How do I verify the expenses?
One of the most attractive aspects of a route business is how they are businesses in a box. These businesses are turnkey ready businesses ready to generate cash as long as you manage them correctly. There are not a lot of moving parts, so let’s take a look at what the national averages are:
Weekly FedEx settlements and 1099s verify revenue.
Payroll should be between 50% to 55% of the gross revenue. Most Contractors have a payroll company that produces weekly payroll reports.
Fuel accounts for 7% to 10% of your weekly revenue. This is verified either by showing on the settlements or credit card receipts.
Repairs and maintenance are typically around 4% to 7%. This depends on how old the trucks are and how kept up they have been. Be sure to hire a mechanic to inspect the vehicles before closing!!
Workman’s comp and truck insurance account for 5% of your total cost and can be quickly verified by invoices.
Other miscellaneous costs include scanner leases, uniforms, and tools – less than 4%