February 15, 2023
The IRS publishes tax return data each year on the roughly 28,000,000 sole proprietorships in the U.S. We analyzed the 742,212 tax returns that were filed in the Truck Transportation industry to pull out some key statistics and insights to help our customers ensure that they are creating realistic financial projections for their trucking business.
We hope that this data will be helpful for you as a “reality check” for your financial projections and trucking business plan process. We hope you create a forecast for your unique situation and plan, and then use this data to make sure your projections seem reasonable based on industry averages.
Here is what we will cover in this article:
Learn How to Use this Financial Data
If you are creating projections for your startup business, or you just want to see how your existing business stacks up to industry averages, you can take your income statement and compare key ratios and percentages for your business compared to this industry average data. You may also be working on a business plan for your trucking business, and if that is the case you may find this free trucking business plan template to be helpful.
How Many Trucking Businesses in the US are Sole Proprietorships
There are approximately 750,000 trucking companies in the US organized as sole proprietorships. We specifically analyzed 742,212 companies based on the 2019 IRS tax return data.
Average Annual Revenue for Trucking Businesses
The average annual revenue for all sole proprietorship trucking companies in the U.S. was $118,345.
If that sounds low, keep in mind that this includes all trucking companies including trucking businesses that might operate on a part time basis. In this article we show how you can generate $400,000 in annual revenue with a single truck.
Average Annual Expenses for a Trucking Business
The average annual expenses for all sole proprietorship trucking companies in the U.S. was $102,072.
The raw dollar amount is less important here, the important thing to note is that all expenses for a trucking company amounted to 86% of total revenue.
Average Net Profit Margin for a Trucking Business
The average net profit margin for a trucking company was 14%.
How Much Can I Make Owning a Trucking Business?
If you are wondering how much you might be able to make by owning your own trucking business, you can get a good idea by creating a revenue projection based on the number of miles you can drive per year and the average rate you can earn per mile. That will give you total revenue, then simply multiply that by 14% (the net profit margin) to come up with a forecasted profit as the owner of the business.
Top 10 Expenses for a Trucking Business
Based on the tax returns of 742,000+ sole proprietors operating in the truck transportation industry, the following were the 10 largest business expenses as a percentage of revenue.
Average Cost to Lease a Truck for a Trucking Business
The average trucking business spent 23% of revenue on truck expenses which we assume the large portion of that cost would be the lease expense.
Average Cost of Insurance for a Trucking Business
The average trucking company spent 4% of annual revenue on insurance.
How Much to Budget for Truck Repairs
The average trucking company spent 6% of annual revenue on repairs.
Average Labor Costs for a Trucking Business
The average sole proprietor trucking business spent roughly 13% of annual revenue on labor costs. Now keep in mind that many of these sole proprietors are probably driving the truck themselves and not paying themselves a salary. So if you are not driving the truck yourself, you should expect to pay much more for labor cost. If you are driving, you will probably pay less than 13% for labor cost.
Fuel Cost for a Trucking Business
The average trucking business spent roughly 7% of annual revenue on fuel costs.
This is a highly variable cost and depends on your truck, the type of driving you will be doing, and the current fuel prices.
Typical Interest Expense for a Trucking Business
The average trucking business only spent 1% of total revenue on interest expense.
This is something to keep an eye on with your business. If you take out too large of a truck loan, your interest expense could become a significant portion of your expense budget which will cut directly into your take home pay.
Important Details about the Data
I want to point out a few key items about the data:
- You can download this data for free from the IRS website.
- The data includes 742,212 truck transportation sole proprietorships in the U.S. in 2019. This will include businesses with 1 single truck, but could also include a business with many trucks.
- This data will include businesses that operate full time, and businesses that only operate on a part time basis.
- Because of this, you should take the raw numbers for revenue, expenses and profit with a grain of salt, but the percentages can still be quite valuable when trying to forecast expenses for your business.
- This data includes businesses from all across the country, keep in mind that revenue and expenses can vary greatly based on your specific geographic location.
- We used 2019 data because we felt it was most likely to be representative of a “normal” environment for the industry. COVID-19 caused disruption to almost every business in 2020 and 2021, so we wanted to utilize “normalized” data.
If you have any questions about the data or how to utilize the data in your financial forecasting process please don’t hesitate to reach out to us!