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The Pitfalls of Budgeting For Your Trucking Business

Todays Date: December 10, 2018

One topic I would like to bring up to owner operators is the topic of budgeting. In the last few years, with the economic climate being how has been, expenses have been at the top of everyone’s mind. Although you may be able to analyze and plan your budget all day in the trucking business, you may find that it does not do you a bit of good. The best case scenario is always the most fun to plan for, but you need to focus on planning for the worst case scenario. Items such as the distance you will drive and the rates you are paid can be very predictable. However, the most vital aspect that becomes very difficult to predict is the amount of maintenance your truck may require.

You may have heard that a truck that has hundreds of thousands of miles on it runs like a Swiss watch, and you might have a brand new truck that never seems to get out of the shop. Sometimes it’s just the luck of the draw. Just like any machine that runs every day, eventually it WILL break down. When it does break down, it’s usually tough to get through the shop and get back on the road for less than $1000. This is why you need to be prepared for these instances. If you’re ready, these repairs are just a business setback instead of a major business killer.

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 on the engine. This warranty coverage is responsible for covering a significant number of the major components that would result in what we refer to as a “catastrophic failure.” In general, fixes 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 still need to be prepared for the other, not-as-significant items that could threaten to put your company out of business if you are not prepared.

A general rule to to abide by is to set aside a minimum of five cents per mile for maintenance. This, as always, will change depending on how many miles you have on your truck, how old it is, and how many miles you’re adding to the truck during the course of a given year. Five cents per mile is always a good place to start though. If you do not put anything aside and hope to only change the oil over the next year, you probably will not be successful very long as an owner operator.

This 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 cushion when times to begin to become bad. When the need for truck repairs come around (and they always will come around) 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 stay successful in this business.

Are you searching for today’s best truck leasing provider? At Lone Mountain Truck Leasing we offer semi truck financing, allowing you to become an owner operator quickly and easily.

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