Is anybody really making enough profit?

Hi self-employed Owner Operators. I have noticed that after you deduct the cost of fuel and expenses of running the business that you end up with only a small profit! Any body else in this boat or are we all?

Maybe this is the norm?

What's really scary is that we have a paid off tractor and trailer, no idling for heating, cooling, and power since we have solar power panels on the roof and an inverter that runs all electrical needs, a generator for back-up that sips fuel, computer, internet, fax, printer, TV all run by solar power. We also have a kitchen, refrig, stove, propane heat, bathroom, shower, so no hotel stays ever and no truck stop food. Food costs are low. This truck gets better fuel mileage than most at about 7.5 MPG. All mechanical work done by my boyfriend, so we pay for parts only.

Here's the breakdown of the business:

Flatbed hauling. He will rarely ever take cheap freight. Tries to accept no haul less than $1.65 per mile. He has gotten some as high as $2.50 a mile. Tries not to deadhead. A few times he has had to take cheap freight to get out of a bad/cheap freight area. This is with taking no time off except for DOT required restart.

Gross profit month of February: $ 9,809 (updated, I forgot to add in his latest invoice!)

Monthly expenses:
Fuel cost: -----------------------------------$3,600
Insurance cost: ------------------------------$810
Internet Truckstop: ---------------------------$70
Oil/filter change each month breaks down to:---$70
Additives and oil: -----------------------------$400
Cell phone-------------------------------------$170
Tolls--------------------------------------------$100
Factoring---------------------------------------$369 (5% of gross)
___________________________________________________
TOTAL expenses to run business----------------$5,589

Gross Profit $9,809
- Expenses $5,589
__________________
Actual profit each month = $4,220

Okay not too bad! But any one who has a tractor and trailer finance payment and also has to pay a mechanic would quickly go out of business I would think.

This doesn't include self employment tax or IFTA though.

$4,000 a month profit just might seem worth the hassle and hard life on the road. My theory is that fuel has skyrocketed and yet freight pay has not?

I am wondering if the solution is to eliminate the broker and try to go straight to the shipper or does he have to get rid of his flatbed and go for specialty freight that pays more? is this profit normal for all self employed owner operators?

 

Hi, yes it's a monthly breakdown on the oil change. He really takes good care of the truck so every 20,000 miles he spends $300 dollars on an oil change and new filter so I broke it down to $70 per month. Yes he does get the oil sampled but I don't know when, I'll ask.

I'm pretty sure he's averaging around 6,000 miles a month.

So in order for you to make enough profit, you have to exceed $2,100 a week which is $10,400 per month. So he needs to increase his gross profit to that level but how? Do you have any suggestions on how to do that? Do you ever take time off? Because that $7,000 a month gross was without taking any time off too. He's new at it too. Did your gross earnings go up as you became more experienced?

Yes he's a C Corp and I'm about to change him to LLC to make taxes easier. Are you saying that he can somehow use his corporation to file his business as a loss? From the looks of it, when I do taxes for this year, it will probably come up as a loss after all the expenses and deductions!

I'm going to get Quickbooks for sure. Right now we barely have our heads above water so I have to wait on the accountant. I guess I can do a search for a local trucking accountant, that would be good for when we can afford one. We are scrambling to refinance our house just to pay for his new transmission and tires ($6,000) but at least after we do, it will last a good 10 years/2 years.

 

It's 1600 minutes each month (needed to talk with all the brokers and includes an internet signal to his truck laptop).