How to Create a Business Budget for Owner-Operators
Having a budget and following your budget can help owner-operators cut down on extra non-related business expenses. Following a budget can help keep your hard-earned money in your pocket. Whether you are a new owner-operator or a seasoned driver, learning about saving money is never too late.
Create a Household Budget
When starting your budget, you must first create a household budget. This will help you layout all your monthly income, reoccurring monthly expenses, and costs that vary each month. Write everything out that you spend money on, no matter the price. It is important to have an accurate picture of your expenses. Here are some things to consider.
Income – write out your income each month and each year. If you are married, you can include your spouse’s income.
Fixed Costs – you can list your fixed monthly expenses under “Revenue,” and the dollar amounts under “Per Month.” You will then multiply this by 12, and the total will be placed under “Per Year.”
Variable Costs are the expenses that change each month, such as gas, food, and repairs. You can look at your bank statements and receipts to get a good estimate for each month. Once you get this number, multiply this by 12 to find your yearly average.
Create a Business Budget
Once you are done with your household budget – you must consider your budget as an owner-operator. As a business owner – you are going to experience unexpected costs. Building a business budget will help you better understand how many miles you must drive to cover your monthly and yearly expenses. If you are an experienced driver, you may already have a head start in knowing how many miles you drive, hours you work, and how much you earn.
You can lay out your budget plan any way you like – but a good starting point would be to have a column for the following: Revenue (that includes actual miles, revenue miles, personal and joint income), Per Month, Per Year, and Cents per Mile. You can also create other sections with your Fixed Costs and Variable Costs totals. These sections should have different types of fixed and variable costs for monthly/yearly and the costs per mile.
When making your business budget – consider the following:
Miles: includes the actual miles and how many you will expect to travel for the month/year. Revenue miles and the number of miles you will get paid for driving.
Fixed Costs: includes your truck payment, license and permit fees, insurance, tax services, etc.
Variable Costs: this includes fuel, oil, maintenance, tire replacement, legal services – any expense that varies.
You will also need to consider any slow months during the year that you will not be driving as much because of weather conditions or any other reason. You must have enough income to cover those months so you do not end up in the negative.
Owner-Operator Budget Tips
As an owner-operator and running your own trucking business, it is important to create a budget to determine where your money is going each month. Below are some good tips on how to create and keep a budget.
Reduced Spending Budget
Many don’t think about creating a budget to help manage to spend. But not many professional drivers have one. If you don’t create and stick to a budget – your money often gets spent on unnecessary things such as eating out frequently. To budget – you must think about money earned subtracted by money spent. If you are unsure where your money is going – you are already behind. First, look at your weekly and monthly spending to create a reduced spending budget. If needed – you may have to cut costs and reduce spending. Find problem areas where you spend money that is not needed to keep more of your income. You will be surprised at how much money you can save in one month by doing this. And over time – that money adds up.
Pack Your Meals
One of the biggest money-saving tips is stopping eating out and making your own meals. Eating out all the time is a huge expense, and you can look into buying a truck cab fridge to keep food in. Packing your food doesn’t have to be difficult. Even replacing a few meals while over the road can save you quite a bit of money. Think of it like this – if you spend $10 per meal – that is $210 per week – and this adds up to $10,080 a year! Just cutting that in half will put more money back into your pocket.
Take Advantage of Truck Stops
Experienced drivers pay attention to the fuel prices and how they vary depending on the company and region. By pre-planning your route, you can find lower fuel and save money. When you stop to fuel up, fill up your water bottles instead of buying new ones. You can even use the truck stops free Wi-Fi to manage and pay your bills online or respond to emails instead of using your phone data (if you do not have unlimited). Truck drivers typically favor truckstop coffee – and cheap, you can bring a thermos and fill up, so you are not buying multiple cups of coffee. Also, take advantage of truck stops that offer showers and laundry amenities.
CDL Holder Discounts
Some businesses give reduced prices to CDL holders for two reasons – they want your business and a way to say, “thank you for your service.” Truck drivers are an important part of our country. By delivering goods and materials, our country would not survive without them. When on the road, ask hotels, restaurants, and other businesses if they offer CDL holder discounts. During your pre-planning of your route, you may search online for CDL discounts to see if you can find any coupons for your area.
Avoid Tickets
While this may sound like a no-brainer, road drivers often feel rushed to hurry and empty their trucks. Speeding and other roadside ticks can be prevented. If you receive a ticket, you will have a fine to pay, but you will also get negative points against your CDL, and insurance rates will go up. Being a little late for your delivery is better than paying an out-of-pocket ticket and an increased monthly payment or, even worse, the loss of your CDL.
Keep Up on Maintenance
A common way to save money as an owner-operator is to ensure that your truck is always running. Many new drivers learn this the hard way after having an expensive breakdown. Having a mechanic rescue you alongside the road can put a big dent in your pocketbook. Maintaining your routine maintenance is important and reduces unnecessary breakdowns and costs.
While there are many budget tips on how to reduce your spending, a good tip is to increase your revenue. You can take your business to the next level and drive with us! There is a driver shortage everywhere, and there are endless opportunities when you choose to drive with us! We are currently looking for qualified drivers! Fill out our online application if you are ready to hit the road!