The Pitfalls Of Budgeting For Your Trucking Business
For truck owner operators, the topic of budgeting should be heavily thought through. As we all have experienced, the economy has caused a number of financial problems for many people, and the result has been a heightened awareness of controlling and managing expenses. You can plan and plan again in this business,however it may not always help unless you’re prepared for unexpected expenses that may come up that were not expected. The miles you run and your rates of payment may be easy to predict, but truck maintenance (and how much it can cost to take care of the fixes) cannot. Therefore, you should always be planning ahead.
You may have heard that a truck that has a million miles on it runs like a Swiss watch, and you might have a new truck that never seems to leave the shop. Sometimes it’s just the luck of the draw. However, like any machine that runs every day, eventually it WILL break. When it does break down, it’s usually difficult to get through the shop and get back on the road for less than $1000. This is why you should be prepared for these instances. If you’re ready, these repairs are just a business setback instead of a major business killer.
At Lone Mountain Truck Leasing we include a one year/100,000 mile engine warranty on all of the trucks we sell that are 2005 and newer. These warranties cover many of the major components that will result in what we call a “catastrophic failure.” Typically, these repairs are going to be in the area of $5,000-$25,000. While these failures don’t happen very often, there will be other non-catastrophic events that will potentially put your company underwater if you aren’t ready for them.
A general rule of thumb to follow is to set aside at least five cents per mile for maintenance. This, as always, will change depending on how many miles are on your truck, how old it is, and how many additional miles you’re putting on the truck during a given year. Five cents per mile is always a good place to begin though. If you do not put 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.
This current economy shows that the trucking business (similar to any other business) requires to you to frequently monitor your expenses to try to keep a financial buffer when times to begin to become bad. When the need for truck repairs come around (and they always will) you will be well prepared for them. Recovering quickly from these types of problems to get back on the road is the key point to remain successful in this business.
Are you searching for today’s best truck leasing business? Lone Mountain Truck Leasing services all types of commercial truck leasing and financing.
