So you want to "own " your own company

No, but I have been told many times it was one azzhat looking at another.

 

I'm sorry, but I don't buy the $120,000 profit unless he is running an ungodly number of miles in a year or there's something you're not telling us about how he runs. But, if he is making $1.70 a mile (gross, not profit), here's how his numbers would have to work:

8mpg (at best) at 4.00/g = 50cpm
Repairs/tires minimum = 20cpm
Plates/Insurance/Permits = 10cpm

That's 90cpm left before we start getting into his truck and trailer. Let's assume he has his truck and trailer paid off and is milking money that way. That's 133,333 miles a year or 2,564 miles a week, every week for the whole year.

For 7mpg, he'd be running 144,000+ to hit that magical $120,000 total.


And somewhere in there, he takes care of his own upkeep, and is not paying for the equipment.


So, he's saying he'll work longer for less. Good for him. But, I guess you never said he was the brightest trucker out there.

 

What is it with all these guys who get a settlement for $x,xxx.xx and that entire amount is profit?

 

It must be the "new" trucker math. I still use the old fashiioned bookkeeping where the net profit is what is left after everything has been paid.

 

Yup, like:

Gross Income - Fixed costs = X
X - Variable (fuel) costs = Net Income

 

If you are paid $200,000, that is not what you make. That is what you gross. What you make is what is left after equipment payments, fuel, maintenance, overhead, licensing, taxes, etc., In other words, you add up everything that you have spent on your truck and traveling, deduct that from your gross revenue and that is your "net" or what you actually make. It may only be $10,000 or could be more than $50,000 or you could even have a net operating loss, depending on how well you manage your costs. Unless an owner operator is in a specialized area of this business he will not likely "make" or "net" over $100,000/year, especially if he is running for $1.70/mile. Fuel alone can take $0.80/mile at today's prices. That only leaves $0.90/mile to pay equipment payments, maintenance, etc., And don't forget to pay the driver, even if it is you. It would probably help most drivers or owner operators to take an accounting class at their local college. Having cash flow doesn't necessarily mean that you are making a profit. You can have cash flow and go broke from not controlling your expenses or trying to run at a rate where there is not enough profit to survive.

 

2 mistakes O/O make.

First, they are planning for repairs and maintenance and set that money aside. Are figuring taxes on what the are making after deducting maintenance "reserves" and get hit with a large tax bill. They are doing things right but don't understand until it is spent it is taxable.

The other is very familiar. They figure the settlement as income. Forget that they should be saving for tires 2-years from now or a tow bill or what ever.

 

Completely doable.

Monthly Miles and Paid 8000 14000
Fuel Service Charge 3600

Total Monthly Gross 17600

Fuel Expense, 3.95 per gal
at 7mpg 4514

Sub-net 13086

Maintenance Account
0.07 per mile 560
Workman's Comp 175
Tractor Property Insurance 500
Bobtail Insurance 25
Tax escrow 750
Highway use tax 75

Total Expenses 2085

Monthly Net 11001

 

Where is driver pay in those figures? If you were driving for a company you would get paid, so you should count comparable driver pay to yourself, then you are getting close to what the truck is actually making.

Plus, the figure stated originally was 1.70 per mile. There was no mention of an added fuel charge, leading to believe 1.70 was total compensation per mile.

 

Yeah, most people talk about pay-per-mile as total compensation. When you work with brokers, for instance, there is no talk of FSC, it's just a flat rate pay for that load that day.