daniel@procarpet
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- Joined
- Sep 7, 2008
- Messages
- 3,797
This thread is for owner ops or wanna be small time mulit truck businesses.
Charging higher prices will increase your NET. That is a fact. A good owner op should be netting close to 70 percent. The more you gross the lower your net will go down with or without employees. If you use part time help that number will go down. With full time help it goes down even further.
Let's say you have a helper that you pay 15 percent for jobs you are on and 20 percent for jobs done solo by the tech. That averages out to around 17 percent. Now lets say the tech averages 500 dollars per week in salary or you do 3k per week as an average or just under 150k per year. That means you are doing 12k per month in sales.
We will assume you are keeping 60 percent becasue to do that volume you are going to need to spend at least 10 percent on advertising and marketing. In reality you are only going to keep 55 percent, but we will say 60 percent. You have to pay your help 17 percent of the gross or 12,000 x .17 = 2040 or 2000 to keep things simple. Your net on 12k per month at 43 percent which is 60 percent minus your help's pay is 43 percent which comes out to 5160 dollars.
Now lets say you do 2000 dollars less per month as a one person show. Now you are doing 10k per month, but you keep 60 percent. If you are good, charge more, and get a decent amount of referrals your net will be closer to 65 percent. So 60 percent of 10k is 6k dollars. You just made almost 850 dollars more than with a helper and higher gross.
If you average 200 per job, that means you have to do 10 jobs per month more to make less money. Wait that is wrong. You will have increased fuel usage, chems (that is dirt cheap), wear and tear, advertising and marketing costs so really now you are doing 12-13 jobs extra per month to again make less money.
Ok so let's say you really want to hustle and do 200k. You are going to need help. You will also need to spend money on advertising and marketing. Your help averages 17 percent. You keep 40-45 percent depending on how much advertisng you do, but we will say 43 percent again. That is 86k net on 200k gross.
In the one man show scenario you grossed 120k. Remember your job average is 200 dollars. How can you do 200k with a 200 dollar job average? You are going to need to run a second truck some and be efficient. You need to average a thousand dollars per day 200 days out of the year. You are not going to keep 43 percent if you run the second truck much. Now you are really closer to 75-80k per year net.
The difference between 200k and 120k with a 200 dollar job average is 400 jobs.
If you gross 120k per year, keep 60 percent, you just netted 72k dollars.
Is it worth doing 400 extra jobs per year to make 5k-10k dollars more?
By the way I made a 35 on the ACT math section, did three semesters of college calculus (I forgot most of what I learned unfortunately), and can compare cost analysis.
If you want to get rich, you need to loose all ideas of building a large company. You will get murdered unless you figure out a way to cash the equity out. That is very risky becasue you may only get 20 percent of what you feel your company is really worth. Then again you may be able to sell your company. I wouldn't base my retirement on that though.
You need to work hard, live meager, invest, and rely on repeats.
If you want to make more (250k real money per year), you better have other sources of income, find a new profession, or be prepared to run 10 trucks.
Charging higher prices will increase your NET. That is a fact. A good owner op should be netting close to 70 percent. The more you gross the lower your net will go down with or without employees. If you use part time help that number will go down. With full time help it goes down even further.
Let's say you have a helper that you pay 15 percent for jobs you are on and 20 percent for jobs done solo by the tech. That averages out to around 17 percent. Now lets say the tech averages 500 dollars per week in salary or you do 3k per week as an average or just under 150k per year. That means you are doing 12k per month in sales.
We will assume you are keeping 60 percent becasue to do that volume you are going to need to spend at least 10 percent on advertising and marketing. In reality you are only going to keep 55 percent, but we will say 60 percent. You have to pay your help 17 percent of the gross or 12,000 x .17 = 2040 or 2000 to keep things simple. Your net on 12k per month at 43 percent which is 60 percent minus your help's pay is 43 percent which comes out to 5160 dollars.
Now lets say you do 2000 dollars less per month as a one person show. Now you are doing 10k per month, but you keep 60 percent. If you are good, charge more, and get a decent amount of referrals your net will be closer to 65 percent. So 60 percent of 10k is 6k dollars. You just made almost 850 dollars more than with a helper and higher gross.
If you average 200 per job, that means you have to do 10 jobs per month more to make less money. Wait that is wrong. You will have increased fuel usage, chems (that is dirt cheap), wear and tear, advertising and marketing costs so really now you are doing 12-13 jobs extra per month to again make less money.
Ok so let's say you really want to hustle and do 200k. You are going to need help. You will also need to spend money on advertising and marketing. Your help averages 17 percent. You keep 40-45 percent depending on how much advertisng you do, but we will say 43 percent again. That is 86k net on 200k gross.
In the one man show scenario you grossed 120k. Remember your job average is 200 dollars. How can you do 200k with a 200 dollar job average? You are going to need to run a second truck some and be efficient. You need to average a thousand dollars per day 200 days out of the year. You are not going to keep 43 percent if you run the second truck much. Now you are really closer to 75-80k per year net.
The difference between 200k and 120k with a 200 dollar job average is 400 jobs.
If you gross 120k per year, keep 60 percent, you just netted 72k dollars.
Is it worth doing 400 extra jobs per year to make 5k-10k dollars more?
By the way I made a 35 on the ACT math section, did three semesters of college calculus (I forgot most of what I learned unfortunately), and can compare cost analysis.
If you want to get rich, you need to loose all ideas of building a large company. You will get murdered unless you figure out a way to cash the equity out. That is very risky becasue you may only get 20 percent of what you feel your company is really worth. Then again you may be able to sell your company. I wouldn't base my retirement on that though.
You need to work hard, live meager, invest, and rely on repeats.
If you want to make more (250k real money per year), you better have other sources of income, find a new profession, or be prepared to run 10 trucks.
