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The next topic that I’d like to cover with all of the owner operators out there is budgeting. With the economy being as tight as it has been the last couple years, many people have become a lot more aware of their expenses. Trucking is one business where you can analyze and evaluate all day, and it might not do you any good. At the end of the day, you need to make sure you are planning to be ready for the worst case scenario, not expecting and hoping for the best case scenario. Some things, like the rates you are paid and the miles you drive are somewhat predictable. But the one variable that isextremely difficult to predict is the amount of money it is going to require to maintain your truck.
Sometimes a brand new truck will require repair. Sometimes, it may take over a million miles for a truck to finally break down. One item that does stay consistent, however, is that the semi will break at some point during its lifetime. Typically, the cost to bring the truck into the shop for any type of work and get it back in business (and making you profit) is rarely under one thousand dollars. Anticipating for these types of instances is key in business, and is a requirement to succeed. This will keep emergency work from being a business stopper, to just a minor setback.
On each truck that is from the year 2005 or newer at Lone Mountain Truck Leasing, we bundle a one year/100,000 mile warranty for the engine. This warranty coverage is responsible for covering many of the major components that would result in what we refer to as a “catastrophic failure.” Generally, repairs 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 really need to be prepared for the other, smaller items that will threaten to put your company out of business if you are not prepared.
If you are looking for a rule of thumb to follow, you can budget at least five cents of each mile for maintaining your truck. What can alter this number are a few factors: The age of the truck, the number of miles that are going on a truck in a specific year, and the number of miles that were on the truck prior to you taking ownership of it. One sign that you may not be successful as an owner operator, is not taking the time to plan for anything but oil changes.
Building up a cushion when business is good, then frequently monitoring your expenses and keeping that cushion when the times are not as good needs to be done like in any other business. Maintenance costs will come around at some point in the future, and you will need to be ready for them. The ability to quickly rebound from these types of issues by being financially prepared is very important in this business.
Are you looking for today’s leading truck leasing business? Lone Mountain Truck Leasing services all types of commercial truck leasing and financing.
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