I have owned several businesses over the years. A basic formula that I like to use when doing estimates is 1/3-Overhead or operating expenses (excluding wages), 1/3- Labor or wages, 1/3-profit. When you run for cheap rates you cannot use this formula. It won't work. If you spend 40% for fuel it skews everything else.

 

[quote="lowrange"]Let's try this, then:

9,000 mile = $9000. $9000(12) = $118,000. Now this is profit, and you can choose the best definition, including or not including drivers' pay.

You can make $118.000.00 at $1.00 a mile for running 118,000 miles. All you have to do is have someone else make your truck/trailer/insurance/taxes/etc/etc/etc/etc/etc/etc/etc/etc/etc. payments :wink:

 

[quote="rgarthman1969"]Stay on topic, the subject is profit.

Allan5oh is definitely no dummy, I'm hoping to hear a little 'splainiing.

And for everybody else, the question I have is this, considering self-employment taxes and no benefits, are you making more than you could as a company driver? Ok, if you are, you have risks, capital investment and a whole lot of work a company driver doesn't have. Are you making $20,000 more than you would as a company driver?

 

I know three drivers that are leased OO and they make less that Company Drivers. One has already broke his contract and the other two are going to ride it out. Well try that is. All three said that they wished that they would have had a lawyer look the contract before they signed. I do not know what the numbers are that they are making but they told me that they made more as company drivers. Sorry I cant offer any more info than this. BOL

 

That's plenty right there, rgarthman. I tell you what, I'm not going to limp along in my current condition. I'm going to get a better contract or I'm getting out. I can make what I need on company driver's wages. The big thing I have to avoid is one of these jobs where they're constantly pushing you to go, go, go, until some months later you absolutely hate your life and you quit your job just to see if you can get a life, again.

 

Well, that has you up at about a $3.50 - $4.00 per mile average, and paying yourself between $1.20-$1.30 per mile for wages. Sorry to say, GMAN, but I just don't see that happening. Your formula only works when fuel is cheap, which it isn't. As soon as one goes out of whack, the other two are thrown out the window. The formula is at the mercy of inflated expenses.

 

At the end of the year, I would make more as a company driver. Partly because I can get some higher-paying driver jobs, mostly because I'd be running a lot harder. But most O/O's would do better FINANCIALLY in a company position.

I posted once, a breakdown of what you'd have to pay yourself as an O/O to equate making $.50/mile as a company driver. It's nearly $.60 if the miles are identical. That's just to make up the difference in bennies and employment taxes. Tack on all your operating costs and a little something for your risk (ROI) and you see why the situation is what it is.

 

You have expenses of $2.00 per mile? Are you self-employed or incorporated? If the first, driver wages shouldn't be included in the calculation.

Revenue - expenses = your wage = profit

I don't profit $1 a mile, but I think I should be. I'll never reach $1 mile under my current pay program. I'd have to switch companies.