Include selling, travel and administration. This is pre-tax return and does not value invested capital.
Try this with your own numbersFormula and worked example
Owner return = (revenue − costs excluding owner pay) / owner hours
| Input | Example |
|---|---|
| Period revenue | 15,000 |
| All costs excluding owner pay | 10,000 |
| Owner delivery and admin hours | 180 |
| Calculated result | 27.7778 per owner hour |
Choose reliable inputs
Compare route time, vehicle cost, delivery density and collection timing. For this local delivery calculation, use completed route logs, fuel receipts and delivery records and a consistent definition of one delivery.
- Driver hours: include the portion belonging to this delivery or reporting period, and record where the value came from.
- Vehicle cost: include the portion belonging to this delivery or reporting period, and record where the value came from.
- Route density: include the portion belonging to this delivery or reporting period, and record where the value came from.
Use the same currency for every money input. Do not mix weekly costs with monthly revenue, or count the same expense in both an itemised cost and allocated overhead.
Should I include unpaid admin hours?
Include selling, travel and administration. This is pre-tax return and does not value invested capital.
What if this input changes?
If period revenue rises by 10%, this example changes by 8.3333 per owner hour. This shows the effect of one change; it does not predict what will happen.
Open the calculator, save your baseline, then change the input supported by the least reliable estimate in your records. Compare both scenarios before committing to a price or capacity promise.