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How Much Does An Owner Operator Truck Driver Make | Learn If A Trucking Business Is Profitable With A Trucking Accounting Spreadsheet

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How much do trucking companies make

How Much Do Trucking Companies Make? Uncover The Average Owner
Operator Truck Driver Salary

A Truck Driver is the most common job in 29 of the 50 states in the United States according to a report released by NPR.  So if you are thinking “how much do trucking companies make?” or you are already a driver and are considering becoming an owner operator then you need to know
the average owner operator truck driver salary. This can be done easily with a trucking income
and expense excel spreadsheet.

There are differing opinions as to whether it is more profitable to drive for a company as an employee and simply drive their truck, OR is it best for you to own your own truck and work for yourself. The good news is that you can simply calculate what the best option for you will be with our truck driver owner operator spreadsheet for financial projections.

Calculating The Average Owner Operator Truck Driver
Salary

So let’s assume that you own your own truck and you pick up contract work.  According to this helpful article by TruckDriverSalary.com the average owner operator truck driver salary is expected to be $140,000 in revenue per year.  Let’s assume you drive 5 days per week, 50 weeks per year, that is 250 days of work.  So to earn $140,000 in revenue in 250 working days, you need to make $560 per day on average.  So the question at this point is, based on the work you have lined up, does $560 per day seem reasonable?

Once you know how much you should be able to make per day/week/year then it is time to start creating a financial projection with our trucking financial projections template.

On the revenue page you will be able to add your monthly expected sales.  $140,000 divided by 12 months is $11,667 per month.

Trucking Profit & Loss Spreadsheet To Calculate Expenses

Now as long as you have steady work, the revenue side of your projections should be pretty easy to estimate, but the expenses can be a lot more difficult.  There are a number of variables when it comes to expenses, I will walk you through most of the major expenses and how to estimate them below:

Variable Costs for a Trucking Business

Fuel – Your fuel cost will probably be your largest monthly expense.  To calculate your monthly expected fuel cost you should follow this equation – Number of miles driven per day  X  21 days per month driven  = Total miles driven per month.  Then take Total miles drive per month divided by the number of miles per gallon that your truck gets  X the price per gallon of gas.

So as an example, let’s say you drive 500 miles per day  X 21 days per month = 10,500 miles.  Then assume your truck gets 7 miles per gallon so 10,500 divided by 7 miles per gallon is 1,500 gallons of fuel per month at $2 per gallon = $3,000 per month in fuel cost.

Truck Maintenance –  According to this truck driver owner operator spreadsheet the average maintenance cost per mile for a semi is .14 cents.  So 10,500 x .14 = $1,470 per month.

Travel – If you are doing long haul driving and have lodging expenses, or are sleeping in your truck, RTS Financial estimates about $400 per month in lodging and meals.

Fixed Costs for a Trucking Business

There are a number of fixed costs for a trucking business as well.  You can see the expenses that I added as a default for a 1 person owner operator trucking business:

Trucking Business Expenses

I did not add any salary expense because I am assuming that you are the owner and you will simply keep all of the profits.

Is a Trucking Business Profitable?

So when I used all of these assumptions above it turns out that the average owner operator
truck driver salary is $52,000.  You can find out how to start a trucking business with one truck
here.

Profit for a Owner Operator Trucking Company

That might sound pretty good, or maybe not so good depending on your current job, but the important thing to remember is that just because your profit is $52,793, we need to think about how much cash you can actually take home.

In this example I assumed that you own a truck and a trailer and that you also have a business loan to pay for those assets.  You can add those assets on the Assets page as seen below:

Truck Asset

The truck is going to depreciate which is a non cash expense, but you will also have loan payments and the principal portion of your loan payment is not an expense, so when it is all said and done the question is:

How Much Does An Owner Operator Truck Driver Make In
Cash Annually?

Based on this example, we are projecting that your average owner operator truck driver salary is $55,163 per year.

So the question for you is, can you do better as an employee of a trucking company?  Maybe you can take home $50,000 as an employee, but you don’t have to worry about getting any work lined up or any of the other stressful issues that come with owning a business. Whether the $50,000 is worth the effort or not is up to you but now you have the information you need to make a sound decision before you seek to become an owner operator truck driver.

Contact us at support@projectionhub.com for further questions or pick an excel financial
projection template from our collection and get started on your own project.

Creating Financial Projection Scenarios in ProjectionHub

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We are really excited to release this new feature for our users.  Now you can create multiple scenarios of your financial projections within the same account.  So for example if you want to see how your projections change if:

  1. You get the bank loan
  2. You get the investment
  3. You hire a new employee
  4. You sign the big contract
  5. You reduce cost of goods sold with a new supplier
  6. Etc, etc.

You can now easily create multiple scenarios for your business and save yourself hours of work.

How to Create Financial Projection Scenarios in ProjectionHub

Click your Company Name on the top left

Creating a New Financial Projection Scenario

Then Click “Create New Scenario”

You can create up to 5 scenarios for your business.

Once you click to create a new scenario you will see a message in the top right that says “Creating Scenario”

Edit your Financial Projection Scenarios

You can toggle back and forth between scenarios and edit various scenarios by clicking on your company name and then clicking on the scenario you want to work on.

Let us know if you have any questions at support@projectionhub.com

Download all Financial Projection Reports at Once

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We released a nice update this week that will make life a bit easier for our users.  You can now download all of your financial projection reports at once with one click.  Here are the steps to download your reports:

Go to the Dashboard page

ProjectionHub Dashboard Menu

Click the “Download all Reports Button”

Download Financial Projection Reports

You will receive an email

PDF files will be included in a zipped folder

ProjectionHub Adds Graphs and Tables

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We are very excited to announce that we have released a much anticipated update to ProjectionHub – Graphs, Tables and Charts!

All users will now be able to see a few standard charts and graphs.  Those charts and graphs will also be available to any user that your “Share your Projections” with.  (Learn how to invite a user to view your projections)

Financial Projection Graphs and Charts

Make sure to login to your account and check out the new updates.

Financial Projection Basics #3: What Should Financial Projections Include?

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cropped-ProjectionHub-Icon-Avatar.pngThis is the 3rd blog post in my series of posts on financial forecasting modeling basics.  You can check out the first couple of posts below:

  1. What are financial projections?
  2. Why create financial projections?

In this post I want to discuss what should be included in financial projections.

What to Include in Financial Projections?

Financial projections should include the following:

  1. 3 years of Projections –  Generally, an investor or lender will ask for 3 years of financial projections as a standard.
  2. Projected Income Statement – Your projections should include an Income Statement, also known as, a profit and loss forecast.  You can see examples of the 3 standard projected financial statements here. 
  3. Projected Cash Flow Statement – A cash flow statement will help you determine whether you will run out of cash.  It is possible, even common, to be profitable but to run out of cash.  For example, your customers might pay you well, but they might wait to pay for 90 days, that is a recipe for trouble if you haven’t planned well.  Forecasting your cash flow will help with this process.
  4. Projected Balance Sheet – A banker is going to be interested in your projected balance sheet.  They will look to make sure that your balance sheet ratios show that you can afford to repay the loan and that you have sufficient collateral to cover the loan.
  5. Key Assumptions – It is important that your financial projections are built on a set of assumptions that can be easily understood and changed if needed.  I always recommend that you add a narrative document with your projections that just outlines a list of all of your assumptions and what those assumptions are based on.  I wrote a blog post that outlines how to build realistic projections with bottom up based assumptions.

Here is an excerpt from that blog post that gives an example of what your assumptions might look like:

“A bottom up approach for a coffee shop might look like this:

  • Our coffee shop is at the intersection of the 2 busiest streets in town with daily traffic of approximately 15,000 vehicles.
  • We know that only 15% of people purchase coffee at coffee shops
  • All of them already purchase from a different coffee shop, so we will have to convert them as customers
  • Because most customers are loyal to their coffee shop we estimate we might be able to convert 10% of the total number of coffee drinkers
  • We will start by running local tv and radio commercials as well as placing c0upons in the local newspaper.
  • We think these advertising efforts will convince (15,000 vehicles x 15% coffee drinkers x 10% potential customers) 225 customers to try our coffee during the first week.
  • Because we are a local store with high quality coffee at a convenient location we believe we can convert 50% of those customers into returning customers.
  • So our first month sales we estimate at (225 customers x 50% x $3 x 30 days) = $10,000 in sales month 1.”

That’s it!  These are the key ingredients in a solid set of financial projections.  Our software tool – ProjectionHub – can help you create these required documents to keep your banker, investor, or partner happy. Give ProjectionHub a try for free.

Financial Projection Basics #2: Why Create Financial Projections?

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ProjectionHub-Icon-AvatarThis is the 2nd blog post in my series of posts about Financial Projection Basics.  If you want to start from the beginning, make sure to check out “What are Financial Projections.”

Today I want to get to the “Why” behind financial projections.  I often here questions or statements like this:

  • Aren’t financial projections just a blind guess for a startup?  What is the point of wasting our time?
  • Financial projections are just created to give the bank a reason to deny my loan request.
  • I don’t need anything more complicated than back of the napkin math for my projections
  • I am not an Excel expert, so I don’t know how to create projections easily so I won’t waste my time.

I think there are 3 primary reasons that you should create financial projections whether you are a brand new startup or an established small business owner:

3 Reasons Why You Should Build Financial Projections

1. Proof that your business could work

Before you sink your retirement account and your valuable time into starting a new business, don’t you think it would be worth spending a couple hours to build some basic financial projections that will help prove whether your business can be profitable?

A great exercise is to work through is a Breakeven Analysis.  I have written extensively about this topic and provided a free breakeven analysis template here.

Basically what you do is determine a sales price for your product or service, determine how much it will cost you to produce 1 unit of that product or how much it will cost to provide 1 hour of that service, and then take your sales price minus your cost to produce to come up with your Gross Profit per unit.

Then add up all of your monthly overhead like:

  • Advertising
  • Rent
  • Salaries
  • Utilities
  • etc

Take your total overhead divided by your gross profit per unit and you will come up with the number of units or billable hours you need to sell each month to breakeven.

Now this is really important!

You need to do a gut check here.  Let’s say that you sell used cars in a town of 1,000 people and your breakeven analysis shows that you need to sell 50 cars per month to breakeven.  That is 600 per year.  Do you think you will be able to consistently sell 50 used cars per month in a town of 1,000 people?

So before you drain your retirement, just go through some basic projections to determine whether this business has a chance of success.

2. Projections are an important exercise that all big businesses go through

Have you ever invested in a publicly traded company?  Have you noticed that the stock can skyrocket or tank based on the company beating or missing their earnings projections by a couple of pennies?  Just look up any publicly traded company and you will find SEC filings with forward looking projections.  These companies create projections not simply because investors want them, but because it helps them plan internally.

Projections can help you determine when to hire that new staff member, when to add a new piece of equipment, or how much you need to increase prices to reach profitability.

If you want to grow into a big business someday, it isn’t a bad idea to emulate what they do, like creating projections.

3. Investors, lenders, and partners will want to see your projections

Are you looking to raise investment?  Will you need a loan someday?  Are you thinking about bringing on a business partner?  Based on our current ProjectionHub users we know that sharing financial projections with investors, lenders, accountants, and business partners is one of our most popular features.  It is important to keep a set of up to date financial projections ready for when an investor, lender or business partner asks to review your projections.  It provides a sense of confidence when I, as a lender, ask to see projections and the business has already completed their projections before I asked.  It shows me that this business owner is taking this seriously.

So those are the 3 key reasons why you should take a bit of time and create a set of financial projections.  Whether you use our tool – ProjectionHub – or simply use an Excel template, this is a process that is worthy of your time and effort, it will save you a lot of pain and headache in the future as a business owner and set you on the path to success.

Financial Projection Basics #1: What are Financial Projections?

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cropped-ProjectionHub-Icon-Avatar.pngSince we started ProjectionHub back in 2012 to help entrepreneurs create and share financial projections, more than 20,000 business owners have used ProjectionHub.  If there is one thing that has become clear to me since starting ProjectionHub it is that the vast majority of our users are great at running their business, but not financial experts.  So after 4 years I am finally getting around to writing a series of blog posts that will walk business owners through the process of creating financial projections from the very basics to the advanced.

My hope is that this series of articles can help you create your own financial projections for a lender or investor without the need to hire an expensive accountant!

Also, right from the very beginning I want to offer my personal email – adam@projectionhub.com – so that you can ask me any clarifying questions along the way.

What are Financial Projections?

So let’s start from the very beginning by answering the question, what are financial projections.

Definition: Financial Projections

Financial projections are simply a set of forward looking financial statements.  In other words, financial projections show what you think will happen in the future of your business.  Financial projections commonly contain the 3 primary financial statements:

  • Income Statement
  • Balance Sheet
  • Cash Flow Statement

You can see an example of financial projections built using ProjectionHub

If you want to get started creating your own financial projections, give ProjectionHub a try for free.

Calculating How Much you Can Make as a Consultant

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Millions and millions of people earn a living through consulting work.  When I say consulting, I am throwing anyone in the professional services industry into the same bucket, which would include:

  • Accountants
  • Architects
  • Attorneys
  • Business Advisors
  • Management Consultants
  • Engineers
  • Software Developers
  • Graphic Designers
  • Photographers
  • Videographers
  • And many more

Professional Services GraphThese trades generally come down to an hourly rate that you can bill to your customers.  So for anyone in this business or considering getting into the professional services business I think i
t is important to have an understanding of your earning capacity.  How much can you make if you are consulting on your own and how much can be made if you are building a professional services firm with multiple billable employees.

Let me walk you through this process.  Here is a Professional Services Template that can help you through this process.

Financial Projections for a 1 Person Consulting Firm

This should be pretty straightforward.  To determine your earning potential as a 1 person consulting firm you need to start by estimating your consulting revenue.  Here is what we need to know:

Average Billable Rate per Hour:  $75

Average # of Hours Billed per Week:  20 hours

Average # of Weeks Worked per Year: 48 weeks

Estimated Annual Revenue = $75 x 20 hours x 48 weeks = $72,000

With these basic assumptions we are estimating that you can generate $72,000 in consulting revenue on your own.  But now we need to estimate your expenses.

Expenses for a 1 person consulting firm

We would expect minimal expenses for a 1 person consulting firm, but there are a few expenses you should consider:

  • Accounting – $100/month
  • Advertising – $100/month
  • Insurance – $100/month
  • Internet – $50/month
  • Legal and Professional – $50/month
  • Meals and Entertainment – $200/month
  • Rent – $500/month
  • Software – $250/month
  • Supplies – $50/month
  • Telephone – $100/month
  • Travel – $250/month
  • Utilities – $50/month

Total Expenses = $1,800 per month x 12 months = $21,600

Net Income = $72,000 – $21,600 = $50,400 

Again if you want to play around with the numbers for your specific situation, you can use our Professional Services Breakeven Analysis Template.

Creating Financial Projections for a Multi-Person Consulting Firm

Now what if you have multiple employees instead of just your own billable hours?  This certainly changes things.

The key think you will notice is that you need to estimate the % of time that employees who are able to bill work to clients will actually be doing billable work.  For example, a graphic designer working on client projects might only be able to bill 55% of their 40 hour week on average, but you still need to pay them for their full week.

Let me know if you have any questions at all, we are here to help. Breakeven Analysis – Professional Services Breakeven Analysis – Professional Services Firm

Startup Brewery – Break Even Analysis Template

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image for brewery break even blogAccording to the Brewers Association the Craft Beer industry continues to grow across all regions.  Production of craft beer has nearly doubled between 2012 and 2015 as you can see in this graph below:

MidYear_BrewersAssociation

New craft breweries are opening every day across the country and it seems like this trend will continue.

So now the question is, if you are looking to launch your own craft brewery, how much beer will you need to sell in order to breakeven, and is that realistically possible?

How Much Capacity Should your Brewery Start with?

This is the first important question that will determine how much it takes to breakeven.  There is a great article by MicroBrewr that answers this very question.  Once you determine your initial production capacity and startup costs for that capacity then we can move on to breakeven analysis.

Calculating Breakeven for a Craft Brewer

I think the best way to calculate breakeven is by determining how many barrels of beer you need to sell in order to breakeven.  So the first step is to calculate all of your costs for a barrel of beer at the size of your brewery.

Variable Costs for a Brewery

There is a helpful analysis posted on Beer Advocate that explains some of the costs and economics for a brewery with a 5,000 barrel capacity.  The costs that go into each barrel are as follows:

  1. Grain – cost of grain per barrel
  2. Hops – cost of hops per barrel
  3. Yeast – cost of yeast per barrel
  4. Misc – Cleaning, Nutrients, Clarifiers, etc per barrel
  5. “Other” Costs – According to one of the writers on the Beer Advocate forum you should assume “other” costs of $40 a barrel – “I think it’s a safe bet that your ‘other’ costs for each barrel won’t be less than $20 unless you’re very fortunate and hard working, so let’s say $40/bbl at the low end.”  I think this should include your labor, utilities and other variable costs.
  6. Kegging – the cost per barrel to keg the beer
  7. Bottling – the extra cost per barrel to bottle the beer

Once you get your total cost per barrel at your given production capacity then you need to determine what you can sell a barrel for and what your fixed costs are in order to determine your breakeven. Check out our brewery cost spreadsheet template to assist you in finding all of your costs.

Fixed Costs for a Brewery

The fixed costs for a brewery would include the following expenses:

  1. Rent
  2. Salaries
  3. Accounting
  4. Internet
  5. Phone
  6. Insurance
  7. Supplies

How Much can you Charge for a Barrel of Beer

Lastly, we need to know how much you can charge for a barrel of beer.  There are 2 kegs in a barrel of beer.  Here is a price list for what a keg of beer usually sells for, so you should multiply that by 2 to get your price per barrel.

How Much can you Charge for a Keg of Beer

How Many Barrels of Beer do you Need to Sell in Order to Breakeven

Now that we have all of the pieces, we just need to put them all together to determine how many barrels of beer you need to sell in order to breakeven.

If you need a full set of financial projections including this breakeven analysis, we would love for you to check out our Brewery Template on ProjectionHub.

Share your Financial Projections with Investors, Lenders, Accountants, and Partners

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We just released a new major feature for ProjectionHub.  You can now easily share your financial projections with your business partners, accountant, investors or lenders.  This will ensure that these users always see the most up to date set of financial projections instead of worrying about version control.  Here is how it works:

Add Users that you Want to Share Projections with:

Click your company name and then click “Users”

Add Users to ProjectionHub

Share your Projections with as Many Users as you Want to

Sharing Reports

Users you Invite will get an Email Request

Invited Users will get to See Your Projected Financial Statements

Share Financial Projections with Lenders and Investors

You can Revoke your User Access at Any Time

Revoke User

So, if you haven’t already started creating your financial projections, you can do so now with a free trial here.