I’ve been given a lot of questions and guys inquiry and asking newcastle towing company about the industry and what they should do and what kind of newcastle tow truck.
They should buy and you know I appreciate it and I appreciate these people coming to me for advice and keep it coming you know my advice is free for the time being I’ve been getting a lot about questions.
So i don’t know newcastle towing company kind of looking at doing some kind of consultations out on the side I don’t know yeah.
So I have noticed that everybody that calls ends up asking me about the newcastle tow truck that they’re buying and they’re there’s nothing wrong with that but I’ve noticed that a lot of people are just fixated on the price of the newcastle tow truck and when you’re coming into the business.
You know you need to figure out upfront when you’re doing your business plan what your fixed expenses are going to be and what newcastle towing company excuse me and what I mean by fixed expenses are your bills that stay the same every month the newcastle tow truck payment insurance payment.
If you’re renting a yard or space you know that’s fixed census and you know nobody seems to really be looking into what the insurance cost is going to be and I’m going to stress that before you even look at a newcastle tow truck and pull the trigger on the newcastle tow truck insurance is one of the things.
You need to look at first you know we are in a high-risk industry and this is stuff that I’m learning over the last few years there’s a lot of industries that are high-risk and the insurance premiums up to the newcastle towing company that are into logging tree work you know roofing is a high risk in the street.
I guess there’s a lot of injuries and stuff and the same with newcastle towing company you know we’re out on the highways helping people and seems as if lately we’ve been getting you know more and more newcastle tow truck operators have been getting killed more frequently.
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So it falls into a high-risk industry and the reason why I say you need to look into insurance before you look into a newcastle tow truck because there’s a new business your insurance premiums are going to be through the roof.
And they’re going to require a large down payment and newcastle towing company have noticed a lot of insurance companies now a requirement or requiring % down and they’re doing that because this is deposit that they’re going to keep in the event a month into your business venture.
You say this is not worth it they keep that money I guess there’s a big turnover rate and newcastle towing company in the streets so they’re requiring large down payments second of all your annual premiums going to be extremely high.
Because you’re in your first year at business and maybe like that for the first three years unfortunately and it’s very crucial that you stick it out the first three years because once you hit the third year mark your insurance premiums should decrease dramatically.
You know but that’s not always the case if you’re putting in claims if your newcastle tow truck is constantly being issued violations by Department of Transportation you know those are stuff that they look into as well and they’re looking into it even more.
So you know take that in to consider to make sure your newcastle tow trucks in good running equipment good running on it’s in good performance and roll legal because every time you get stopped and you issue with a violation that gets updated into the system.
And now the insurance companies are using that to their advantage to decide what they should try to use a premium now so now going back to fixed expenses so once you figure out what your insurance premium is you know factoring your newcastle tow truck paper and factoring your rent.
I’m going to use my numbers for instance and my insurance premiums just went up newcastle towing company don’t know if you saw my last video but my insurance carrier dropped me with no damage claims.
I’ve been with them for three years and they just said you know what we’re not going to continue insurer unfortunately whenever new when your insurance so I had to go price shopping and I’m everything is sky high running a business is very expensive.
So I’m going to give you my numbers and fey my insurance premium last year was $, a year for five pieces of equipment this year it jumped up to $, a year for two pieces of equipment.
So I downsized considerably just to make ends meet so my insurance premium for the year $, I’ve got $, a year in newcastle tow truck payments and then I got twenty seven thousand dollars a year in rents so dad told us to seventy three thousand six hundred dollars.
Now you know yours is obviously going to be different so you need to take your number and divide it by days of the year and my total mal came out to two hundred and one dollars per day that is what I have to make to just break even.
And pay those expenses off what I also do is I also tack an additional thirty five percent of that on to that number for newcastle tow truck repairs and truck maintenance so those are just fixed expenses.
And you can see it’s a bit when you first started out if your newcastle tow truck isn’t moving for that day you’re out dollars so it’s very crucial that you sit down and you plan ahead because one thing.
I hate hearing is businesses failing and it does happen quite it often in this industry and the automotive industry and the reason being is you know there’s a lot of good providers out there but not good business people.
It’s the same thing in the automotive industry newcastle towing company know a lot of good mechanics I know a lot of good mechanics and fix any car that coming through the door for they’ve got poor business skills they got poor customer skills and that’s where they stuff you know fortunately.
I went to business I studied marketing so newcastle towing company kind of know a lot about the ins and out of business and breaking down the cost of operations and figuring things out and whatnot but you know these are these are the first steps that you guys should be taking.
If you’re looking into a business doesn’t necessarily have to be newcastle towing company this can apply to anything you need to know what you’re up against you need to know what your break-even point is you need to figure out what profit margins are going to be and just don’t be afraid to micro.
You know break it down you know to the smallest you know the smallest variables you know you should know how much your newcastle tow truck is burning in fuel when it’s running down the road at miles an hour when.
It’s sitting there idling you should figure out how much you’re spending on equipment per year in fact it all that ever but this is just a baseline kind of a foundation for you to work with because especially if you feel nothing about the industry.
You know you’re going to dive into this not knowing a damn thing and you’re just going to set yourself up for failure and you’ve heard the saying those who don’t plan to fail and that’s very true so sit down break down your expense and of course.
I got a newcastle tow truck payment here and I always advised that if you get into a business buy everything that you can outright cash because it the end of the month to be honest with you the newcastle tow truck payment sucks and trucks are not really a good investment because they depreciate in value over time.
So if you can buy the you know whatever newcastle tow truck you’re looking at trying buy a cash and save that money on the interest and you know that’s more money in your pocket and to be honest with you if um if I didn’t have a newcastle tow truck payment.
You know I’d probably be around a day for the true break-even point a break-even point also to also take into consideration that age plays a huge factor in insurance premium and in this industry if you’re below the age of newcastle towing company would personally say hold off until you hit that age.
Because you’re going to get hit really hard with the premiums you know that’s one thing why this year all my drivers that are going to be hiring it’ll be over the age of because under the age of you put them on the posse and your rates go up as a business owner that sucks you know.
So take your age into consideration you don’t want to be running yourself to death I mean you the equipment down to the point where you can’t afford to fix it just to make ends meet also to another thing that insurance companies like to see it obviously good dry record.
But if you’ve taken a defensive driving course you know that always helps the newer newcastle tow trucks I also tend to see that they cost more to insure than the older newcastle tow trucks so look into buying an older tow truck I remember my aunt international hundreds.
I’ve had a few of them and in and they were significantly cheaper to insure they might dodge fifty five hundreds newcastle towing company don’t know reason why the dodge minutes have a bunch of safety features.
They have airbags where the internationals don’t could be because the replacement value is a lot higher considering that you know dodge for a rollback right now.
And do one is about $, you know my record can go over a hundred thousand so that could be the reason why and that’s it man and just do as much research as you can if you’re starting a new business go around.
See how many newcastle tow companies are within a certain radius find out what they’re charging looking at a population look into what the median income is these are all things.
You need to factor in when you’re diving into a business because like newcastle towing company said if you’re not planning you’re planning to fail and it’s pretty much what I got for you appreciate you guys.