Turning a Cash-Strapped Haulage and Repair Business into a Profitable Operation – Simon’s Story
Introduction
Simon had spent years in the haulage industry, but after his employer closed down the business, he found himself made redundant. Determined to take control of his future, Simon set up his own haulage and vehicle recovery business.
He worked hard, ensuring his trucks were on the road and his repair shop was always busy. However, despite his best efforts, he was constantly struggling with cash flow. His VAT bill was always a surprise, he didn’t know how much each lorry was costing him per mile, and even though his recovery and repair business was thriving, there was never enough cash in the bank.
Frustrated, he turned to Josef, his Virtual Finance Director (VFD), for help, saying, “There must be a better way.”
Situation
Simon’s business was generating consistent revenue, but the financial reality was far from stable:
- VAT bills were always a shock – His accountants only calculated them just before the deadline, leaving Simon scrambling to find the money at the last minute.
- No visibility on lorry costs – He had no way of tracking how much each vehicle was costing per mile, meaning he didn’t know whether his pricing was covering his costs.
- The repair business was always busy but never had cash – Despite high demand, profits were being drained somewhere in the operation.
- Hourly repair rates were too low – Without a clear costing structure, Simon had been under-pricing his services, leaving little room for profit.
While the business looked successful on paper, the financial reality was unstable and unsustainable.
Obstacles
Josef quickly identified three critical financial challenges that were causing cash flow stress and poor profitability:
1️. Poor VAT management – Simon had no system to track VAT liabilities throughout the quarter, leading to last-minute surprises and cash shortages.
2️. No cost-per-mile tracking for the lorries – Without knowing his true operating costs, Simon had no way of ensuring his pricing covered expenses and delivered a profit.
3️. Undervalued repair services – His hourly rates were too low, meaning even with a busy workshop, the business wasn’t making enough money.
Unless a structured financial approach was introduced, Simon would continue working harder than ever, yet still struggling with cash flow.
Action
Josef designed and implemented a financial strategy to give Simon full visibility, control, and profitability in his business:
✔ Introduced real-time VAT tracking – Integrated accounting software that automatically calculated VAT liabilities throughout the quarter, preventing last-minute surprises.
✔ Created a VAT savings plan – Set up a separate VAT account where money was set aside gradually, ensuring Simon always had funds available.
✔ Implemented cost-per-mile tracking – Developed a system to track fuel, maintenance, insurance, and depreciation per vehicle, allowing Simon to price jobs correctly.
✔ Reviewed and adjusted repair rates – Calculated actual labour costs, overheads, and target profit margins, ensuring hourly rates reflected true costs.
✔ Set up cash flow forecasting – Provided Simon with a clear financial picture, allowing him to plan ahead rather than constantly firefight cash flow crises.
✔ Trained Simon on financial awareness – Equipped him with the tools to track profitability, monitor expenses, and make data-driven decisions.
By aligning pricing with real costs, ensuring VAT was planned for in advance, and introducing financial visibility, Simon could now operate with confidence and control.
Result
✅ No more VAT shocks – Simon always knew how much VAT he owed well in advance, allowing him to plan for it.
✅ Proper cost tracking for lorries – With cost-per-mile data, Simon accurately priced jobs, ensuring he was charging enough to cover expenses and make a profit.
✅ Profitable repair services – Adjusting hourly rates meant that every job contributed positively to the bottom line, rather than just covering costs.
✅ Stronger cash flow – With improved pricing and better VAT planning, the business now had consistent cash reserves, reducing financial stress.
✅ More financial confidence – Simon was no longer operating blindly—he had the data, tools, and strategies to manage his business profitably.
Conclusion
Simon had always assumed that working harder meant more success, but Josef’s intervention showed him that without financial clarity, even a busy business can struggle.
By implementing real-time VAT tracking, structured pricing strategies, and cost-per-mile analysis, Simon transformed his business from one that was constantly fighting cash flow problems into one that was financially stable and profitable.
Instead of working harder for less, he was now working smarter for more—ensuring that every mile driven and every hour billed contributed to a stronger, healthier business.
With better financial oversight and structured planning, Simon’s haulage and repair company was now on a secure path for sustainable growth and profitability.
