In today’s market, trucking feels like a risky business. Shippers expect to cut their expenses by lowballing their shipping rates. Brokers aren’t helping. We have to keep a constant eye on our trucking financial reports. At some point, you can’t fix your trucking company. Smart trucking fleet managers see the problems and address them right away before the crisis hits.
Start-Up Debt
There are a few – very few – start a trucking business without debt. Most truckers have to finance their first truck with a loan or perhaps a lease-purchase agreement. Covering the start-up costs like insurance and bonds often takes a helping hand from friends, family or a bank.
Most businesses start the same way. The investments to get started have to be paid back. Monthly living expenses for a family and home, plus fuel maintenance – trucking is a great business, but not a cheap one. A trucker has to get enough to cover all those plus those expenses that will be reimbursed – eventually.
But at some point, that debt has to be paid back. At some point, we need to make enough to live on. And at some point, we need to make a profit.
When is that point?
Or worse, when are you past that point?
Don’t Wait Till It’s Too Late To Fix Your Trucking Company
When is it too late? When have you gone too far for your trucking company to ever come back?
We don’t have the answer to that. Only you know when there’s no hope. You and maybe your significant other and your banker.
But like the signs along the road to tell us the upcoming exits and what we might find there, there are signs to warn us of what might be coming.
Trucker Stats™
Revenue Per Mile or Profit Per Mile
When truckers get paid per mile, we need to know exactly what we’re making per mile. We could foolishly assume that’s our profit.
Revenue per mile is how much we get paid per mile. But that’s not the whole financial story of a load. Expenses per load and recurring expenses have to be paid. The real number that any trucker or fleet manager needs to know is the profit per mile.
If your profit per mile isn’t high enough, then you’re losing money on a load.
How To Fix Your Trucking Company Bottom Line
Just like losing weight means cutting calories, fixing your bottom line is often a matter of cutting the expenses.
- Shopping around to reduce insurance costs – we all see those ads at the toll booths for a certain insurance company.
- Business personel such as hiring a bookkeeper or a mechanic – it might be better to get a better accounting program that handles the invoices or make a contract with a local technician to handle regular maintenance tasks.
- Truck maintenance done right may be expensive, not nearly as much as the on-the-road breakdown will cost in emergency repair costs.
- Develop relationships with brokers to get the loads that don’t make it to the load boards.
For owner-operators, living expenses such as pricy coffees or fast food can be cut by getting a coffee pot and buying food to prepare in the cab.
Maybe it’s a different route for a dispatch? Taking US 30 with no tolls may be better than I-80.
Or perhaps we need to rethink our entire strategy.
Instead of long-distance, cross-country trips, maybe switching to handling regional loads, or just in-state loads. Or selling off excess equipment and moving into a niche that’s more profitable.
The whole point is not just to find the holes where the money goes, but to find ways to keep the money in your pocket.
The Hard Truth
Honestly? You’re not going to hear much you haven’t already heard about how to fix your truck company. The knowledge is out there. It just may hurt to have to make those changes. No one likes to change. It can feel like we failed. Or what we did wasn’t good enough.
It’s not about you. It’s about the challenges of running a trucking business in this economy.
Don’t wait till you’re at a crisis point.
Fix Your Trucking Company With TruckingOffice PRO
If you see that your company is heading for trouble, you can make some adjustments now to turn things around.
If you’ve waited to long and you’re worrying at night about how you’ll make it to the end of the month, much less the end of the year, then you need to take a long hard look at your trucking business with the help of some business professionals. SCORE is an option. They offer free business consulting for small business owners. You might find a freelancer to hire, or maybe a fellow trucker can give you good advice.
Whoever you ask to help you, you have to have the information to figure out the best solutions. That’s what TruckingOffice PRO provides. Our Trucker Stats™ take the deep dive into your trucking business data. You can find the answers you need at the tip of your fingers with TruckingOffice PRO trucking software.
Instead of waiting for the hammer to fall, try TruckingOffice PRO for free! We’ve got a free trial where you can enter your data from the past and then use Trucker Stats™ to find the way out and on the road to a successful trucking company.
“Guts and Bourbon” Kevin MacLeod (incompetech.com)
Licensed under Creative Commons: By Attribution 4.0 License
http://creativecommons.org/licenses/by/4.0/
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