How much can an INTELLIGENT owner-operator make?

Billerd said, "A wise person once told me... "When it comes to business, figure out what you can make and cut that number in half. Then figure out what it is going to cost you and double it. Subtract those two numbers and if you can live on what's left than go for it!""

Even though that's good advise...it's infeasible me thinks. Let me explain using the above analogy...

If an O/O makes $240,000.00 gross for the year, then we half it = $120,000.00. Then with all of the O/O expenses (or at least most) for the year = at least $150,000.00. Then we double that, and we have $300,000.00 in expenses! That makes us at a -$60,000.00 per year, thus making being an O/O impossible. I think that analogy needs some help.

Now, I'm not trying to be smart, or contrary. Actually I'm about to make the transition to O/O status myself and have been crunching numbers for a couple months now. At an average of $2/mile, at 120,000 mi/yr (which is what I'm looking at too, just like your example). My expenses will be approximately $169,000.00 per year, thus leaving $71,000.00 a year income, minus all taxes (Medicare, Social Security, and minimal self employment taxes) will leave approximately $57,000.00 true net income (or $4750.00 a month).

I hope that makes sense, and may help.

 

"Build it and they will come" ...lol ...wait for it....wait for it...w. a. i t f o r. i t....
All the "ney Sayers" are on their way...

 

Avoiding LTL and buying new equipment seem like unintelligent choices to me.

 

Problem with saving $150000 for a new truck, those will be after tax dollars(profit) There is no way to avoid taxes on money saved for new truck or put in maint account. Big savings after you buy the new truck.
Talk to a tax professional and get a good plan so deprecation and interest works for you.

If you lease to LS or similar your insurance big cost will be comp on your equipment, they pay liability and cargo.

Don't buy a truck until you get approved by a carrier, just because you have a truck doesn't mean you can get a lease with a good company.

Forget miles per year, work for the dollars and don't worry about the miles per year. I run 60 to 75K per year, make a good living and have a life outside trucking.

Don't expect to start at the top, but if you are "pretty intelligent" you can get up to speed pretty fast. Don't burn any bridges you never know what a agent may come up with next, just say no if you don't want their load and move on, don't book a load then cancel. Same with shippers, you don't know their relationship with the agent, many good customers and agents have long and close ties. Act professional and work out problems like a adult.


There is good money to be made, but to get it you need to work with the right people, all companies aren't equal.

good luck

 

That's an excellent point, Old Man, and i was thinking about that this AM myself. An 8% finance charge vs. a XX% tax bill. Of course there will be depreciation after the capital investment is made but that would be years later.

 

a sad reality of the life of a working man

whether you work over 40hrs per week, or just trying to save money, uncle sam is there to kill your dreams

 

Great advice camaro68.....It's called not putting all your eggs in one basket,hopefully more well use that advice.

 

Docw, wow! Didn't think I would have to explain this but....... Here goes.

The "quote" I gave is not an exact science as you so elegantly tried to make it. Rather it is the thought that your probably always going to make less than you think you will, and because trucks tend to break down, and fuel prices fluctuate, chances are your expenses are going to be higher than you figure. So, plan accordingly. Figure the worst case scenario and if you can still survive on that, then by all means move forward.

When you do become an O/O, you will find that all your figuring may go out the window. Generally speaking you won't consistently make what you think your going to make. All it takes is one bad decision and it can take days or sometimes even weeks to recover.

120,000 miles a year is a good goal. Are you getting your own authority? Any deadhead figured into those miles? Obviously the deadhead miles greatly affect your pay per mile. Maybe you have some dedicated stuff set up though.

Reality is this. Figures on paper always look good. We are human and like to convince ourselves that everything is going to be perfect. Real world numbers tend to be quite different. Just the time it takes to put together a decent load will eat into your drive times, not to mention the guy down the street that is now hauling the load you have been trying to get for $1 per mile. $2 a mile is a great goal, but depending on your ability to stay where the good paying freight is 100% of the time, $2 might not be obtainable.

Dont even get me started on expenses..... Which always end up costing more than planned for. And then you have to send money home for the bills right? What gets let go first when the money is not there on time. Fuel? Truck payment? Don't pay rent on the house?

Sure you can factor. If your lucky they will only take 5%. Or you can wait 30 days for your money, which with mail times ends up being more like 45-60 days.

60 days of running hard and you could burn near $20,000 in fuel alone. Not including truck payments and God forbid breakdowns and other repairs, insurance, cell phone, Internet and loadboards..... All adds up.

Hopefully your expenses and revenues will all be just like you plan.... But please go into it prepared in case they aren't

I wish you the best of luck in all that you do.

 

Isn't "Intelligent Owner Operator" an oxymoron?

 

173K after fuel last year. Worst year was around 155K (after fuel). Do enlighten me BigBadBill what am I doing wrong as unintelligent O/O.
P.S . I am leased to company .Paid by miles.