Entity classification — profit centers vs cost centers¶
Not all Arizona Truck Group (ATG) entities are designed to make money. The family has two fundamentally different financial-model types:
The two classes¶
Profit-center entities¶
Most of the family. Each is designed to earn margin and contribute cash upward.
| Entity | Revenue mechanic |
|---|---|
| Superior Equipment (SEQ) | Per-build invoice to Superior Truck & Equipment (STE) |
| STE | Per-unit truck sale + rental/lease income |
| Superior Truck Rental (STR) | Monthly rental rate × utilization × fleet |
| Cactus Truck Rebuilder (CTR) | Per-build invoice to STE |
| Cactus Truck Parts (CTP) | Per-part sale (retail + B2B to SEQ + CTR) |
| Superior Water Truck Parts (SWTP) | Per-SKU sale + STE lead-gen value |
| Sedona Jeep Builders (SJB) | Per-unit Jeep sale |
| Turo Car Rental (TCR) | Per-trip rental on Turo |
| Desert Equipment Transport (DET) | Per-load freight invoice |
For these entities, the dashboard's profit/margin/throughput KPIs and the default Needs Action rules (low margin, declining revenue, AR aging, etc.) make sense.
Cost-center entities¶
| Entity | Goal |
|---|---|
| Sonoran Taco Shop (STS) | Break even while paying the operator a good living wage. NOT a profit center. |
For STS, the standard profit-style KPIs and Needs Action rules don't apply — and would actively mislead the operator and observer about STS's performance.
Holding entity¶
| Entity | Role |
|---|---|
| Arizona Truck and Equipment (ATE) | Holds the shares of operating entities. Operational model of ATE itself (real estate? IP? management fees?) is pending. |
Dashboard implications¶
The dashboard system applies a shared KPI template to all entities by default. That works for the profit-center class but breaks for STS:
- "Margin %" — meaningless for STS (break-even target = 0% margin)
- "Revenue growth" — irrelevant (revenue should match cost, not maximize)
- "Aged AR" — possible signal, but only at small dollar amounts
The dashboard for STS needs STS-specific overrides:
| Standard KPI | STS replacement |
|---|---|
| Margin % | Cost ratio (revenue ÷ total cost; target ≈ 1.0) |
| Revenue growth | Meal volume (per day / week) |
| Top customers | Customer mix (% ATG-yard vs % neighbor-yard) |
| Profit / EBITDA | Operator wage vs benchmark ("good living wage" tracked as actual vs target) |
Needs Action implications¶
| Rule | Profit centers | STS (cost center) |
|---|---|---|
| Low margin | Fires | Doesn't fire (margin isn't the goal) |
| Revenue declining | Fires | Doesn't fire (revenue is incidental to service mission) |
| Cost ratio > 1.05 (losing money) | Fires (as a loss-warning) | Fires (break-even breach) |
| Operator wage below market | n/a | Fires (the principle is "good living wage") |
| Meal volume dropped X% wow | n/a | Fires (proxy for service value) |
The rules engine (_needs_action table per entity, see
Cash-flow rules)
needs to honor entity classification when evaluating rules.
Implementation status¶
- Profit-center entities: existing dashboard + Needs Action rules apply
- STS: dashboard inherits the profit-style template and needs a per-entity override. WDM follow-up task to:
- Define STS-specific KPI set
- Define STS-specific Needs Action rule set
- Wire STS dashboard to render those instead of the default
This is a dashboard customization task, not a business-analysis task — sits with WDM, not MC-ATG.
Future additions¶
Brandon may add more entities over time. As they're added, classify them:
- Profit center → apply the default dashboard + rules
- Cost center → write per-entity overrides
- Holding / passive → minimal dashboard (cash + investments + tax positions)
The classification belongs in this doc + the hub card subtitle (e.g., STS's subtitle is "On-Site Food Service · Break-Even" — that's enough signal for anyone reading the hub to understand the class).