$1 million Owner Operator

Or another math vs real life puzzle. You let owner operators lease on to you and you take 10% cut. They will self dispatch but also cover all their operational expenses, including the insurance cost. All you provide them is DOT#, factoring, safety department, IFTA filing, maybe parking.
Assuming each makes $200 000 annual revenue....50 of them will bring you 1 million as your revenue. How many more you need to profit one million?

 

I agree, I would rather start aggressively updating equipment and lowering debt. Depreciate down the income to a more manageable tax level. At a certain point though the equipment will be new, the debt will be zero, and you’ll be all out of depreciation 179 or otherwise. At that point profits will be higher then ever. What does one do then? Keep growing? What if you are happy with the size and profits?

Yes, you’ll have to keep turning equipment over but if you pay cash for the difference and never run out of warranty then if the company is significantly profitable then it eventually catches up.

 

There is a lot of cost you can reduce, insurance cash vs payment, factoring/LOC vs cash, equipment, ect

 

I wonder that as well. How do you keep "hiding from the IRS"? I don't expect to have to pay taxes for my first two years. But what about after that? This is one of the questions that caused my "accountant" to tell me they can't help me because I'm looking for a book keeper, and they're trying to get away from that.

Still need to find one too...

 

Yeah, but what if you already are doing all of those things?

 

And that’s the problem, high debt load and low cash flow. One disaster away from going under because they don’t plan ahead.

8% is my profit goal, not the operating/surplus cash goal. Two different items on the ledger, I count operating cash as an expense, not as a profit.

one thing people lack is discipline, they see opportunities to expand and jump on it. This happened a few years back and a bunch of us profited off of the downfall of those quickly made fleets demise.

 

Depends on your tax structure. If it reverts everything to you vs a c-corp.

 

Can you elaborate on the profits percentage, ledger, and cash being an expense portion? I’m trying to follow but not understanding fully on that.

I understand profit, and then profit after depreciation. What are you saying exactly?

 

LLC as S Corp.

 

Basically an extension of yourself vs a separate entity. Running a continuing business or something that goes away if you do? Cash tax base or high enough to be put on accrual tax? All makes a difference on what is spent and what for.