Preventative maintenance It’s a tough way to make a living, but you’re determined to become a successful owner operator in the trucking business. It’s not impossible to realize success in the trucking industry, but you’ll need to strategize and plan for the bad times as well as the good.
The Trucking World is Fiercely Competitive, with a High Failure Rate. You won’t become the next Swift or Prime overnight—or maybe ever, despite your best efforts. You’ll need to figure out who your customers will be while you’re writing your business plan—and ideally before you buy your equipment. Figure out what kind of freight pays well, and develop relationships with shippers. Will they want to buy your services? You may decide you prefer to drive for someone else!
If you’re still set on owning and operating a trucking business, keep in mind that preventative maintenance and repair of your heavy duty truck(s) is essential to the survival of your business, especially in the early years of your business. Preventative maintenance and the unexpected truck repair are ongoing expenses for which you’ll need to budget.
Drive for Someone Else While You Learn the Ropes of the Trucking Industry. A trucking business is incredibly capital intensive with a low profit margin for your capital investment. That said, if your goal is to run a trucking business, get your CDL and drive for someone else for a few years to learn the ropes and bank large portions of your paychecks to save for the equipment you’ll need in your future business.
Learn all you can about the business sides of trucking. Develop your skills for planning and budgeting, not to mention managing other people if you intend to add trucks and employees someday. The day you realize your success as a trucking company might be the day you begin to draw your paycheck from dispatching others.
Start Small. A small, lean operation can be profitable and also more flexible than a huge trucking outfit since you can act quickly to rapidly changing markets. The larger the company, the more cumbersome it can be to adapt to market conditions. On the other hand, as a smaller company, you won’t be eligible for some of the perks available to larger trucking companies, such as fuel discounts.
Treat your business as a business. Put extra cash in reserves for preventative maintenance. Besides maintenance and repair, you’ll have driver pay (or your paycheck if you’re the sole driver), insurance, taxes, tolls, fuel, marketing, communications, bookkeeping…the list goes on. And if you expand, you’ll have employees and a whole new set of responsibilities that go with managing and training them.
Don’t Buy More Truck Than You Can Afford. Choose your trucks carefully: one lemon truck or poorly-maintained truck could ruin you financially. It is possible that you can make a living with a single truck, but your income will probably be more modest; that can be okay when you’re starting out. Try to curtail your spending outside of your business and put money in reserves for maintenance and repairs.
You’ll do better if you keep capital expenses down and pass on that flashy brand-new truck with lots of chrome and lights. Skip the frills and get a solid used truck and trailer for less. No need for a brand-new truck when a plain Jane used truck will do the same job for less money.
Although not every owner/operator can do it, if you can buy your truck and trailer in cash, you should. If you have a decent down payment and good credit, you should be able to buy a reliable used truck (five years old or newer is reasonable).
Avoid bank loans; if you can’t avoid a loan, pay the lowest amount in financing. Also avoid leasing your truck and trailer unless you can get a lease from a legitimate leasing company. In that case, you may actually be able to buy the truck but set it up as a lease and still own the truck in the end.
Eventually, of course, if you succeed in the trucking business, you’ll probably want to add a truck. That means another truck to maintain and repair. It means an employee will be driving the other truck. That guy or gal most likely won’t treat your truck with the TLC you treat it. It’s not his truck. It’s not her fuel. Don’t count on either caring too much about putting the pedal to the metal and abusing your truck. All the more reason to opt for modest used trucks versus the fancy, shiny, and new (not to mention good reason to run employee background checks). Some trucking companies actually place GPS units in their trucks to track driver speeds. Remember, too, when you shop for your truck that fuel economy is critical to your profitability.
Don’t Grow Your Company Too Fast. You may not be able to keep up with the market. Then, before you know it, the market may go bad, and one too many broken-down trucks could bankrupt you, damage your customer relationships, and cost you employees who won’t be happy to be stranded in a dead truck—as luck usually has it, in the middle of nowhere in the winter.
Set Aside Money for Truck Preventative Maintenance and Repair. Preventative maintenance and repair are, hands down, the most important parts of running a trucking business since they are your business; you can’t do business without dependable trucks to haul your loads.
Cash flow does not equate profitability. You must put cash back into your business every month to build up your reserves for maintenance and repair of your heavy duty truck(s) and the unforeseen. From brakes to suspensions, tires to transmissions, parts break down. Figure out how much an engine overhaul would cost, and you’ll get an idea of the importance of reserves—and the minimum cash reserves you decide you can live with.
When you develop a relationship with a trustworthy shop, your truck mechanic can give you an idea of how much life is left in the systems and parts of your truck. You can, in some respects, plan to replace parts that might not be so bad now, but in six months with regular use will need to be fixed or replaced.
Be Adaptable to Change. From government regulations to fluctuating economies, you will need to adapt if you want to survive when times get rough—or even dire, such as the economic depression of the late 2000s, the effects of which are still being felt now. The trucking businesses that stayed afloat during the very worst years (2008 and 2009) adapted. These survivors likely had low debt and cash reserves. They were probably the businesses which grew slowly and steadily. And they absolutely had good relationships with their truck mechanics, with maintenance contracts and regular preventative maintenance on their trucks/fleets.
Of course, you can’t control every variable, like hazardous conditions, slow paying customers, and fuel prices. Drivers can be reckless and cost you money. Accidents happen. Times change. Be ready for the unexpected. With a little luck, cash reserves, rock-solid determination, and a regular preventative maintenance plan, chances are greater that you’ll succeed as an owner operator in the trucking industry.
Are you an owner-operator in search of a truck mechanic you can trust for the long haul? Contact Vancouver Axle and Frame in the Fraser Valley, BC, and set up a preventative maintenance schedule for your heavy duty equipment. As an owner operator of a trucking business, you can save a great deal of money over time by setting up a maintenance contract with a reputable heavy duty truck repair shop.
Contracting for weekend service checks can be ideal for your business since you (and eventually if you expand, your drivers) will probably be on weekend leave. Vancouver Axle and Frame is conveniently open first and second shift Monday through Friday 7:30 a.m. to midnight and Saturday 7:30 a.m. to 4:00 p.m.
Evenings and weekends are good times to bring in your trucks for maintenance, inspection and repairs, so your trucks are available during the work week or soon thereafter. Contact us now to discuss your preventative maintenance!