How I Made Over $200,000 My First Year as an Owner Operator | Episode 54
Over the past year, I have laid out the blueprint for the first year of operation of a one truck, owner operator trucking company. In this episode we talk about some of the keys to my success, some of the challenges I faced, and what the end result has been. I truly feel like there is no reason anyone can’t follow my plan and be just as successful as I was. In fact, I think most people can do better than I did.
Most owner operators won’t experience some of the same challenges I faced, like having to park the truck for 4 weeks because of my Army National Guard Duty or having no driving experience. The first time I drove a truck with more than an empty trailer was the day I picked up my first load.
What To Expect From Episode 54
The first year of any business is the hardest. I feel incredibly blessed that I was able to bring in just over $200,000 in total revenue during my first 12 months as an Owner Operator. Although revenue is important, the number that really matters is the bottom line.
We cover that and so much more during this episode of the podcast, where Craig and I review the highs and lows from the startup phase through the first year in business of Haulin Assets.
Here are some of the topics we talk about:
- The excitement of the startup phase and my total startup costs
- My successes
- Making a profit (listen in to hear how much)
- Building something that is mine and will benefit my family and not someone else
- Saving money
- My challenges
- My truck getting hit by a deer
- Dealing with shippers and receivers
- The stress of owning a business
- What I feel like are my biggest rewards so far
- Freedom
- Pride of ownership
- The understanding that I am setting myself up for financial success
Routes Traveled
You can check out where my loads took me each month from April 2019 to March 2020.
Financial Statements
There are a couple of things I want to point out on the financial statements you see below.
Other Expenses and Tax Benefits
If you go all the way to the bottom of the profit and loss statement, you will see there is a net income. Then, there is a section for Other Expenses that you don’t normally see on my monthly P&L. That is because it includes my annual depreciation expense for my truck and trailer. I usually only make that adjustment once a year, so it is only included on my annual financial statement, not my monthly one.
The cool thing about a depreciation expense is that it really is not cash out of your pocket but is purely a tax benefit. The simplified version is that because of the depreciation expense, even though I made a little over $32k, the IRS only taxes me on $17,992. This is one of the beauties of owning a business, you get a lot of tax benefits that you just don’t get as a company driver.
Retained Earnings
The retained earnings on the balance sheet is negative. That is because all my startup costs are included in that. So you can see, at the year mark, I have almost completely recouped all my startup costs.
Listen to the Full Episode
Such a great episode with invaluable contents. Lots of realistic info that’s helpful when looking at short and long term
Thanks Mike. Really glad you enjoyed it and found it helpful.
Chris thank you so much for sharing all your hard work. Its having a tremendous impact on my plans to start my own trucking business. Again God bless you!
Thanks Tony, I am glad you have found them beneficial. I really appreciate the comment, it’s been a lot of work. A big reason I am doin this is to help people out, so when a person like you finds it helpful, it makes it all worth it.
3 things come to mind here. 1. You didn’t earn 200k, your business earned 200k. You earned around 75k 2. You dont talk about the “cost” of not being home. Not being with family or friends. That sacrifice is what makes otr driving a truck profitable. Local drivers make a fraction of otr drivers. 3. It really seem like as an owner operator your cents per mile should be closer to $3.00 not $1.87 I have seen lease operator load payouts that are easily 1.75 to 2.50 after their leased on company is taking 20 to 35%. I think you… Read more »
You are correct, I grossed $200k, I was not trying to imply that is what I earned and could use to buy cookies with. Sorry if I did not make that clear enough. The rate per mile is a finicky thing. I usually do long runs, so the rate per mile is a bit lower and under normal conditions, you usually don’t see $3.00 per mile on the spot market except on shorter runs or runs to areas of the country where you’re going to get low rates getting out of them. I am sure there are probably some lease… Read more »
Where are you getting the depreciation value from and how does that factor into you rent income because all that work for 18k does not seem worth the time on the road all year. Especially if you have a home and a mortgage. Based on that bottom line it looks like it makes no sense to own and all the more sense to just be a driver. Please tell me how you came up with 18k and why you’re still doing this?
Great questions Mark. The answers are complicated and I cover all of them throughout the podcast. You really have to listen to all the episodes to get a complete answer. I will try to summarize some of the most important pieces here. The $18,000 was just the net income after I also paid myself as a driver, so the total pay was more like $18,000 + 14,212 (Adding the depreciation back in) = $32,212 of net operating income. If you add that back into what I paid myself as a driver, my total income was closer to $75,000. Keep in… Read more »
[…] our big year-in-review episode of Haulin Assets, Chris and Craig relate owning a trucking company to owning a house. When property […]
I am trying to compare your numbers to someone who was leased to a company that pays 75%. If I am thinking correctly the companies cut would be $50601.33 which is more than your 32k profit which means if you were leased to a company you would have been in the negative. Am I thinking correctly?
Hey Jeremy, it is hard to compare apples to apples with leasing verse running under someone else’s authority. It’s not as simple as you have described. For instance, usually if you are running under someone else’s authority, part or all of the insurance expense might be covered under the 25% the company keeps. You would have to back out the insurance expense on my P&L to make up for that. There might be other expenses I incurred that would be covered under the 25%, so you would have to back those out too to make a more fair comparison.
[…] jobs, routes, and the number of days spent on the road is yours to determine. Chris managed to generate over $200,000 in total revenue in his first 12 months as an owner-operator, despite minimal starting experience and a four-week […]
Where are the truck and trailer payments accounted for? It seems like additional weekly payments would really cut into the $32k of profit? please advise, thank you.
Part of the truck and trailer payments are accounted for in the interest expense. The principle portion of the payments don’t hit the profit and loss statement. That is a subject I have addressed in several episodes. The best way to show that is to show a monthly depreciation expense. One of these days I am going to build out a depreciation schedule and do that. That will show a better representation of operating profit and a true net profit.