

 

[Ken Snow]

50-75k profit per truck if the work is there.

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[ACE]

It would be very hard to net 100k in my market as a true owner op (No help at all). With a right hand man, it would be Possible. It would require long hours both on and off the truck.

To net 100k from a carpet cleaning business that does not require day to day involvement, you would have to be running around 4 trucks. I doubt many companies function as a passive income for long in our industry despite what the gurus say.

I envision a happy medium. I would like to be 90% off the truck. I will always be involved in every aspect of daily operations. This seems like the sweat spot: nice profits, low dept and allowing the owner to enjoy free time when desired.

 

[Kipp]

50-75k profit per truck if the work is there.

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Wouldn't those numbers change depending on the number of trucks? Every truck you add would increase net percentage because fixed costs remain the same.

 

[mirf]

It just depends how much net you can hang on to as you add expenses to your business.

As a O/O you have the luxury of not loosing any significant money if the van sits. Once you add employees, office, shop you have to out run those expenses every month.

I agree you can't make a blanket statement like that and have it hold true in every case. You could do it less trucks with the right model. Or more, or never make money and go under.




Also another factor to consider is its not adding 2-3-4 more of you it's employees and with that comes training expense, learning curves, mistakes etc.

Done right though there's good perks for being off the truck the biggest being you have a legitimate company to sell in the end.

having somthing to sell is a great perk!

 

[Shane Deubell]

Depends on revenue per truck and misc revenue.

Company #1 with 4 trucks doing $110k a year in revenue and 0 misc revenue = $440k gross and he is right

Company #2 with 4 trucks doing $200k a year in revenue plus $100k misc revenue coming from water damage rentals or janitorial for example = $900k

Big Difference
The biggest lesson i have learned from the pro's is squeeze more revenue/profit per asset, you can apply that to trucks, marketing campaigns,overhead etc.

 

[Ken Snow]

X2

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[Jack May]

Sure, I probably kept more in my pocket when I was a o/o but I worked way more hours too!

2 trucks meant a lot more overheads, like he raises such as office, and office staff, technicians etc, but it also meant I was able to cut back my hours and not take too much of a hit on my own personal salary.

Owner operator can more easily and quickly respond to change and can more easily tighten the belt and reduce overheads when the need arises. Biggest and hardest decision I ever have had to make in business was making two part time, but permanent staff redundant due to business slow down. As it was, I hung on between 3-6 months longer than I should have trying to make it work or hoping the swing act the other direction was just around the next corner. Anxiously trying to implement various strategies to increase workflow.

John

 

[rick imby]

Getting off the truck seems to be the dream for a lot of guys.

Be careful what you wish for may not be as much fun as you thought.

More trucks means more--overhead, potential gain, potential loss,

Rick

Unlimited prepaid cell phones

 

[Ken Snow]

Always with risk comes potential for gains or losses.

Anyone making absolute statements about anything in our or any business seems ludicrous. 1 person could make a profit of 100k per truck in a multi truck scenario and another may actually lose money~ and everything in between. There are so many factors that come into play it seems silly to generalize.

 

[Vivers]

More money, more problems. I was growing fast and pulled back do to many headaches with employees, quality slipping and just plain was a PITA. Much happier with less employees and I feel the quality is back on point as well.

 

[SMRBAP]

Always with risk comes potential for gains or losses.

Anyone making absolute statements about anything in our or any business seems ludicrous. 1 person could make a profit of 100k per truck in a multi truck scenario and another may actually lose money~ and everything in between. There are so many factors that come into play it seems silly to generalize.

Agreed 110% Way too many variables for anyone to put finite numbers to it. I do however agree with the notion - going from the O/O world to a multi-van operation, isn't automatically whatever money you made as an O/O with 1 van, to your profits times whatever number of vans you step up to - and in reality once you add a the overhead that comes with a 3-4 van operation - a well oiled 1 man show working from home less that overhead - isn't going to fall too far behind that 3 van operation trying to grow.

I made more money with 2 vans working from home with myself in office and 2 techs, than I do with 5, a commercial location, 5 techs, and 1 full time and 1 part time office person - (totally removing the restoration revenues from this statement).

Ultimately the plan wasn't to end growth here, and I anticipated as best I could the costs of growth, and where the bottom line would lie at each stage - so far with pretty good accuracy - but that's for my co., in my market - I wouldn't expect that shoe to fit any other firm in their market.