Are You Making Profit?
9 DRIVER'S DIGEST T here's a lot more that goes into the equation than just the cost of diesel and driver's pay. Too often, the small fleet owner forgets about or ignores overhead and fixed expenses involved in keeping a small fleet running. And the smaller the fleet, the higher the per-mile rate has to be to break even because the expenses are spread over fewer units . ARE YOU TRACKING ALL OF YOUR EXPENSES? This includes your truck payments and insurance of course, but also include tolls, permits, repairs, maintenance, office expenses such as telephone and fax, Fed Ex shipping, taxes, and of course diesel. Once you've figured out your expenses for each month, com-pare it to how much you're bringing in each month. Take your average pay per mile and multiply it by your monthly mileage. Compare this to your monthly expenses are you over or under? Whether you need to make changes in order to make a profit, or you want to increase your monthly profit, here are some things you can do that can positively affect your monthly profit. REDUCE DEADHEAD Three choices to make here: Make sure the last load puts you somewhere you can get paid to get out of, raise your price to cover this expense, or just don't take the job. While it may not feel right to turn down business, it may be better to wait for a more profitable load. CUT EXPENSES Use your refrigerator in your truck if you have one. This will help you stop buying so many fast food meals that aren't good for you anyway. Keep track of your on the road meal expenses for a month to see where your money is really going. Reduce expenses by eliminating overnight shipping of Bills of Lading. Use certified mail whenever possible. This alone can save you hundreds each month. GET PAID MORE Do not haul a load for a broker based solely on the fact that the broker will offer you a fuel advance or a quick pay. Brokers understand that carriers willing to pay them a fee for a fuel advance or quicker payment are more desperate for the load and will accept a low per-mile rate. When you consider the low per-mile rates AND the cost of your quick pay, your net revenue may fall short of covering the total costs you calculated above. It's much better to establish relationships with shippers in order to haul their freight directly and only rely on brokers for back hauls to reduce deadhead. And, you don't always have to take the first bid that's offered. Getting a fair price is critical to staying in business even in a bad economy. Remember, this is YOUR business. Nobody is going to watch over it if you don't. FINANCE Are You Making A Profi t ? Do you know how much money your trucking business is making?