?Profiting As A Trucking Owner-Operator
As in any business enterprise, your success as an owner-operator depends on you and your ability to operate profitably. You must pay close attention to your expenses and your revenue while maintaining your equipment in top-notch working order. Maintaining an accurate set of books is key to your profitability. This article will address each facet of improving your ability to profit in a trucking operation.
When you take your expenses into consideration diesel fuel is probably your largest expense. You will normally burn a huge amount of diesel fuel per year. Anything you can do to lessen this expense will work greatly in your favor, especially with the high price of fuel today. Slow down to eliminate wind resistance. By driving slower you won’t burn as much fuel. Purchase tires with lower rolling resistance. Do whatever you can to make your tractor and trailer more aerodynamic. Watch your fuel mileage with an eye like Scrooge.
On the revenue side of things, watch carefully the loads you agree to haul as well as the locations to which they are destined. There are loads that pay well to go to some parts of the country, but once you are unloaded, finding a load going out of that area is hard to come up with. And you will either sit until something worthwhile comes up or deadhead out of the area. In either case you are losing money. Best bet is to take anything, even something cheap, to get you to an area of the country where another good load can be found.
Whatever you do, keep track of your revenue and your expenses. List expense categories that you want to keep track of such as fuel, repairs, maintenance, tires, meals, lodging, tolls, etc. Keep all the receipts and file them in an accordion style folder by category. That way at the end of the month it will be easy enough to total each category and record the figures in a ledger or even a notebook. Then at the end of the month prepare an income statement listing the sources and amounts of your revenue and the categories and respective amounts for the expenses. When you subtract the total expenses from the total revenue you have what’s called the “”bottom line””. Either you are in the black or in the red. Just make sure to do this each month.
Record all of the revenue as you receive it and compare the figures to the expense. I like to also keep track of the percentage of expense to revenue. In other words ‘what percentage of the total revenue is the expense for the total fuel’. By keeping these records accurately you will not only be prepared for the tax man, but will have a picture of the health of your business.