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Is it Enough? Setting Your Goals For Hourly Earnings as a Delivery Contractor:

We talked about the who of your delivery business. We talked about the why of your delivery business. And then we got into the where. In yesterday's post, we talked about the first part of the “How Much” – identifying your earnings opportunities in your market.

And now the important question: Is it enough?

Is the potential enough to meet your goals? Do you even HAVE any goals. Well, let's take care of that today, okay?

Identifying What You Really Need to Earn

We’ll dig into setting a target, understanding what you need to have when it’s all said and done, and whether you actually make what you think you make in the gig economy. Some of it may surprise you. Some of it can be pretty sobering.

What we do today will give you a basis that you can build your operations on. You can use this to determine what kind of deliveries you should take, and how you spend your time. We’ll walk through a method that will help you develop a time based goal that you can use in so many other aspects of running your courier business.

Getting the right perspective on evaluating your earnings

How many times have I seen someone ask in a forum “Is $150 in earnings good for a day?” There’s so much left out of that question. How much time did it take. How far did you drive? That could be a fantastic day and it could be horrible. There’s so much more to the picture than just an amount.

That’s the thing I want to get across today. Whether it’s for a particular delivery, or for a day of earnings or a week, don’t get caught up in a single amount. Too many people make the mistake of focusing only on earning so much per day or so much per week. Setting goals is crucial but you want to make it time based, because when it’s time based you can better evaluate your progress.

Make your goals hourly, not daily or weekly.

I recommend setting an hourly goal. It is far more objective. $20 per hour in 8 hours tells me so much better about how you did than $160 for the day. What if it took 14 hours to get that $160? See what I mean?

You can also break down the hourly goal to a per minute goal. I preach a 40 cent rule, where I’m striving for 40 cents a minute, or $24 per hour. I can use that to evaluate whether a delivery is worth taking, or to make other decisions. We’ll dive into that more in a couple days

Using the hourly job mindset as a start for creating your goal.

We are self employed. We need an entrepreneurial mindset. But there’s no avoiding the fact that a lot of us still will try to compare how we are doing here to a more tradional job with a W2. That’s okay. That mindset can actually help us get a start on creating our hourly goal.

Ask yourself questions like the following: What should a job like this pay if I’m doing this as an hourly employee? How does this kind of work compare to work associated with certain hourly rates? If I were to take an hourly or salaried job, what do I want to be earning per hour?

Do you see why I use the job comparison? That’s our normal frame of reference. We think in terms of a $15 per hour job but also in terms of all that goes with a traditional job. We need to start with that to help build to what comparable earnings would be as an independent contractor.

Understand the things that you don't get as an independent contractor that a job does provide.

As independent contractors, we don’t get the perks we’d get as employees. Those include overtime pay, lower tax rates, paid time off for holidays, vacation and sick days, benefits such as insurance and retirement. Not every job will have every benefit, but we get the picture here a bit.

Start adding things on to the pay that you decided you want to receive. You have to make a little less than 10% more to cover additional payroll taxes as a self employed person. If you’re looking about 20 days off per year from vacations, holidays, sick days, that’s another 8%. What about your expenses? Your car costs you a whole lot more than just gas, every mile drives your long term costs up. Say that’s about 25% more to cover that cost (and I think 25% is very conservative). We haven’t even TOUCHED benefits and we’re already at 43%. So let’s round it to 50%

You have to earn 50% more as an independent contractor to have essentially earned the same thing as you would as an employee. If we are comparing to a $15 per hour job, that means we have to be earning $22.50 to be equivalent.

Let that sink in a bit.

With that in mind, can you truly make what you really need?

That’s kind of sobering, isn’t it? Now obviously you can run some more detailed numbers to get a more specific picture. However, that can be pretty hard to swallow that we’re earning THAT much less at this than it first looks like on paper.

Bottom line, you have to make a lot more than you realized to get the same earning power. Now, think about your analysis with yesterday’s episode on what the revenue opportunities are in your market.

Is it possible to make enough money? Be real honest with yourself. How much opportunity is there, and is that enough of a living or income to make it worth this kind of work?

What do we do with this difference between perceived earnings and real earning power?

There are two ways we can go with this question. One is that you can see the earnings, once you properly compare them to the kind of work you’re used to, just don’t add up. It’s not enough, it’s not sustainable. I think there are places where that’s very true. That’s okay to recognize that. With any business opportunity, sometimes the most profitable thing you can do is realize the opportunity isn’t that profitable.

The other response can be to challenge yourself. Don’t think too small. Now that you have a target, you can start applying that target to everything you do. This is something I call the 40 cent rule, and I use it to determine whether to take an order or make other decisions. You would be amazed how often you can hit a goal simply by going after it.

Set Your Earnings Goal High Enough

I know there are adaptations to my 40 cent rule that start at 30 cents. The $24 per hour just seems a bit too much, so start with 30 cents a minute, or $18 per hour. I get that, and I actually started at 30 cents myself. But here’s the problem with that: Using the math we did earlier, $18 per hour is the equivalent of a $12/hour job. And that brings us back to…  is that enough? The $24 per hour goal isn’t as high as it seems once you take everything into consideration.

Think big, Courier Nation! You’ve got this. Now you have a goal – soon we’ll start digging into ideas on how to go after that goal! And here’s the deal folks: You are far far far more likely to achieve a certain amount if you have it as your goal than if you don’t. That wraps up five of our six episodes on the business plan. Tomorrow, we wrap up the business plan part of the 31 Day Courier MBA by looking at creating an exit strategy.

Could this help someone else? Please share it.

Ron Walter of

About the Author

Ron Walter made the move from business manager at a non-profit to full time gig economy delivery in 2018 to take advantage of the flexibility of self-employment. He applied his thirty years experience managing and owning small businesses to treat his independent contractor role as the business it is.

Realizing his experience could help other drivers, he founded to encourage delivery drivers to be the boss of their own gig economy business.

Ron has been quoted in several national outlets including Business Insider, the New York Times, CNN and Market Watch.

You can read more about Ron's story,, background, and why he believes making the switch from a career as a business manager to delivering as an independent contractor was the best decision he could have made.

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