Q / am starting in road haulage as an owner driver
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and, naturally l want a proper return for my efforts. have your Cost Tables and note that you include 20 per cent for return on capital employed. Do you think this is adequate? Do not retail traders work on a 33%3 per cent profit margin?
ATo answer your second question first, yes retail traders often work on a 331/2 per cent mark up for the goods which they sell and it might be thought that road hauliers, too, should seek a higher return on capital than 20 per cent. In assessing a reasonable profit margin, a haulier should compute what return he would be able to obtain by investing the same amount of money and avoiding all of the effort and much of the risk involved in transporting freight. Then he should realise that he would require much more than this for that effort and risk. A return of 20 per cent before taxation is considered the minimum for which he should aim.