Truckipedia Blog Category - How to Build a Budget as an Owner-Operator
Whether you are an experienced owner-operator or just getting started with a new business, budgeting can be a challenge. Transport demand can fluctuate and, thus, your revenue as a result. But building an accurate budget that ensures you will be profitable is possible. Here are some tips from our team at First Truck Centre.
Determine Your Revenue Miles
Not every mile you drive will be revenue-generating, but most should be. Figure out how many total miles you will drive, how many will provide you with revenue and what dollar-per-mile rate is acceptable to your customers. This calculation will go a long way to giving you your top-line revenue number.
Understand the Costs of a New Truck
You won’t always need to purchase new trucks, but when you do, you’ll need to know how much it costs. Expect a minimum down payment of 10-15 per cent on your purchase, followed by monthly payments. Look at your other expenses and make sure that those monthly payments will be affordable enough that you are still generating some profit.
Don’t Forget Your Incidentals
There is a lot more to owning and operating a truck than purchasing a vehicle and generating revenue from transport. When you’re budgeting, you need to remember all the incidental costs that go into your operation and prevent catastrophic failures later on. Oil changes, brake checks, new tires and parts all add up and can hamper your budget if you don’t account for them properly. As an example, it is good practice to set aside $250 a month for tires; you won’t need that money right away, but you might need new rubber in two years and those savings will come in handy.
There are several products on the market that can help protect your investment – and your budget. We recommend extended warranties for all of our customers for the extra peace of mind they can provide. Mechanical insurance is another possibility that allows you to fix your monthly costs for much of the maintenance that might need to be done to your truck.
Finally, downtime insurance is another method of protection that is worth exploring. This coverage protects you from vehicle payments in the event of catastrophic events like mechanical failure that take your primary means of revenue generation off the road.
FTC’s Total Customer Support Philosophy
When you purchase equipment with us, the minute you leave the dealership isn’t goodbye. It is your official welcome to First Truck Centre. Our commitment to Total Customer Support means we are your one-stop shop for assistance. We know you need to stay on the move to have your business succeed, so reach out to us for help.