How much profit makes it worth it?

[IotaInsanity]

I'm running a transportation business we started in July. So far we've had 33k pass through our hands and only kept 4k of it. So roughy 1k a month on 2 trucks.

At what point does a business become worth it? What metric do you use. I'm spending 2k a week to bring in 2300. Is that worth it?

 

[Sythix]

Wow... that is a horrible ROI.

You need to take a larger cut. Only 4k from 33K? You are doing something wrong.

 

[Checkmate]

Did you factor in expenses also on that? gas, wear and tear etc.

 

[IotaInsanity]

Wow... that is a horrible ROI.

You need to take a larger cut. Only 4k from 33K? You are doing something wrong.

Hence me asking the question. Is it really a horrible ROI with only 1 hour of work per week.

Did you factor in expenses also on that? gas, wear and tear etc.

Lol. Why do you think it's only $300 from $2300?

Sorry. Didn't mean to be smartass. Out of 33k 29k is expenses 4K is profit.

 

[BassTrackerBoats]

Your numbers for that industry are way off... what country are you in and what kind of freight are you moving?

 

[IotaInsanity]

I'm in the USA. It's not big rigs it's box trucks. Moving pallets for Amazon.

 

[kittykut]

Amazon are huge cheapskates

 

[IotaInsanity]

Amazon are huge cheapskates

True words my friend.

 

[BassTrackerBoats]

I'm in the USA. It's not big rigs it's box trucks. Moving pallets for Amazon.

24' trucks with liftgates or are you delivering packages to homes/businesses?

 

[IotaInsanity]

1 truck is 24ft 1 is 26ft.
1 has a lift gate 1 has a ramp.

98% is to post offices and are dock height. We might do 1 or 2 business/home deliveries a month when someone orders a pallet. The pallets are 3ft by 2ft.

 

[PremiumAds]

As long as you're making a profit it all depends on how much you think your time is worth it
if you're spending 1 million to make 1.5 million and you think your time was worth it, then even if ROI is not good its worth it to you
Some people might spend 1 cent to make $100 but work 50 hours for that, while you might spend 30 mins to make the same amount even if your expenses are very high.
Do not care about money passing through your hands, as long as its enough to cover expenses, focus on the profits and ask yourself if you're happy with them.

 

[Peter Ngo]

4k/33k which is 12%ROI is actually pretty good for this type of business, have you taken your own working hours into account?

 

[BassTrackerBoats]

1 truck is 24ft 1 is 26ft.
1 has a lift gate 1 has a ramp.

98% is to post offices and are dock height. We might do 1 or 2 business/home deliveries a month when someone orders a pallet. The pallets are 3ft by 2ft.

I'll get with you tomorrow as it is close to 9 PM here... I was in that industry for a while and actually managed some terminals in the process.

The numbers are not adding up from what I can see but perhaps there is something I am missing and there are other ways to add to your revenue while servicing your current client.

 

[IotaInsanity]

As long as you're making a profit it all depends on how much you think your time is worth it
if you're spending 1 million to make 1.5 million and you think your time was worth it, then even if ROI is not good its worth it to you
Some people might spend 1 cent to make $100 but work 50 hours for that, while you might spend 30 mins to make the same amount even if your expenses are very high.
Do not care about money passing through your hands, as long as its enough to cover expenses, focus on the profits and ask yourself if you're happy with them.

It sounds like you are saying it is worth it. So it's different for every person then. I have a full time job making 6 figures a year and am trying to start a side business and I'm trying to decide if I should keep with this or move on.

4k/33k which is 12%ROI is actually pretty good for this type of business, have you taken your own working hours into account?

I agree. It's not bad. But losing a penny and finding a nickel is a 400% return but only 4 cents. Numbers matter too not just the ROi. Is $300 a week good or should I move on?

 

[Peter Ngo]

It sounds like you are saying it is worth it. So it's different for every person then. I have a full time job making 6 figures a year and am trying to start a side business and I'm trying to decide if I should keep with this or move on.



I agree. It's not bad. But losing a penny and finding a nickel is a 400% return but only 4 cents. Numbers matter too not just the ROi. Is $300 a week good or should I move on?

Well I think it depends on the scalability, if the maximum you can make is only 300$ per week from this business then just move on. But i think transportation is a very big and profitable industry, so more info would be good.

I think it would be worth it if you earn at least 1k per week after tax, which is avg wage here in Sydney, but different places have a different expectation of income from a business so just giving you some perspectives here.

 

[IotaInsanity]

It scales decently. But it's a 5k upfront investment to make $150 a week. So you looking at 7 months to break even. It scales I guess as much as you want. 5 trucks would make 1k a week on about $11k revenue.

 

[dzigi]

Can't you squeeze any more value from your trucks? Put some ads on them or whatever.

 

[zinxpxbl]

OP, your local/community college probably has a practical entrepreneur class or somesuch, you might even get it for free. These are not ad hoc, off-the-cuff measurements, gross margin, return on capital, basic concepts for any business owner/manager. Not somethint that could or should be sniped off a two paragraph online blurb.

 

[IotaInsanity]

I'll get with you tomorrow as it is close to 9 PM here... I was in that industry for a while and actually managed some terminals in the process.

The numbers are not adding up from what I can see but perhaps there is something I am missing and there are other ways to add to your revenue while servicing your current client.

I look forward to hearing from you. Hopefully your experience in the area can benefit me.

Can't you squeeze any more value from your trucks? Put some ads on them or whatever.

Eh, maybe. But I dont know if I'm willing to do that.

OP, your local/community college probably has a practical entrepreneur class or somesuch, you might even get it for free. These are not ad hoc, off-the-cuff measurements, gross margin, return on capital, basic concepts for any business owner/manager. Not somethint that could or should be sniped off a two paragraph online blurb.

I have all of the exact numbers, but not very many people here would be interested int hat I wouldn't think. I was looking for rough ideas and feedback. Between a full time job and 2 kids, I'm pretty occupied.

 

[zinxpxbl]

Yes, well, without going into detail the correct aproach is to review domain statistics. Like here : https://csimarket.com/Industry/industry_Profitability_Ratios.php?ind=1101

Basically 4-5% net margin (annualized) is industry average.