Is anybody really making enough profit?

Discussion in 'Ask An Owner Operator' started by Omega, Feb 29, 2008.

  1. Working Class Patriot

    Working Class Patriot Road Train Member

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    OH, look into an "S" corp before going LLC.


    http://ezinearticles.com/?S-Corporation-Advantages&id=271237

     
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  3. Omega

    Omega Light Load Member

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    Here's the problem I see. The cost of everything has tripled except incomes! The next great depression is right around the corner if something isn't done to raise incomes. How can the cost of fuel go up $1 per gallon yet drivers are paid the same $1.50 - $2.00 a mile? This is going to crunch drivers right out of the business.

    (I know some drivers are hauling for $1.00 per mile and they are surely going to go out of business sooner or later!):biggrin_25521:

    I guess it comes back to "say no to cheap freight" but it seems so many truck drivers are not in a position to say no. We're lucky that we can be somewhat picky about avoiding the rip-off pay.
     
  4. Omega

    Omega Light Load Member

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    okay brace yourself for this one...he hasn't been home in 3 months!:biggrin_25524:
    he's had no break trying to get ahead. He's been working this whole month for instance with no break except for his DOT required down-time. We're lucky his truck is equipped like a motor home.
     
  5. Omega

    Omega Light Load Member

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    Thanks for the info. I wanted to do an S Corp so I wouldn't have to dissolve his C. I called a lawyer today who told me that he would have to pay himself a salary with quarterly withholdings as an S Corp. To me it seems that taxes would be very complicated with the employee pay. LLC he said does not have to pay the shareholder a salary and has the simplest tax filing. I also read an article that the IRS will red flag for an audit if they find a S Corp that has failed to pay the shareholder a reasonable salary.
     
  6. Working Class Patriot

    Working Class Patriot Road Train Member

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    My First year running was a little tough I was out for two months after a "hit and run" did $15k damage to my truck and 6 mos later it needed an in-frame for $13K. Believe it or not I still did ok out of the box. 2006 my best year I averaged 4 (around $2.5K a week) days a week most of that year. Dumps usually are doing good at 3 days a week (around $2k a week) that's running the ten wheeler # $80 per hour. the End-dump would get $2160-2700 a week. To make more I had to run flood control and you run the piss out of your rig. I had one job that I took from a broker to "get in" a hundred miles from my yard and ran five hundred miles a day total for 8 hours paid work. It's a good thing that DOT ignores dumps because almost everyone on that job was actually working very close to breaking the law regarding HOS. Oh, and dump drivers rarely keep HOS logs too. The fuel cost on that job was bad. But then I could get jobs where I'd sit all day for 8 hours and one load out and burn very little fuel.
    But those days are over. So it's OTR and a lot of hustling for me now.
     
  7. Working Class Patriot

    Working Class Patriot Road Train Member

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    Please find an accountant ASAP. with an "S" corp there are ways not to "draw a salary" or delay making payroll (I just learned this from our new CPA). The tax code is not hard to understand but sometimes you have to delegate and include others in your business from time to time. We do monthly payroll with ADP :biggrin_25510: sometime they take out the deductions without sending the courier over and that $500 short fall in the bank account can ream you badly.:biggrin_25513:

    Where are you guys getting your loads from, load boards, brokers, lease? Maybe I missed something here. Being out that long you should be making some money but then again from what everyone has told me, freight runs slow for the first three months of the year.
     
  8. Omega

    Omega Light Load Member

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    Ok, it seems we have to get the income up to $2,500 gross a week for it to be worth it. Some weeks he has made this much, some he made $4,500, even $5,000 in one week once when he hauled a boat to CA. But then he would end up in some dead cheap freight area and the next week would be $1,500, got stuck in Arizona for a week making as low as $1,000. Now he avoids certain states.

    Do you think you can make $2,500 per week doing OTR with the cost of fuel the way it is now?
     
  9. jdrentzjr

    jdrentzjr Road Train Member

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    Below is my year end financial statement. Subtract $10k for taxes, and another $10k for maintainance escrow.

    Hope this will help others considering becoming an o/o.


    Re: Financial Statements ? Via Web

    John, following you will find your December 2007 monthly financial statement.
    The December numbers represent your final financial statement for 2007. They
    should agree with Schedule C of your federal income tax return although there
    may be some adjustment as additional income tax information is received.
    In looking at the December financials, you are showing a Net Profit of $74,087 for
    the year-to-date period. This comes out to $0.491 cents per mile and is based
    on 151,027 paid miles. High productivity and strong cost control led to an
    excellent year. Congratulations!

    You averaged 12,586 paid miles per month this year compared with 12,006
    monthly miles you averaged last year. You were out on the road 333 days
    through the end of December 2007 (91% in service) and averaged 454 miles for
    each day you were out.

    Your maintenance expense for 2007 was $4,153 or $0.028 cpm and your tractor
    supplies expense was $1,724 or $0.011 cpm. Together your variable tractor
    expenses end the year a little less than expectations.

    Fuel costs averaged $0.428 cpm less fuel surcharge reimbursements of $0.272.
    This results in a net fuel cost of $0.156 which is an excellent fuel cost.

    Your tractor depreciation expense for 2007 was $18,558 or $0.123 cpm. 2007
    was the second year of a four year depreciation schedule for your tractor.
    Also, if one is both owner and driver there are no real advantages to being incorporated or a LLC. A sole-propritorship will do the job and it is way less hassel.
     
  10. Omega

    Omega Light Load Member

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    So do you suggest S-Corp? Because if so I have to hurry and meet the March 15 deadline. They allow you to turn C into S and it will count for the whole year 2008 as long as I do it before March 15. What will an accountant charge to set up our S corp the way you mentioned? Because I have been using some Miami lawyer who is somewhat vague.

    (Some truckers are saying LLC is best)

    He uses Internet Truck Stop load board and contacts a broker to get a load or posts his truck empty onto the load board and brokers call him. Only once was he able to bypass the broker and work directly with the shipper. He was told freight will pick up the end of March. Lets hope that's why profit is not high enough right now, maybe that's the problem. Plus he has been through some terrible weather, snow storms, black ice, closed roads. :biggrin_2552:
     
  11. Working Class Patriot

    Working Class Patriot Road Train Member

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    That depends on the factors FSC and rates.....more likely $2,100 is more realistic right now.

    Oil has hit highs (% wise) we have seen since just before the Oil Embargo. One thing about stocks and commodities is that when there is a huge Bull run, traders will start pulling money off the table before the stock or commodity crashes. Especially the institutions (mutual fund managers).

    I think based on the history, oil futures won't be able to sustain the highs because of pull-backs and the demand will drop. That being said, I don't believe we'll see $2 a gallon diesel (unless we allow drilling of the SoCal coast, ANWR, in other words become self-sufficient) but I think it will stabilize in the $3 range.

    Sorry for the long explanation, I dabble in the stock market.
     
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