What does it Cost to Run Your Trucking Company

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What does it Cost to Run Your Trucking Company
I love trucking, but let's be honest I am in
this business to make money. The only thing I
like better than making money is keeping it.
There are two factors that are in my control and
that could destroy my business as an
owner-operator my health, and my ability to
cover my expenses. (I am very health-conscious
but I'll save that story for another time.) This
blog post is about the real costs of running a
trucking business as an owner-operator, based on
my personal experience over seven years. Your
costs won't be the same as mine, but it's
important to keep track of every dollar you
spend. I'm not in
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the business of giving financial advice, so if
you want to apply some of these ideas to your own
business, please talk to an accountant or another
trusted advisor. There are two kinds of costs
that you need to control in trucking fixed costs
and variable costs. Fixed Costs Are Predictable.
Some Can Be Pre-Paid. Fixed costs are periodic
expenses that remain unchanged from month to
month. The upside about fixed cost is that you
can predict this number as much as a there in
advance. Fixed costs are sometimes called
"overhead," and I don't like it hanging over my
head. So, my goal is to pay off as much of that
fixed cost as I can, as early as I can, at the
beginning of the year. The downside of a fixed
cost is that you must pay this expense whether
you work or not. Examples of fixed costs include
lease payments and insurance payments on your
equipment, annual license and registration fees,
software, computers, cell phones, internet
service, truck parking near my home, and whatever
else you need to run your business. I track every
expense, no matter how small. If you maintain an
office, or you have employees who are on salary,
employee compensation, rent, and utilities would
also be counted as fixed costs. Variable Costs
Change with Activity Level, but You Can
Economize. A variable cost is a cost that changes
in relation to the level of activity in your
business. If I don't drive my truck, almost all
my variable costs disappear. Variable costs
include fuel, maintenance, washouts, scale fees,
and parking on the road. This is the easiest
place to cut costs. For example, you can drive 55
MPH, reduce out-of-route miles, use an APU at
night, or install aerodynamic gear on your
trailer to help save fuel, which is one of your
biggest variable costs. AVAAL partners with DAT
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