New owner operator

This is what I've concluded about percentages (only for the US, may vary in Canada): 25-28% is a good number for a 1099 company driver who is not responsible for any truck expenses. 65% of revenue is a good number IF you are driving someone else's truck, and you are only responsible for fuel costs. 78% is a good number if you are responsible for fuel costs, maintenance and repairs. If you have your own authority, there is no reason for you to haul their freight for less than 95% of what they are billing, in my opinion.

Anything less, and you'll do better as a company driver.

 

One piece of advise i can give is know your costs.

Authority (prorate) not really a big deal if you are staying in Alberta. as for CANADA/USA it was less than $2000.00 if you use the right consultant. $4000.00 if you don't.

I would have a problem with a $5000.00 truck payment, it is really easy to get behind and play catch-up. happened to me in January lost a diff @$5000.00 and February was slow.

most important , I don't care if your new starting out, seasoned veteran , owner-operator, someone has to get paid to drive that truck so NEVER forget the .46 per mile, $29.00 per hour or what ever way you look at it. So many forget this or think there doing someone a favour. You must work it in to the rate, do with it what you wish but it must be there at the going rate.



I think $9000.00 clear is a little on the light side. I run at $ 10,000-14,000 clear after I take my $5000.00 wages. I run my truck 20 days month average. so be smart get the calulator out.

 

I have only been an owner operator for a few years, and can only offer this advice. I hired a lawyer, and I hired a good accountant. Both ensure that I pay my taxes, GST quarterly, and do my yearly incorporation papers.
It lets me sleep, and has so far kept my wheels turning. I wish you the best.

 

Hello Mr. Boneyard,

Im just curious, i just became Sask Pro-rated this year. Prior, I was Alberta Provincial under my Alberta company name.
(I have extra provincial incorporation for Sask/AB.)
Yet, I'm thinking I have a major lesson to learn here from you. My Pro-rate is $7000/year, for AB/SK/MB. Insurance is running me about $7000 as well.
Everyone told me that I would pay less, than AB I was paying $872 quarterly for plates, and about $9000 yearly for AB insurance.
Im hauling Super B 63,500 Crude/Bitumen. Does this sound right?

Sara

 

Prorate costs are way out of line. Although, what percentage of kms. did you claim in Saskatchewan. I ask because a lot of that cost could be sask. sales tax.

 

|Im newly prorated in Sask. I was Alberta Provincial before.

 

When you prorated, how many kms. did you estimate for Sask, and how many for Alberta.

 

From my experience, any company that pressured you to do something, will pressure you to run your tail off for cheap rates AND since you caved initially, you'll cave next time as well.

Then you will, in their eyes, be an employee until a point in time when they are seen as the employer. At that point, you will be treated as the contractor that you are and be responsible for all the stupid things they pressured you into doing.


As to why they want you to run your own authority, that's easy to answer.
Not only do they want the reduced overhead of hiring an O/O, they also don't want the responsibility of compliance. When you screw up, they just find another fool to fill your place. And they only charge 35% for this privilege.

Don't walk away, RUN.


You also said two very curious things:

"It's not just about the money..it's also about the learning"

Actually, it's all about the money. Yes you need to learn, but you need to be profitable at this or it's not worth doing.

In the future you plan to "haul crude"

The fact that you are looking forward to a diffident line of work while trying to get into this, is a MAJOR red flag. If this is worthwhile doing, why are you looking elsewhere?

You wouldn't marry a woman hoping that someday you could have her sister, would you? Why not just marry the sister to start with?