Maintaining a budget as an owner-operator is essential to running a successful trucking business. Owner-operators can start the budgeting process right by monitoring their personal and professional expenses, saving up funds for emergency repairs, and selecting the best financial tools for their needs.
With this post, let's go over some straightforward tips owner-operators can use to manage their expenses and increase their overall revenue.
Separate the Professional From the Personal
The first thing you should do when planning your budget, as an owner-operator, is separate your professional and personal expenses. Doing so will reveal how much money you need to set aside for the essentials and how much you can reinvest in your business.
Some personal expenses you should isolate right away include house payments/rent, medical costs, non-business insurance, and living costs (food, electricity, etc.).
Setting your personal finances aside should leave you with professional expenses: These likely include fuel costs, taxes, permits/certification, and, of course, expenses related to owning and maintaining a commercial vehicle—or maybe multiple vehicles.
Plan Ahead for Emergency Expenses
To remain successful in the long term, you'll want to account for unexpected costs. Truck/trailer repairs and fuel price spikes are two examples of expenses that an owner-operator needs to anticipate, despite the exact cost often being impossible to determine.
In order to address these surprise expenses, it's a good idea to set up your budget so that you're able to set aside some money each quarter. Even if you can only manage to save $25 or $50 a month when the budget is tight, you should make a habit out of contributing to your emergency fund.
Keep Track of Your Finances
Being able to easily see your finances is nearly as important as managing them effectively. As an owner-operator, you should take advantage of budgeting software that makes it easy for you to visualize your costs and earnings. It's also worth noting that you should spend some time finding the right budgeting tools. You'll want to find a balance of price, presentation, and features (like invoicing and tax management) that works for you.
Personal finance apps and budgeting software for small businesses can not only save you money but can also free you up to spend more time growing your trucking business—instead of figuring out where you're at.
For personal finance, take a look at this Forbes list of six excellent budgeting apps. For small business needs specifically, check out The Balance's review of ten mobile finance solutions.
Are you interested in an alternative to the standard trucking business model? If so, take a look at how Relaymile is reimagining trucking to provide drivers with a healthier, more consistent standard of work.
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