New Video! The importance of working with realistic numbers
Sprinter vans in the expedite industry are all the rage. But do you have all the right info you need to get started?
Today's episode covers the importance of working with REALISTIC numbers when formulating your business plan..
Follow along ?? with Rob Podeszwa of Jung Express, and host Brandon Baxter, as they discuss the ins and outs of Sprinter van ownership within the world of Expedite.
It's ExpediteNOW!
Transcript:
Brandon Baxter: Welcome to the Expedite Now podcast presented by Expediters Online at Jung Express.
I'm your host, Brandon Baxter. My guest, as always, is Rob Podeszwa.
Rob's a recruiter with Jung Express, and he's here to discuss the ups and downs of running sprinter vans in the expedite industry.
Rob, thank you again for joining me. How are you today?
Rob Podeszwa: I'm doing well, Brandon. I'm doing well. Always a pleasure to join you with this.
Brandon: You know, in our first recording, we really set the tone for what this series has been about, which is how someone might get into the expedite industry as a sprinter van owner operator.
Episode 2, it highlighted the importance of building a business plan, but more so how to conduct proper research while, you know, episode 3, it addressed how to put all of those numbers together in order to form your business plan.
So Rob, with that being said, what is it that we're discussing today?
Rob: Today what we're gonna do is we put those numbers down on paper, but.
They, I'm sure people are gonna look at those numbers and be like, well, no, I need to make more, or how do you adjust those numbers? That's what we kind of wanna discuss today.
So, you know, and this will help you; if you put all these numbers down on paper, again, that helps you to be able to decide to figure out how much can I spend on a van.
Again, as we talked about and I think our first episode, one of the mistakes a lot of people make is they go out and buy a van first and then they start figuring out how to get into the industry and who to sign on with things like that. And so you can see in the example that I showed there is that was you taking a loan for $40,000. Now that's your loan amount, so depending on how much money you're putting down, stuff like that.
But if you put these numbers together, you do your research, you put the numbers together, find out exactly how much you can afford to put into that van and then adjust accordingly - buy the van that's gonna fit your business plan from a number standpoint.
I was suggesting doing the 50/50 rule is what I always suggest: 50% of what you bring in goes to your personal account, 50% stays into your business account.
Your personal account that pays all of your personal bills, you know, whether you have a mortgage or home bills or whatever, In the example there, we were shown $46,750, which was half of the $93,500.
if you say, oh no, my personal bills, I need, I need $60,000 in order to pay my personal bills.
OK. Well, again, now that means on a 50/50 rule, you need to gross $120,000 in order to do that in order for your business to be successful.
Now, you could say, well, I'm not gonna do the 50/50, I'm gonna do 60/40 in order to get to my personal thing.
OK. Well, now there's a good chance your business may not make it then. You're, you're kind of, you're, you're not going with something that works for sure, you're going with the possibility of it working.
Let's go back to, let's say you need to make $60,000 personal. So now you need to gross $120,000.
Again, the way you figure out your gross income, what's the money coming into your business, is the two things: it's the number of miles that you're doing and what's your rate per mile.
So if you say I need to make $120,000 well, If you are, if you, then you say, well, I think I can make a buck a mile. So that means you need to do 120,000 miles.
What does that equate to in terms of how many miles you're gonna have to do per week?
If you take 120,000 miles, and the most common thing that people say, I say, OK, how many weeks are you gonna stay out on the road? Again, I always recommend you better stay out there at least 3 weeks at a time, preferably 4 to 6 weeks.
The most common one that I hear from people is I'm gonna go out for 3 weeks and I'm and I'll be off for a week. I'll have 3 weeks in.
That means you're working 39 weeks a year.
So now if you take 120,000 miles and you divide it by the 39 weeks you're working, that means you need to average over 3000 miles. It's 3,077 miles a week.
Be realistic. Find out what the averages are because this industry is a roller coaster ride. It can be extremely busy and it can be slower, and you really, really need to base your business plan on what those averages are so that you will be successful.
OK, if you set all these numbers at the high end, that's gonna be extremely difficult to achieve. And again, I get so many phone calls from drivers that are telling me they're they're they got in this industry, they bought their van, they signed on with companies, they're not getting the miles, they're not paying their bills, and they're panicking. Again, where people tell me, oh no, I get $1.10 a mile, you know, I'm like,
so all the time you get $1.10 a mile and everything, well, I'm like, so, you know, most people in this industry know Laredo, Texas. A ton of freight that goes down there, it can be very hard getting out of there.
Yes, you're normally gonna have to take a discount.
I'm like, so you're getting $1.10 a mile coming out of Laredo? Well, no, no, I, I got to do a lot less to get out of there.
So again, you're not averaging $1.10.
Brandon: That average drops
Rob: You're averaging less.
You need to look at these things. You're putting the correct numbers down on paper. Again, if you do 3 weeks on, 1 week off, that means you're working 39 weeks.
Use that to figuring out for your what you're doing per week for your mileage, OK?
If you say, well, I'll go 4 weeks and and take 1 week off, OK, that means you're doing 41 weeks that you're working.
Again, depending on what you're gonna average per mile, that's gonna tell you how many miles you should do per year.
If you're gonna do 50 weeks and take 2 weeks off, so you're working 50 weeks. That is where I actually will recommend to people to get your business off the ground, right? For the first couple of years you gotta put the time in. You gotta sacrifice. You need to stay out there as much as possible and stay out there working.
Don't come up with, I'm only gonna work 39 weeks a year and I'm gonna be able to do 3500 miles a week and I'm gonna make $1.10 a mile.
You put all those numbers down for your business plan, you're gonna fail.
Brandon: How common is it that you hear those type of, of reasonings from a driver or perspective owner operator when you're talking with them, right? You know, they, they come to the table with that description, you know, this is what I've been doing and in your mind you're thinking, well, that's, that's not necessarily an average, that might be, you know, that's what you've done up here, but you're not considering what you've done down here.And now let's, let's try and take that, where does that fall in between, you know, how, how common is it that you have those types of conversations?
Rob: Very common. Unfortunately, it is extremely common.
I get multiple phone calls like that daily.
it's unfortunate. It's unfortunate.
That's why, why we wanted to do these videos to help people to prepare them to succeed.
Brandon: As we prepare to wrap up this episode, is there anything else that maybe we haven't touched on or that you'd like to add or, or maybe even tease for the upcoming installment?
Rob: Oh, I think for this episode, I think we're pretty good.
Again, just please, please, please, people, put a good business plan together and use realistic numbers and then you'll be successful.
Future episodes, we're gonna get into a little bit more. What's life on the road? What are, what do I have to do? This is a company I really want to sign on with. How do you sell yourself to that company? and we're gonna talk a little bit more about that.
Brandon: I love it. Plenty of good stuff still to come, so stay tuned.
I love it.
Rob: Sounds good.
Brandon: All right.
Well, Rob, thank you very much.
And this has been Expedite NOW presented by Expediters Online and Jung Express.
I've been your host, Brandon Baxter, until next time.