Being a very upfront kind of guy, I'll be honest that “big trucks = big bucks”. In stating this, I mean that it takes a lot to operate these big pieces of machinery. With higher expenses on average than so many other industries, it is no wonder why only 15% of small start-up trucking companies ever make it to their second year of business, according to the NASTC (newauthoritytraining.com). Do not let this negative, intimidating figure fool you into believing the hype out there that, “there’s no money to be made in trucking these days". In planning for the unexpected, you are one step closer to running your business succesfully.
One major key to succeeding is identifying, planning for, and managing large expenses “smartly”; both seen and unforeseen.
Knowing exactly what your expenses are and being prepared for them can easily be the razor’s edge between boom and bust. It is all too often I run into drivers who think that their settlement deposit after direct expenses is their “true” net profit and their personal spending money. Soon enough, operating in this manner will catch up to anyone. All it takes is a blown turbo, one bad injector, or blown tire to wipe out a trucking business operating with no buffer for maintenance. If a $1000 setback could do this to an unprepared driver, imagine what a $3000 set of drive tires or $3000 quarterly tax estimate might do!
Drivers that operate without knowing exactly what their expenses are can usually plan on ending up on the negative side of a trucking statistic. Luckily, you are the first line of defense in protecting against this kind of failure. Historically, I have learned to set aside 10% in a separate buffer account to plan for these maintenance expenses, which could vary for you based on your operation. If you’re not used to doing so, at first it can seem like a large part of what you thought was your "profit". When the time comes that you actually need it though, you will be more than glad it is there to save your rear. I will leave you with an important quote that rings especially true in trucking and that I tend to try and live by, "He who fails to plan is planning to fail." (Winston Churchill).