Welcome to CFF-U Business Series!

Welcome back to CFF university. We’re in chapter 10 here. Chapter 10 is my favorite. Well, one of my favorite chapters, I love all these chapters. And I think every one of these chapters helps you run a better business. It’s the reason we’re doing CFF university. To help you, our client, run a better business.

You already know how to haul freight or tow cars or excavate a building site, but not everybody knows how to run a great business. And that’s why we’re teaching you how to do that in CFF university. This chapter is something you should do every time.

What Is Your Next Investment?

You’re thinking about buying a piece of equipment, regardless of the reason, whether you want to buy a piece of equipment, because you need to trade out the fleet. You have a new contract and the, and the customer says, Hey, if you buy five more trucks, I give you more freight.

If you have a new driver that you want to hire, but you have to buy a truck to put them in, never buy a piece of equipment until you run it through the budget. Builder budget builder is a piece of software, simple software that we’ve built at commercial fleet. It’s free. It lives on our website at www.commercialfleetfinancing.com upper right hand corner, click budget builder.

How Much Revenue Will You Make Per Month?

We have a video on there of a tutorial video, but I want you to run every purchase through the budget builder. So you know what you’re going to make off the piece of equipment. So let’s get into what the budget builder looks like. Remember C F F nationwide.com upper right-hand corner, click budget builder. That’ll bring you up to the screen. And when you get there, you’re going to answer a couple of very simple questions to prove out how much money will you make or not make on the purchase of a new piece of equipment. The first question asked in the budget builder is how much revenue will you make per month?

So let’s walk through this together so you can see it. How much revenue will this piece of equipment make you per month? And let’s just say, it’s going to generate $20,000 a month in top line revenue. So you buy a piece of equipment, you put it to work for a month, and that truck generates $20,000 worth of revenue put in $20,000.

Monthly Payments

The next year question we’re going to ask you is how much is your monthly payment going to be? Now, this is a variable. It depends. Is it new? Is it used? Are you putting big money down or you’re not putting money down, but let’s just say that your monthly, payment’s going to be $2,000 a Month. Put that in the Next is how much are you going to pay your driver? And we see this all over the map for customers, but we’re going to suggest that you would put in $5,000 a month, you’re going to pay your driver $5,000 a month or $60,000 a year to drive that truck. Or You put in 5,000.

Factor Fuel Cost & Maintenance

The next question is what’s to be the fuel costs. Now that’s a huge variable, right? Depending upon what the price of gas is or diesel is. But let’s just say that in order to make $20,000 a month, you’re going to spend $5,000 a month in fuel, might be on the high side, but let’s be more realistic about say it’s $5,000 put in 5,000. The next is how much is it going to cost you for insurance on this piece of equipment? And a lot of customers get confused on this. Insurance is expensive. So put in a thousand dollars a month. And the last question that we ask you in the budget builder is how much are you putting away for miscellaneous expenses, blown tire, tow, bill repair and maintenance put in a thousand dollars and now hit calculate. And when you hit calculate, that will produce a $6,000 estimated monthly profit on that truck purchase.

Factor Profit From Your Truck Purchase

So, you know, if the truck is going to bring in $20,000, and these are going to be your primary major expenses to it, it should spit out $6,000. Now, depending upon your industry that might be higher or lower. Um, some of you on $20,000 in revenue might make $12,000 in profits. Some of you might make $8,000 in profit, but to be conservative, which is how we’d like to play it here at commercial fleet, we say those numbers will produce a $6,000, monthly income for you off that one truck. You’re going to multiply that in your own mind times, 12 months, and it will generate $72,000 a year in profit off of that purchase off of that one truck. Now you have to then make the decision of, do I want to buy this truck and make $72,000? And we would encourage you? Yes, you should make that. Um, should, that should be a, yes. That should be a check. Let’s do this deal.

Find Your Values – Recap

The beautiful part about the budget builder is you answer the questions truthfully. We don’t answer the questions for you. You answer the question. So if the revenue isn’t $20,000, but those expenses are the same. And that truck is only going to generate $15,000 a month. And all those expenses stay the same. Guess what? You won’t be making $6,000.

That’s why we say commercial fleet never Buy a piece of equipment until you run it through the budget builder, to give you a good idea of what you’re going to make on it. If that scenario played out where instead of $20,000 a month in revenue, you are going to generate $15,000 a month and those expenses stayed the same. And therefore you weren’t going to make any money on the purchase. In fact, in that scenario, you would lose a thousand dollars a month. Maybe it’s not the best decision, or you have to figure out what expenses can I get lowered, or how do I get $20,000 a month off of revenue for that piece of equipment that I’m about to purchase, right? Renegotiate the contract, run more miles. You know how to fix that problem. You know how to truck, you know how to, you know how to do construction, you know how to do delivery.

You’re In Control

So you’ve got to figure out how much money you can make off of that piece of equipment. But we think the example I just gave you is reasonable for an over the road trucking company on what, what they should be doing per truck per month. Now the beautiful part about the budget builder is your in total control. So if your customer says, I will give you enough freight to support five more trucks and you run it through the budget builder. And it shows that you’ll make $6,000 a truck or $72,000 a year. And you multiply that times. Five trucks. Well, congratulations, you’re making $350,000. Now off of that new Contract to add five trucks, The beautiful part about the budget builders. It begins to help expand your mind on what your business could do.

If you got bigger, if you added more equipment, if you have deeper relationships with your customers, if you improve the company culture to improve your driver retention, what could the business do? And now through our simple tool called the budget builder, you can start to expand and figure that out. It’s fascinating to us, how many customers don’t do the budget builder and they make their $72,000 a year thumbs up. But what would it be look like if they had five trucks? Imagine if you could make $72,000 a year Off of one truck and you had 10 trucks Now you’re making $720,000 a year. That’s game-changer money through expansion.

How To Get Bigger – Recap

So we Encourage you always look at how can you, you get bigger And better And more profitable scaling your business. I promise you if you do this step-by-step process that we’re teaching you in CFF university, you will be building a better company, a company that will actually give you the confidence to Scale it. And then through scale, you will make more money, but I repeat, never Buy a piece of equipment until you run it through the budget builder, CFF, nationwide.com upper right hand corner, click budget builder. Enter the information into the fields. Hit, calculate, spits out a number, multiply it times 12 months, and then make it decision. Am I going to do the deal or am I not going to do the deal? And if the deal makes sense to do one truck, should I be doing five? Should I be doing 10? That’s the ultimate question.

Let's move on to chapter eleven.



About Commercial Fleet Financing, Inc.:

At Commercial Fleet Financing (CFF), our pros have given smart advice to fleet owners and owner-operators in the transportation, moving, towing or construction industries for more than two decades. With CFF, finding the right financing solutions is a phone call away and most borrowers secure commercial vehicle financing with ease. To talk directly with one of our finance pros and get started with credit approval in as little as two hours, CFF’s phone number is (469) 281-2962.

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