I have been doing some research into becoming an owner driver. Based on some rough figures I reckon that doing around 2500km per week with a fairly even split between running heavy and empty I would need to make £1400 a week before I earn anything for myself. Does this sound about right to you guys ?
I have tried to base it on what I think it would cost for a nearly new truck on a full R&M package, and include all insurances, and trailer hire, and also based on around 9mpg, which is about what the Scania I am currently driving is chucking out as an average (nearly 9.5mpg ).
My 2001 2543 Actros megaspace 6x2 cost me £28000 (inc interest payments) £34000. That equates to £150.64 per week.
The VED is £1200 per year, £23.08 per week.
Insurance, motor-GIT-Public & Employers liability is £5201.56 per year, thats £100.03 per week. Trailer hire is £100 per week. Yard rent is £35 per vehicle per week. Telephone line rental is £8.07 per week
Therefore my weekly standing costs for this vehicle are £386.82
With fuel currently costing 0.74 per per Ltr, your mileage equates to £554.78 per week.
A total of £941.60
This is with no R+M payments, which I was recently quoted on the Merc at £470 per month, £108.46 per week
Total £1050.06
Wages of course have to be added, whether thats your wages or an employed driver, lets say £400 per week
Total 1450.06
Remember that you have to cover tyres & other things that I have probably missed, and in my experience, 9mpg is very optimistic.
So, looking at it, your figures are about spot on. Most of us if we’re honest, rarely make more than £14-1700 per week.
as you can see from trampers reply it’s very difficult to make a single wagon pay,a couple of bits of missfortune and some unforeseen expenses and your strugling to break even but if you go two or more vehicles you need a hell of alot of work to justify the outlay and all the greave of employing someone and you’d need a big % of your work to be garaunteed so unless you,ve got an employer that wants you to go o/d and will offer you a contract it’s very difficult to get going.a pal of mine has just packed in with two wagons he had on lease for three years,he employed two drivers and did full time container work,in the three year period he didn’t make a penny of profit just purely covered the costs of the job!
bare in mind all the figures are based on fulltime work probably for fifty weeks a year,so you don’t need many bad weeks during that year to drastically alter the figures!
i’ve been selfemployed for over twenty years although not as an owner/driver and it’s very easy to kid yourself that your actually erning more than you are!
i’m not saying don’t do it but always look at the worst senario when predicting profit to get a true picture.
Following on from Tramper you do need totake into consideration everything you can ie O licence fee’s, accountants fee’s etc. etc. but I have done it and yes it’s ■■■■ hard graft but boy is it good. Go for it if you are willing to put in what you expect to get out. Not just a profit but self satisfaction as well.
You also need to build in depreciation on the truck, and possibly the same again to build a reserve to replace it in future years.
So, if you said a £30K truck is going to be worth £10K in five years time, you need to build in £4K of depreciation into your Profit and Loss Account (20 / 5).
And if you want to replace the truck in 5 yrs time (without borrowing), you need to build a reserve of £4K a year. This would be shown in the balance sheet as retained profit.
So that’s roughly £80 per week for depreciation (which is shown as an expense in the accounts, and it’s a taxable allowance)
And roughly £80 per week of profit needs to be retained to build up a fund to replace the truck (after tax).
There are other things to consider, like charging the firm rent for using a room in your house as an office, an allowance for safety and branded clothing, accounting, subsistence, (meal & night out allowance), miscellaneous equipment (ropes and ratchets, tools) and the list goes on.
according to trampers figures of £150 finance and £100 r+m,thats what you can get a new one for,which includes 2 years r+m,2 years warranty.I was given a price of 20%deposit then £1000 month on a 460 globe xl 4*2 unit.you always take a gamble of buying someone else`s problem if you buy used and too much downtime is a killer for someone just starting up.
gas-axe:
according to trampers figures of £150 finance and £100 r+m,thats what you can get a new one for,which includes 2 years r+m,2 years warranty.I was given a price of 20%deposit then £1000 month on a 460 globe xl 4*2 unit.you always take a gamble of buying someone else`s problem if you buy used and too much downtime is a killer for someone just starting up.
True, but that would be over 5 years I guess. Mines over 3. Lots more balls needed to commit to 5 years!
Dealers will often, (but not always), refuse to cut a deal, or be very wary of a new start leasing a new motor, and the 20% / £1000 per month is on a 4x2 not a 6x2.
Thanks guys. So I guess the long and short of it is, to earn a decent living at it you need to really be earning £1700-2000 a week.
Sounds like some research is required into niche markets. I know my boss earns about £2000-£2500 a week on multidrop, but that does tend to die off at christmas and easter.
Not quite correct. You seem to have added the word “DECENT”. For a decent living you’ll need considerably more than that! But as I said earlier, if we’re all honest, (Certainly in my case) its rare that you earn much more than £1700.
I have been busy working on a financial forecast and plan for the bank too.
I have come up with a minimum £1700 on similar figures but based on a 48 week year. In my experience there will always be a couple of weeks with no work and I allowed 2 weeks for MOT and Repairs and the odd day off to visit accountants and people.
Good Luck, my plan is im the making for around April
I guess that a decent living depends on your expectations, and current financial commitments, but to me it would mean seeing £450 after tax every week. That would put my financially at the same position that I am in currently, as an employee.
Again, thanks for the input.
One thing that I figure could make a huge difference to how much you actually earn, is whether you go for an older truck and efectively pay cash (or finance very little of it), or whether you buy a new truck and finance almost all of it.
Obviously the latter takes a huge chunk out of what you earn every week, whereas the former looks good on paper, but would be a disaster if the truck was unreliable.
Any suggestions on which is the better option over, say a 5 year period ?
Firstly, and I must stress that this is purely my own opinion, and there will be those who disagree, but, making your £450 per week and being in the same position as you are as an employed driver should not really be an option. Your going to have to put in some serious money, time and effort just to get this thing off the ground, and if your only going to be as well off as you are at present, without the debts and worry, is it really worth it? Secondly, as a new start up you will require as much capital as you can possilbly get your hands on. Therefore I would go for an older, cheaper unit. Personally, I started with a Foden 4350 which cost me £3000. Going this route allows you to find your feet in the business, without spending a huge lump of your now fast dwindling capital. It also makes for a much cheaper escape if you find that this o/D game really isn’t for you. Sure the reliability is a BIG factor, but your not going to look for a motor alone with no technical expertise are you?! and your not going to buy the first thing you see, right, and if, god forbid, you do make a bad decsision, bin it and repace it for a better one for another £2-3K. Once you’ve got your feet under the table, and are happy that the plan works, buy a better truck, and then another, and employ a driver. I know it sounds like pie in the sky, but its how I did it, and as was said earlier, 2 trucks are safer than 1, due to the fact that when 1 breaks down and costs you big money, and it WILL! you still have the income from the other to pay the bills. Like I said, just my opinion, but it worked for me, I still have 2 trucks and now 2 drivers, which leaves me free to do other things. Best of luck, just go carefull, theres lots of nasty people out there!
I was kind of thinking the cheap unit option would be a good place to start, like you say, at a few grand a pop, you can always buy another one.
As for earning £450 each and every week, I would be quite happy to earn more instead
I reaslistically need to earn that to make it worth my time getting out of bed in the morning. If I can’t cover my personal financial commitments, what is the point in working ?
leehellcat:
I reaslistically need to earn that to make it worth my time getting out of bed in the morning. If I can’t cover my personal financial commitments, what is the point in working ?
I don’t think “realistically” and “£450 per week” don’t go together
IMHO if you can earn that driving for someone else, stick with that job
you’ll be very lucky if you can make that as an O/D
I have had that thought many times, but the way I figured it is that if my boss can pay me that kind of money, and pay cash for new units every 5 years then he must be making money out of it, as he wastes bucket loads of money on servicing and inspecting all of our trucks twice as often as is actually required.
