1/19/17

Know Your Truckstops:

Net Opera5ng Costs
Featuring:
Darren Schulte, NATSO

WHAT ARE WE DOING HERE

TODAY?
1) What is net operating cost (NOC)?

2) Explain the concept surrounding net operating

costs and help operators learn the many facets they

include.
3) The session will uncover simple actionable ways
to improve NOC
4) Apply best practices that can bring their NOC
down.
5) Cost is the New Performance

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WHAT IS NET OPERATING

COST?
Net operating cost commonly refers to the amount a

business spends to sell its wares, broken down either

by a particular item or for the business as a whole.
Derive that amount by calculating all your fixed costs
and variable costs. Controllable & Non Controllable
When you can associate those costs with particular
items, the information can teach a business which items
are the most profitable, which are the least profitable or
which cost reductions are most impactful.

THE SIMPLE VERSION OF

NOC
All the money you are making [Profits] all the

stuff you are spending money on [Cost{s}].

The wise ones DO Not Include Fuel Profits!!!!!!!!!

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WHY YOU MUST KNOW

WHAT YOUR NOC IS
Have you forgotten when net fuel margin was <5c?
Your company's largest revenue producer is your

core customers largest expense

Crude Oil is up over last year 27%
If your costs increased since mid November 20% to
30%, what would you do?

WHY YOU MUST KNOW

WHAT YOUR NOC IS

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TRACKING THE NUMBERS

Comparing net operating costs with previous years

data or industry benchmarks can help a business

determine its competitive position in the
marketplace.
If your net operating costs are lower than those of
your rivals, you're in a better position to ride out a
market downturn or force them to lower their
prices to an unsustainable level.
Higher net operating costs means your business is
vulnerable to changing market conditions, because
you have less margin for error.

TRACKING THE NUMBERS

It does not matter how you track it, whether you use

cents per gallon, percentage or hard dollars, it matters

that you know what YOUR NOC is so you can begin to
improve it.
It does not matter which costs you use fixed, variable,
controllable or non controllable in your equation.
Identify the costs that make to most sense to you, those
that can make the biggest difference improving.

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ACTIONABLE NOC
Does your LOCATION[S] make money without fuel?

ACTIONABLE NOC
Growth is a mindset!
You can not simply cost contain your business to

long term success and profits, you have to grow

Grow Revenue, Grow Locations, Grow Profit, Grow!
Growth is significant to improving NOC

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ACTIONABLE NOC
It matters that you focus HARD on growing non-fuel

revenue

ACTIONABLE NOC
It matters that you focus on driving non-fuel gross

margin dollars

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ACTIONABLE NOC
Do not get hung up with percentages, MONEY pays

the bills, not percentages.

Margin dollar production impacts NOC, not
percentage

ACTIONABLE NOC
Stop giving lip service to the umbrella of engaging

your employees

Every individual makes contributions to

improving NOC
Make individuals feel like they are part of the
solution not part of the problem.
Bonus Programs tied to improving NOC
Suggestive Selling Programs tied to improving
NOC
Average ticket improvement
Item Count improvement

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ACTIONABLE NOC
Be honest about your costs, stop fooling yourself

ACTIONABLE NOC
Focus on your controllable, Stop wasting time and

energy on non controllable

Cost Containment tied to improving NOC
Shrink Control tied to improving NOC
Safety tied to improved NOC
Human resource and deployment of labor tied to
improving NOC
Food Service, get serious about it

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IN CLOSING