10 Budgeting Best Practices of Successful Trucking Businesses
Owning a trucking business can be challenging. So much so in fact, that only 15% of newly formed trucking companies make it to their second year of operation, according to Avondale Partners. But don’t let this concern you, there are simple ways to ensure you’re running a successful trucking company.
Budgeting is one of, if not the most important step to managing a successful business. This is also a great way to keep track of your expenses. Expenses are the costs of running the company, such as fuel, insurance, and maintenance. Simply put, when you subtract your expenses from your revenue, you will get your income, which is also your profit. Once you begin tracking expenses as part of your routine, try incorporating a few more practices from this list.
- Create a Reasonable BudgetStart by tracking your expenses. After you have two months’ worth of information, you can see a better record of your spending habits and get a clearer picture of how you need to recalculate your monthly budget.
- Plan for Short-Term and Long-Term ExpensesOf course, you’re constantly thinking about the ever-present costs such as fuel and payroll, but what about the long-term costs of maintaining a truck? It can be easy to forget about emergencies, like a cracked windshield or a flat tire, but saving a little extra money for a rainy day can really give you peace of mind.
- Update Your Budget DailyThis one can be a little tough to remember, but the more you update your budget, the more accurate it will be. Make sure to keep a log of your daily expenses. It may not seem like much, but after a week you’ll notice small costs that seem infrequent, are actually regular expenses that quickly add up.
- Budget by MonthIn trucking, collecting from your customers is not a weekly or bi-weekly event. It can be challenging to budget load payment to load payment. Creating a budget for the entire month makes finances a lot easier to manage and makes your net income more reliable.
- Take inflation into accountPrices change constantly, planning for price variances in fuel, freight rates, and even higher insurance premiums will save a lot of stress in the long-run.
- Allow FlexibilityCreate an extra cushion for expenses. Try not to have such a tight budget that it doesn’t consider life’s curve balls.
- Utilizing ResourcesThere are countless apps and websites dedicated to helping business owners run their business. Find what works for you and utilize the resources at your fingertips. Apex’s Account Management Portal (AMP) can provide clients with access to reports and summaries that can help with budgeting.
- Take Advantage of Fuel DiscountsWith the Apex Fuel Card, clients can save an average of 33* cents per gallon at any one of our nearly 1,000 in-network locations. Also, clients enjoy zero transaction fees at those in-network locations on fuel purchases.*Average savings of 33/gallon is based on actual In-Network TCS client transactions for all of 2019.
- Work with a Variety of BrokersDoing business with only one or two brokers can be risky, so try to develop solid business relationships with several of them.
- Reliable Cash FlowOur last best practice is the foundation to budgeting. With any business, it is important to have reliable cash flow. When you have reliable cash flow, there is steady and constant income that you can regularly put back into your business making budgeting that much easier. With Apex, you can check the credit of a broker, upload your invoices, and have your cash the same day! You will no longer have to wait 30 to 90 days for payment.
If you found this list of best practices helpful but you’re looking for even more information about how to run your trucking company successfully, look at our FREE whitepaper, “The Business of Trucking”, it will give you detailed instructions about how to overcome the five most common reasons trucking companies go out of business.
Do you need steady cash flow to help you budget for your trucking company? Apex can get you paid the same or next day! Let us show you the Apex difference. Visit our website or call us at 855-369-2739.