$1 million Owner Operator

When you run a business that large, watch out for the employees in the office to start stealing from you. Sending out fake expense checks, etc. Security becomes an important part of the business. Large trucking companies profit 3 to 5 percent of gross receipts. And the BOZO above saying he is really rich would be richer if he just kept the dollars in investments, instead of purchasing hotels and golf courses. Many trucking companies reflect the profit margin by what it costs to make a Hundred dollars, some are 85%, some are 97%, some are at 103%. The ones at 103% are loosing 3 dollars for every 100.00 they make. Then the accounting practices come into play, some companies are constantly loosing money, but they keep going...

 

Well you posted a picture of a salvage yard and then a memes of a guy who did nothing without his family's money and pedigree, light years from 'solo'. Not sure how either applies.

 

If you think 10-15 mil gross will net 1 mil you're in for a rude awakening. Unless you're going to rip off everyone. You have so much cash tied up constantly

 

There is an awful lot of truth to this.

My back office expense, starting with payroll and benefits is well over a million a year for each location.

In general, 10-12% is the norm outside this industry but in a small fleet 8% is the average.

Last year I had <4% because I carried most of my drivers without the work, this year it is >9% and expect to see 10% for the first time in a while but I expect it to take a serious hit if we go into a recession/depression by the end of 3q 2021.

people think that they can make millions, they just don’t get that there is a high failure rate in this industry.

 

Schneider has about $4,000,000,000 in gross revenue and about $100,000,000, the other mega are about the same.

So if you figure a rosy 3% of gross, and each truck generates $225,000 gross you'll need 150 odd trucks to net $1,000,000 to yourself - assuming you don't take on any partners along the way.

 

I would not be in trucking if profit was as low as you all are saying.

One lesson I learned within a couple years of going into business is size and gross revenue mean absolutely nothing. My first contract customer was grossing more then 35 million per year. My business at the time was around 450k per year. Long story short my company profited more money then the 35m per year one did. Two years later they were bankrupt and I carried on without them.

The lesson is focus on quality over quantity. Be the best, work with the best, and you’ll make money. Grow organically and slowly.

To the OP it’s not nearly as easy as it sounds, but it’s very doable. Just don’t be one of those companies that blows up to 25 or 50 trucks within 2 yrs and is gone 1 year later. I see it all the time.

 

Dont remember the exact breakpoints but buisness growing pains are frequently # of employee based

1-2
4-5
10-12
18-20
35-40
75-80

Those are all breakpoints at which your company growth requires some restructuring just to manage the growth itself.

Ridgeline mentioned high failure rate in this industry, but its not just here, failure is the norm in starting any buisness. Typically only 10% survive their first 5 years.

Its the survivorship bias in buisness. People think things in the past were all well built, because we only see what survived until NOW, by definition, those particular artifacts were well built because they survived. Much the same with buisnesses



Midwest, you said this "Grow organically and slowly" which is fair practical and good advice.

My personal problem is that this assumes the adage that you must grow. I personally am fine with that, bit its not a model most people ought to pursue. Being a 1 truck operation leaves very little wiggle room for growth without adding another truck or driver, and most people are actually poorly suited to that.

 

The faster it grows the faster it dies. All the guys I know or know of that are anywhere close to that big have been at it 30 years or more, most are 2nd generation or now have the 2nd generation working with them.

 

That employee number layout you did I’d say is pretty darn accurate. Of course when your going through it then it’s harder to know when to make those decisions over years.

I agree and think everyone should be in their comfort zone. I wanted to be a self made millionaire. However, I don’t want to get to a size that has even remote resemblance of corporate. I strongly dislike that. However, trucking is a vehicle to get wherever someone wants to go. Literally and figuratively.

Good points. My wife and I both work at our company. But I also have 3 other people and a 4th coming on. Not counting drivers. Small and nimble, adjust on the fly. I routinely see old family run companies that could be far more profitable if they just adapted to today’s way of doing things. But, that’s the way they’ve always done it and that’s the way it’s gonna be. Then there are the new brokerages who think their “technology” is going to make them a success. We truck and broker and still use massive dry erase boards! LOL.

 

You only need 1 truck. Short haul dry van out of Central Point Oregon or Flatbed out of Connecticut.

$1 million is laundry money to those guys.