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  • Writer's pictureTristan Wilson

Planes and Plants

A few weeks ago, someone told me the paving business is like an airplane. A plane needs a certain amount of passengers to break even. Once the airline gets to that number, they make money.

Asphalt is the same. You need a certain amount of work (say 150k tons per plant per year depending on market size) just to cover all your fixed costs. Asphalt plants like airplanes are expensive.

When you get past breakeven is when the profitability magic happens. That’s when you can start making money not just on your jobs, but also on equipment, supervision/overhead, and plant transfer. That means you’re in the money. There is no way to make money without at least getting to break even. If that means work has to be taken a bit cheaper to get there, then so be it.

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