Your business plan should be a road map to where you are going.
 
Recently I searched back into some old files and found a copy of my original "Business Plan." It was fun reading the old documents from 1996. 
 
The 1996 documents included our goals of the company, target market, competitor strengths/weaknesses, our own strengths and weaknesses and a financial budget. The initial budget included a projected income as well as expenses. The expenses were itemized to include fuel expense, truck and trailer payment, truck and cargo insurance, tags, permits, heavy use tax, property tax, maintenance fund, tires, owner salary and health care insurance. Also, we included the projected profits in addition to the owner salary.
 
The figures were based upon a 48 week year. All costs were inflated and all income had been reduced from actual numbers. I made sure this budget was set up in a conservative manner. I wanted to be sure that in a worst case scenario, there would be enough money available to support my family. For example, I figured on paying all my expenses over 48 weeks even though there are 52 weeks in a year. Fuel mileage was calculated at 6 mpg when I knew I could attain 7 mpg. Fuel was figured .50 higher per gallon. I calculated how long tires would last and divided that in half. (Some people told me "there's no way you'll go through that many tires in a year.") They were right as they lasted for nearly three years.
 
On my income figures, I calculated conservatively by using market forces to determine the rates in the freight lane to be served. For good measure, I reduced those numbers by one third. When sharing these figures with friends and peers in the industry, I was told by all "there is no way I should ever have as bad a year as the one projected on my business plan".   
 
I have witnessed all too often people who paint a rose colored picture when they begin a business. I would advise to make your figures conservative and figure on a worst case scenario while shooting for the stars as you put your plan into action.
 

Comments (2)

Henry Albert

Henry Albert is the owner of Albert Transport, Inc., based in Statesville, NC. Before participating in the "Slice of Life" program, Albert drove a 2001 Freightliner Century Class S/Tâ„¢, and will use his Cascadia for general freight and a dry van trailer. Albert, who has been a trucker since 1983, was recognized by Overdrive as its 2007 Trucker of the Year.

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It is good to be prepared as you never know when Murphy will show up.

April 30, 2016 19:06:42 PM

Sounds like a very successful method to put together a business plan. Another key element is to actually execute the plan as laid out. I've met a couple people that had a plan and then failed to follow it. Executing the plan is the other half of the story.

October 07, 2015 8:53:59 AM