With scorching temperatures here in California and elsewhere around the country, the last thing on most people’s minds is the snowy season.  As far from your current mindset as the cold months are, it should be one of the most important things you think of around this time of year.  With the weather being great for running freight and most of us seeing steady freight levels within our lanes, thinking of the rougher times ahead will only help in our ability to continue running successfully. 
Certain things are a given with these warmer months such as checking tires for pressure and temperature changes more often and keeping an eye on the operating temperatures of your trucks operating systems a little more closely.  Amongst these things to maintain and watch, one of them should be your cash flow.  While it is easy to get carried away with spending when the cash is coming in more steadily, special care must be taken to insure that your business can continue to run when the lanes “dry up”.  My own personal philosophy has always been to create a buffer during the warm months that will be something to draft from, should I need to do so
on weeks where my settlements are not where I would like them to be. 
Being that I operate the majority of my business transactions with cash and not credit, I often like to have either a build up fund in my main business account by the time the “Black Friday” rush is over, or have a separate business savings account with a pre-determined set amount that I can leech from until the April thaw arrives.  Having a few low interest credit cards can help for unexpected expenses, but should not be used as a substitute to a good cash buffer.  A good rule of thumb that I try to abide by is not to make purchases if the money is not there to do so!  If you get into the credit card habit, interest can be a difficult thing to dig out from under.  A good practice, varying based on your own personal budget, is to set aside a certain percentage of your net business income into a separate account to “store up nuts” for the winter.  Keep those credit card balances down, not only to keep your credit score looking nice, but also to be
available in case of a major repair that could easily drain your buffer instantly. 
When I started out, there was no one that really helped me to realize that certain things were unpredictable like certain maintenance issues and that many other things can be planned for.  When buying my first truck I researched and used my past experience as a company driver for many years to aid in my decision as to when would be the best time to start into business as an owner-operator for myself.  I knew freight trends always saw an increase usually starting in April and lasting on through into November, which is why I started running my first truck during April of that year.  I have been using this system of building a reserve ever since then and have been able to weather not only the storms of slow winter freight, but also the uncertainty of the most recent economic
recession.  This past winter for me was the slowest winter I had seen in my entire trucking career, with my Black Friday freight quota being half that of the previous year.  Thanks to thinking ahead during the summer months and proper planning, my business continues to be successful and run without a hitch.  I hope this blog article will reach out and be a wake up call to any of you that have not started doing something similar to this, so that you too can weather the storms and live to haul another day!

Comments (4)

Jimmy Nevarez

Jimmy Nevarez is the Owner/President of Angus Transportation, Inc., based in Chino, California.  Jimmy pulls a 53' dry van hauling general dry freight for his own small fleet, operating on its own authority throughout all of Southern California and Southern Nevada.

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That philosophy has helped us out so many times! Having a cushion is also a stress reliever. I find it very difficult to dip into my reserves when we need to and I have to remind myself that is why we have them. Nicely done Jimmy!

July 12, 2013 13:31:01 PM

I couldn't agree more Jimmy. I try to increase my "carry over" amount in my business account each year with respect to the previous year. If I can continue to increase that amount then things are going great and it puts me in a very good place for the new year.

July 12, 2013 8:49:47 AM

A good cushion makes for a softer landing? When we went though the low freight rates of the last decade that cushion helped me through it.

July 12, 2013 6:38:51 AM

A good cushion makes for a softer landing? When we went though the low freight rates of the last decade that cushion helped me through it.

July 12, 2013 6:38:48 AM