My Hardest Year As AN Owner-Operator
The year of 2023, was the hardest year for me, as it was for thousands of owner-operators across the nation. It honestly almost put me out of business. There were a few times I didn’t think I was going to make it. I’m blessed to have a good team around me. When I say team, I mean an extremely supportive wife and kids, extended family, friends and a carrier that helps out the Owner-Operators that are leased onto the company. If it wasn’t for them, I would not be here, I can guarantee that. A lot of O/O went out of business because they didn’t have a strong support system. The support system is there to help you out in various ways. Some of the ways they have helped me are mentally, financially and spiritually. Trucking is a lonely career, even more when you feel like your doing all by yourself, when you have no one to call for a little bit of guidance. As an O/O, there will be times that you will feel stuck. No where to go. Who will you call? Right now, I want you to think of 3 People that you can call that will help you if you have some type of issue.
I Had To Work A Lot
In order to achieve the gross number on the PnL, I had to work so much. I was gone from home for so long. When I started, I was on a good schedule. 21 days on the road, 7 days at home. All that changed in 2023. Things got so tough I couldn’t even afford to be home. Days on the road started to get longer, and days at home were only getting shorter. If I had to guess how many days I spent on the road vs. home, I would say I spend 10 months on the road and 2 months at home. It sounds crazy how long I had to stay on the road in order to survive. None of this would even be possible to begin with if it wasn’t for my wife. She has sacrificed so much to keep the family from falling apart, and I will never take that for granted. Having to take care of a 2 young children all by herself. Raising kids is hard, even harder doing it by yourself. I Love You Honey! and thanks for everything.
My Profit and Loss statement below is what I gave my tax preparer but the numbers are skewed, but I will go over them to make them more accurate.
Also, what you will not see in the PnL are 2 other major items. Credit card payments and bank loans, those items will fall under the liabilities, in the balance sheet.
Per Diem Deduction For Owner-Operators
As an O/O you can deduct Per Diem from your income. You are leaving a lot of money on the table if your not taking advantage of the deduction. For the year of 2023, I had a Per Diem deduction $15,180. In short, per diem is a daily allowance from the company for food. It is set by the IRS. Every year it’s subject to change. The current rate for 2023 (last updated October 1, 2021) is $69 per full day and $51.75 per partial day in the US. But only 80% can be deducted, so $55.20 per full day. But there is now way I’m spending $55.2 on food on a daily basis, so shout out to the IRS for this deduction. I will make a video on Per Diem soon.
How Many Miles I Ran In 2023
For the year of 2023, I ran somewhere between 125,000 and 127,000 miles. The earliest recorded date for current miles that showed on the dashboard was February 12, 2023 at 733,616. So, I’m missing the miles that I ran in January. The number that I started the year of 2024 that showed on the dash was 848,583 miles. After I subtract those numbers I’m left with 114,967 miles (Not including January). More than likely for the month of January 2023, I ran somewhere between 10,000-12,000, therefore giving me the number of somewhere between 125,000 & 127,000 miles for the year. That’s an avg. of 10,000 miles per month for the year.
My Truck Payments
Another item that you will not see on my PnL is my truck payment. Truck payments will fall under the balance sheet, not the PnL. The balance sheet is where you record your Assets and Liabilities. A truck is an asset, therefore payments will be recorded in the balance sheet. For my 2016 Freightliner Cascadia, my current monthly payments are $1,520/month. $1,520 x 12 Months = $18,240/year. That’s how much I paid in truck payments. I am doing a Lease-Purchase from the company I’m with. It will be paid off June 2024 if everything goes well.
Fuel Savings
So like I said, The PnL is what I gave my tax preparer. So on it, it says I spent $68,934.27 on diesel. Since I have fuel cards that give me discounts, that number is not accurate. That number is the pump price, not what I paid after the discounts. I use a combination of 2 fuel cards and a credit card. RTS and Mudflap are great fuel that I use with good discounts. Very rare I’m having to use my credit card but I have. Don’t like using it don’t give me discounts but I have been in the middle of nowhere where there are no truck stops in the network of the fuel cards. With the fuel cards, I was able to save appx. $7,569.35. So around $61,364.92 is more accurate number.
More Accurate Numbers
So now, let’s get a little bit more accurate on the numbers. My current net income (Gross – Expenses) is $96,093.84. I will add my per diem deduction to my net income which comes out to $111,273.84. The reason I added it is because the only reason it’s there is for tax purposes. I didn’t actually spend $15,180. But now we are going to deduct the truck payments from the net income. Remember, truck payments are not reported in the PnL. $111,273.84 – $18,240 = $93,033.84. Now we going to add what I was able to save from the discounts from using fuel cards. $93,033.84 + $7,569.35 = $100,603.19. So that’s what I cleared for the year as an O/O, sort of. That’s if the business was debt free. Unfortunately, In order to keep the business afloat, I had to use some credit cards and borrow money from friends and family, which is not recorded in the PnL. Do you remember in the beginning I said I wouldn’t be here if wasn’t for my strong support system?
What Is My True Net Income?
So from the $100,603.19, I had to pay myself, credit cards and loans. By the end of it all, the business barely broke even, potentially even lost money. The reason it’s hard to calculate an exact net profit on the business side is because I have comingled my personal and business finances, which is a big no no for so many reason. For the year 2024, I told myself I have to do better or it will put me out of business for good. When you are constantly borrowing money to survive the trucking industry, you have failed as an O/O. There is only one reason to borrow money in my eyes, and that is to expand the business, not for stopping it from sinking.
So many O/O went under in 2023, mainly from mismanaging their money, which I’m included in it, and not knowing what they were getting themselves into. Becoming an O/O means knowing business, how money works, and that’s what 90% of new O/O lack, which is one of the reasons they fail.