Hi self-employed Owner Operators. I have noticed that after you deduct the cost of fuel and expenses of running the business that you end up with only a small profit! Any body else in this boat or are we all?

Maybe this is the norm?

What's really scary is that we have a paid off tractor and trailer, no idling for heating, cooling, and power since we have solar power panels on the roof and an inverter that runs all electrical needs, a generator for back-up that sips fuel, computer, internet, fax, printer, TV all run by solar power. We also have a kitchen, refrig, stove, propane heat, bathroom, shower, so no hotel stays ever and no truck stop food. Food costs are low. This truck gets better fuel mileage than most at about 7.5 MPG. All mechanical work done by my boyfriend, so we pay for parts only.

Here's the breakdown of the business:

Flatbed hauling. He will rarely ever take cheap freight. Tries to accept no haul less than $1.65 per mile. He has gotten some as high as $2.50 a mile. Tries not to deadhead. A few times he has had to take cheap freight to get out of a bad/cheap freight area. This is with taking no time off except for DOT required restart.

Gross profit month of February: $ 9,809 (updated, I forgot to add in his latest invoice!)

Monthly expenses:
Fuel cost: -----------------------------------$3,600
Insurance cost: ------------------------------$810
Internet Truckstop: ---------------------------$70
Oil/filter change each month breaks down to:---$70
Additives and oil: -----------------------------$400
Cell phone-------------------------------------$170
Tolls--------------------------------------------$100
Factoring---------------------------------------$369 (5% of gross)
__________________________________________________ _
TOTAL expenses to run business----------------$5,589

Gross Profit $9,809
- Expenses $5,589
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Actual profit each month = $4,220

Okay not too bad! But any one who has a tractor and trailer finance payment and also has to pay a mechanic would quickly go out of business I would think.

This doesn't include self employment tax or IFTA though.

$4,000 a month profit just might seem worth the hassle and hard life on the road. My theory is that fuel has skyrocketed and yet freight pay has not?

I am wondering if the solution is to eliminate the broker and try to go straight to the shipper or does he have to get rid of his flatbed and go for specialty freight that pays more? is this profit normal for all self employed owner operators?

Was that a monthly breakdown of oil throughout the year? (like figuring out daily cost for tires per se) How many miles is he averaging a month? I used to make the mistake of having a service done too soon. Maybe you can check out an oil sample service and service the tractor on their recommendations. You have to figure in all the costs and find the bottom line. Say it turns out to average $1500 a week. You need to pay yourself too so tack on another $500 at least. I figured that I have to average $2100 a week. So whether it takes me 4 days, 5 days to do so within reason can't go over HOS, I have to meet or exceed my goal.

He's incorporated so there's ways to actually "get things on the company". You should have a an accountant handle your taxes. Do you have quickbooks? if not get it. It'll will make things a lot easier plus you can save a copy and give it to your accountant. Did I mention get an accountant???? They are a necessary asset to the business, worth every penny you pay them. Like lawyers, you'll never appreciate them until you need one.

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America Might Not Be Perfect.....But It Remains The Best Place On Earth For The Dreams Of The Average Person To Become Reality.....

i don't own my own truck but pull a dump trailer locally for a small operator - three tractors 2 lowboys dump trailer and three wreckers - i find my own work and am currently only hauling for companies that are adding a fuel surcharge - the biggger quary doesn't have a surcharge and after doing some work for them last week (only thing available at time) found that after paying for fuel and my wages that there was practically nothing left
i stopped at the truck stop at mt morris pa today to get a drink and whatever and fuel was 3.99 highest i've ever seen - Outlaw

My neighbor is an O/O and, when you deduct his expenses, he makes around the same amount as Mike makes being a company driver BUT he has more freedom. So, for him, it's worth it. For us, it wouldn't be because if you don't have friends to help you maintain that truck, it gets way too expensive way too fast. Oh, my neighbor also has fuel locked at 41 cents a litre while it's $1.15 at the pumps!! That's about $2.20 a gallon. And he still only makes as much as Mike makes working 60 hours a week and home every night.

It's all in how much you value your freedom, I guess

Yep, it's all about the freedom. You have to take the good with the bad as an O/O.

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America Might Not Be Perfect.....But It Remains The Best Place On Earth For The Dreams Of The Average Person To Become Reality.....

$170 a month for cell phone??

Kinda pricey.....

I'm finding that more and more contractors will not go for FSC on dumps here in SoCal. What they want want is Supers running at $50 per hour or $50 per load (no mileage paid for you OTR drivers. If you work in Santa Monica and have to take a load of spoil to the landfill 30 miles as the crow flies but can take up to 2 hours each way...oh well, that's your problem) instead of the $85 per hour they should be getting. Heh, I know low-side companies that charge $60 per hour without the 4 hour minimum they used to get. It's getting to be a blood-bath for the dump biz in CA. What are they going to do when Diesel hits $5 a gallon?

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America Might Not Be Perfect.....But It Remains The Best Place On Earth For The Dreams Of The Average Person To Become Reality.....

Hi, yes it's a monthly breakdown on the oil change. He really takes good care of the truck so every 20,000 miles he spends $300 dollars on an oil change and new filter so I broke it down to $70 per month. Yes he does get the oil sampled but I don't know when, I'll ask.

I'm pretty sure he's averaging around 6,000 miles a month.

So in order for you to make enough profit, you have to exceed $2,100 a week which is $10,400 per month. So he needs to increase his gross profit to that level but how? Do you have any suggestions on how to do that? Do you ever take time off? Because that $7,000 a month gross was without taking any time off too. He's new at it too. Did your gross earnings go up as you became more experienced?

Yes he's a C Corp and I'm about to change him to LLC to make taxes easier. Are you saying that he can somehow use his corporation to file his business as a loss? From the looks of it, when I do taxes for this year, it will probably come up as a loss after all the expenses and deductions!

I'm going to get Quickbooks for sure. Right now we barely have our heads above water so I have to wait on the accountant. I guess I can do a search for a local trucking accountant, that would be good for when we can afford one. We are scrambling to refinance our house just to pay for his new transmission and tires ($6,000) but at least after we do, it will last a good 10 years/2 years.

It's 1600 minutes each month (needed to talk with all the brokers and includes an internet signal to his truck laptop).

Can you bump up the miles to 7K?

I know that people want to be home on the weekends but when you own your own business you take the jobs and work the hours that others might not want, at least from the beginning.

I'm still in the dump biz but will be going OTR soon. I worked on weekends and sometimes I worked nights (my phone is with me 24/7/365 too) to establish my reputation as a dependable vendor for the customer. As an O/O you can choose how often you work- that's a blessing and a hindrance at the same time.
There's money to be made for anyone of us who wants to hustle. That's why it's called WORK

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America Might Not Be Perfect.....But It Remains The Best Place On Earth For The Dreams Of The Average Person To Become Reality.....