Cost of run vs. profit - General Motor Clubs by Beaconsoftco.com - Motor Clubs - Tow411 - Message Board - Yuku

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Cost of run vs. profit

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WEBOSLH	Cost of run vs. profit		Lead	[-]
Posts: 360 06/13/2008 17:46 Indiana	Tags : None I was't sure where to put this ,sorry. Without mentioning a club in particular, I was called today to do a run a little bit out of my area. I accepted the run , then figured how much I would make on it . Eight dollars for a tow. No I don't think so, I called back and refused the run because of literally no profit. Now, if a tower doesn't know what it costs them , per mile to run their truck, some one could have done this run at a loss and not known the difference until at the end of the month no money for fuel. It isn't hard to figure the cost per mile to do a run. Why did I take the time and space here for this? I'm convinced ,that even as the fuel continues to rise, there are towers who are working at a loss and don't know it. As many people here have said just because your doing runs, club and private, doesn't mean your making money. Now right behind this run I did a jump start, and believe it or not , I cleared much more in profit than with the tow that I turned down. Because the cost of the service truck is 1/3 of what the cost of the wrecker is. Not near the expense or the time involved. I don't mean to ramble on but thru this forum I have learned how to be profitable. In a way it isn't that hard. Just keep the jobs comin'. I contend that EVERY run done MUST be able to stand on its own as being profitable or the tower who don't know what his costs are won't be standing very much longer. Not slamming , just kinda thinkin' out loud. Yeah I know , keep my thoughts to my self, (chuckle, chuckle).
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Wade200		#1	[url]	[-]
Posts: 3230 06/13/2008 23:41 Since 2005 WreckMaster #071457 TRAA #9951 Alabama	That happens to quite a few towers on a regular basis. They run every call they can and then wonder where the money is at the end of the week/month/year. Most people never figure in the spaced out maintenance issues (tires, oil, brakes, etc.) It's no big deal when you don't need those items, but when you haven't been figuring them in and saving up it can bite you. By the time most realize what they are doing wrong, they can't catch up. If you don't break down each cost you will never save enough to pay for it all. Here is an average rollback of ours that runs 40,000 miles per year. Expense - Cost Per Mile Operator - $1.00 Office/Dispatching - $0.29 Insurance - $0.09 Tags - $0.04 Tires - $0.05 Maintenance - $0.06 Fuel - $0.60 Truck Note - $0.33 Total Per Mile - $2.46 This is with no profit or any other expenses you might incur. Although, even when you know your cost you can still get stuck making less money than you could. Our heavy tow truck went 175 miles out of the area today and lost out on two local tow jobs. The two jobs would have brought in nearly triple what the long run made and also cost way less in fuel. But, had we not went on the long haul we may have had nothing. It's all part of the good ole very unpredictable towing business. Daniel Wade
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bigberthastowing		#2	[url]	[-]
Posts: 3295 06/14/2008 08:49	Put nicely Daniel! Big_Berthas_Towing@msn.com www.Big-Berthas-Towing.com
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AB TWG n REC		#3	[url]	[-]
Posts: 106 06/14/2008 12:55	Daniel, You are so right. We do the same thing, but a little differently... I have a spread that calculates what I call "Gross Profit" that takes all the variables out (fuel, operator, worker's comp ins., routine maintenance, merchant fees, etc.), then we have our fixed expenses (admin, insurance, truck notes, etc.) that come out giving us our "Net Profit". We recently ran a run from Cincy to Detroit that we didn't run through the calculator before taking the call.. we were out when the call came in so we ballparked it and went... when it was all said and done we walked away with $19.50 to the company on the run after variables were removed. (It also didn't help that the guy changed his mind at the end of the run and decided to pay credit card... cha-ching, 3.6% gone right there). We really have to be careful right now. If we don't we're working for free without even knowing it. It's not the same game as when fuel was $2.29 a gallon. Have fun and stay safe!
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DAVID ISHUM		#4	[url]	[-]
Posts: 23 06/14/2008 13:24	I have drastically decreased the my towing coverage area for MC, I'll go futher out for regular road call lockouts, jumpstarts, etc... but I use my small service truck. It just doesn't pay to start up the tow truck if it iisn't gonna pay ya money.
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Wade200		#5	[url]	[-]
Posts: 3231 06/14/2008 15:03 Since 2005 WreckMaster #071457 TRAA #9951 Alabama	Yeah, I use a spreadsheet as well. Our fixed costs and variable costs are also figured separately. All I have to do is type in what the current rate (cost) of each thing, my sheet calculates everything for me. Daniel Wade
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