Sea Side Scrap Book » Avoiding The Pitfall Of Budgeting For Your Trucking Business

Avoiding The Pitfall Of Budgeting For Your Trucking Business

One topic I would like to bring up to owner operators is the topic of budgeting. In the last couple years, with the economic climate being how has been, expenses have been at the top of everyone’s mind. Although you may be able to analyze and plan your budget all day in the trucking business, you may find that it does not do you a bit of good. The best case scenario is always the most fun to plan for, but you need to focus on planning for the worst case scenario. Items such as the miles you will drive and the rates you are paid can be very predictable. However, the most vital aspect that becomes very difficult to predict is the amount of maintenance your truck may require.

Even if you have a brand new truck or a used truck with a million miles on it, the risk always is that you never know when your truck might need maintenance. Some trucks may break early on, some may break later, but it eventually will break somehow. When it does break, the visit to the shop to get your truck back in business is rarely less than $1,000. Keeping this in mind, your budget needs to factor in these types of occurrences. Once you have this factored in, these repairs just cause a temporary setback instead of completely halting your business.

On each truck in our inventory that is from the year 2005 or newer at Lone Mountain Truck Leasing, we include a one year/100,000 mile warranty for the engine. This warranty is responsible for covering a significant number of the major components that would result in what we refer to as a “catastrophic failure.” Generally, fixes like these will generally be in the range of $5,000 to $25,000. Even though these types of repairs do not happen frequently, you still need to be prepared for the other, smaller items that could threaten to put your company out of business if you are not prepared.

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A general rule of thumb to follow is to set aside at least five cents of each mile for the purpose of maintenance. This, of course, varies depending on how many miles you have on your truck, its age, and how many miles you’re putting on the truck during a given year. Five cents per mile is always a good place to start though. If you don’t set any finances aside and hope to only worry about changing the oil over the next year, you probably aren’t going to make it very long as an owner operator.

Like any business, you need to create a cushion when times are great, and you need to diligently keep track of all expenses and try to keep that cushion intact when times are bad. That way, when repairs come up (and they will come up) you will be ready for them. If you are financially prepared for these problems you will be able to quickly get back on the road and rebound quickly.

If you are interested in truck leasing, then you can benefit from semi truck financing provided by the experts. Lone Mountain Truck Leasing is your resource for becoming an owner operator.