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 about getting into truck driving, or you are already a driver and are considering becoming an owner operator then you need to think through how much income you can generate as an owner operator.
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 financial projection template for truck drivers.
Calculating Potential Revenue as a Truck Driver
So let’s assume that you own your own truck and you pick up contract work. According to this helpful article by TruckDriverSalary.com an owner operator can expect about $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 template. Go to www.projectionhub.com and select the Trucking Business Model. Once you sign up, you will see that the Trucking Business Model has been added:
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.
Calculating Projected Expenses as a Truck Driver
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 helpful article by RTS Financial 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:
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 it Best to Own Your Own Truck or Drive for a Company?
So when I used all of these assumptions above it turns out that you are projected to make an annual profit of just over $52,000 as an owner operator truck driver.
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:
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 cash can an owner operator truck driver bring home each year?
Based on this example, we are projecting that you can bring home $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, maybe that extra $5,000 isn’t worth the hassle, maybe it is. That 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.
Of course, let me know if you have any questions at email@example.com