Don’t get us wrong. We believe that the best job on the planet is being an owner-operator. Being self-employed with the freedom to take the loads you want doesn’t compare with any other career we can think of. But along with that freedom are what we might all the Owner-Operator woes. The troubles that small business people face, trucker version.
Small Things Break Big Investments
Owner-operators have to make a huge investment to get started in the trucking industry.
- Fees for your own authority
- Bonds and insurance payments
- Your rig – lease or loan payments
- The tools and equipment you need
- Software and computers/smartphones.
Starting any business costs money. The investment in trucking is high. There are a lot of variables that can make truckers want to give up.
- Weather and road conditions
- The shipping crew is late or sloppy loading your trailer
- Bad info on the delivery address or location
- Rock bottom rates.
These don’t look like small things, do they? And most of those things, we have zero control over. You have to have a tarp. You have to drive through bad weather. You can bid on a load that’s offering a laughable rate, but you can’t force them to take it.
Part of the Job
Owner-operators accept all this as part of the job (although the shipping crew leaving you to sit in a dock for six hours is just wrong in every way.) But little things can really mess you up.
The check engine light comes on.
The signed BOL is messed up.
Your smartphone takes a dive into a puddle.
Just enough to ruin your day.
What does a ruined day cost you?
Little things add up. When you think about how much you need to live your life, run your trucking business, and save for the future, a lost day can cost a lot. Too many lost days in a row and you may have to leave the trucking business.
Owning your own business is great. It’s a labor of love as well as challenging your mind and your body. We want you to succeed. So allow us to make two critical suggestions.
1. Save money.
It’s a simple sentence with a lot of baggage. You know what happens when you try to save money. Your kids need something. Truck repairs can take you off the road for days. Saving money when fuel prices go up whenever you blink may be a fairy tale.
When you understand your cash flow – how and when money comes in and when you have to pay it out – there’s the place that you start with savings. There may be places where you find you can some money when you know exactly what you’re spending.
Whether you sit down with a banker to figure out how to organize your financials or if you work with a savings system like Dave Ramsay’s, putting away enough money for you to pay your bills and expenses for a month is vital to keep your trucking business rolling.
2. Save Your Rig.
Another savings account to cover emergency repairs might also save your owner-operator trucking business. Nobody expects their oil pump to blow, or a tire to blow. But having cash in a debit account so you don’t have to charge the repair.
Any day off the road that an owner-operator wants to be hauling freight is incredibly frustrating. The ruined day can compound the troubles – no income, annoying customers, breaking relationships with brokers. While we can’t predict some breakdowns, we can prepare for them financially. (And maybe keep a spare tire handy so you don’t have to buy whatever the repair truck brings you.)
Save your rig by taking care of it regularly. When you do your inspections, don’t just blow off the little repairs. Take care of them right away.
Small things add up to success, too.
Owner-Operator Success Is in the Numbers, Not Just On the Road
If you’re just getting started in trucking, the learning curve is pretty steep. Take it slow and don’t overcommit yourself to buying more than you can afford.
In the end, it’s the numbers, not the road, that’s going to make or break you. The only important number isn’t what they’re willing to pay you, but what you know you’re worth. How much it costs you to drive your rig per mile.
How do you know that number?
It’s a complicated formula.
Roughly put: take the expenses of your business, your family’s lifestyle, your fuel and food, and total those. Then divide that number by … oh please, don’t make me try to figure it out.
That’s what computers do. When you give that formula to a computer programmer, then we get trucking software that can make the difference to an owner-operator. Providing that number for your truck – not some “national average” or “industry average” – is how you make good decisions. Should you take a load for the offered price or should you counter? Is it worth deadhead miles to go get a load, even if it takes you home?
The way we calculate what a load is worth to us is complicated. Getting a load that takes you home has a lot of value. Taking a low-paying load to get someplace that you’ll have a better chance for a good-paying load makes sense. But when you know your revenue per mile and your expenses per mile, making that decision is a lot easier.
Those small numbers aren’t small things. They’re the basis of your trucking business.
So how are you going to find it?
Accounting programs do accounting well. But in all their preprogrammed reports, asking for a cost per mile is asking too much. The options are not there. And don’t even think about using it to compute miles per state. You’ll have an easier time getting the software to do cartwheels.
Get a trucking software package that will give you the numbers you need.
- cost per mile
- revenue per mile
- expenses per mile
- cost per load
- revenue per week or month
- miles per state
- IFTA quarterly taxes due
- IRP semiannual taxes due
If the trucking software you’re looking at doesn’t give you those numbers, then don’t buy it.
Get trucking software that works for your owner-operator business. But don’t pay for the package that your company doesn’t need. You don’t have a thousand trucks, so you don’t need trucking management software that manages a fleet.
We’ll suggest TruckingOffice, of course. And we’ll give you a free trial to discover how an owner-operator can know the numbers so the little things don’t kick you off the road.
You can be confident that you’re doing everything you can to build your successful owner-operator business with TruckingOffice.