Managing costs as an Owner Operator or Lease Purchaser is very important. Don’t just fly by the seat of your pants and drive your business into the ground. Take some steps to strategize and ensure you will stay in the black as an Owner Operator or Lease Purchaser. Truck driving is a lucrative business but if not managed properly it has the potential to bleed you dry. Paramount Freight Systems is an Owner Operator and Lease Purchaser company and wants to help you be successful with your business. Read more to learn about how to manage your costs to create a profitable business model.
Managing Fixed Costs as an Owner Operator or Lease Purchaser
Fixed costs are the expenses that have to be paid by your company which are independent of your business activity. The mortgage on your truck is a fixed cost. This could also include your insurance coverage, licenses and permits. These costs can be broken down to a daily or weekly amount so you know exactly how much you will need to make to breakeven on just your fixed costs. When your truck is sitting idle in the yard, you will still incur these fixed costs.
Managing Variable Costs as an Owner Operator or Lease Purchaser
Variable costs are the expenses that directly relate to operating your business and running the truck. Some things that are considered variable costs are fuel, tires, maintenance and meals. The more you run the truck the more variable costs your will incur. Conversely the more miles you run per load the lower your costs per mile will be.
How to Track Your Costs
First build a spreadsheet with each row being one source of expenses. You will want your rows to contain the type of cost – truck payment, trailer payment, insurance and anything else that will fall under a fixed or variable cost. Then setup the columns of your spreadsheet to track your annual costs and monthly costs this will help you plan ahead. By tracking these numbers you can also calculate your cents per mile for each source. Over time as you collect more data you will be able to track trends and plan ahead.
At Paramount Freight Systems we can help you offset some of your costs by joining one of the best fleets to drive for. We have discounts to help decrease your overall cost per mile. Some of these benefits include discounts for fuel and insurance. We know maintenance can be a very expensive part of owning your own truck so we offer discounts on parts too! When you drive with us, you thrive with us.
We hope you enjoyed some of our tips on how to better manage and plan ahead as an Owner Operator or Lease Purchaser. Paramount Freight Systems wants to make sure you own your route to success. We can help you with any questions, so feel free to contact us. Need help getting insurance or renewing permits we can help with that as well. Need to lease a truck? Stay tuned for our next article and we’ll show you how. Don’t forget to share your tips and tricks with us on our social media channels.