Covering the expenses and operating costs of your business can dictate your financial flexibility as you make a living on the road. Trucking can be unpredictable; that’s why you need to make sure you have the resources necessary to keep moving. You need to have a strong financial business plan to make sure that your company can survive any unforeseen expenses.
When developing your business plan, make sure to incorporate costs in the following items. Don’t let fuel costs or late insurance payments run your business. You can stay ahead of these by working with a trustworthy factoring company to maintain consistent cash flow.
Covering costs efficiently becomes possible when you are paid at a reasonable time for the loads you run and can rely on consistent cash flow.
1. Unexpected Expenses
Variable costs and unplanned expenses can put your cash flow to the test. They can be tied to unexpected repairs of equipment, delays in the supply chain, or fluctuations in the market that are affecting your operations. Planning for these setbacks requires an emergency fund to make sure that you are able to handle whatever comes your way.
Consider working with a factoring company that doesn’t require a minimum amount of loads factored, so you can pick and choose which customers you factor and decide how much of your weekly revenue needs to be allocated for your emergency fund.
2. Fuel Expenses
In 2019 alone, 45.6 billion gallons of fuel were consumed by truckers. Fuel is a major expense that you need to allocate funds for. The right factoring company does more than provide cash flow, and it has resources to help ease the stress of fuel expenses. Taking advantage of their fuel discounts that often come from fuel cards can help save you more with every gallon. They can also provide fuel advances, so you can make sure that you have funds available to deliver your load on time.
The Capital Fuel Card comes stocked with the fuel discounts that will save carriers the money that they need to keep America moving:
- Save an average of 20¢ per gallon at discounted locations.
- Accepted at over 8,000 truck stops nationwide.
- Line of credit and prepaid options available.
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3. Business Expenses
Getting a handle on daily costs allows you to start preparing for the future. As you grow your business, you may find yourself wanting to add more trucks or drivers to your fleet. This investment comes with many associated costs for your business that you need the capital to handle.
For instance, investing in quality trucks and equipment will ensure longevity and fewer breakdowns that slow you down. Having the necessary cash flow is imperative for these types of purchases as you scale your trucking business as they come with continuous expenses.
4. Insurance Expenses
The cost of annual insurance is another factor that requires a large allocation of capital. Make sure that you are working with a company that can find the lowest insurance rate possible while still keeping you protected. You don’t want to be in a situation that you are overpaying for insurance or underpaying and not fully covered. The team at Marquee Insurance Group is a great resource to help you find the proper insurance coverages for your business.
The future of your business lies not only in your profitability, but also in your consistency. Do you have a set profit goal? How did your bottom line end up compared to what you had planned for? Do you have all the components necessary to see results? Even with a strong business plan and organized finances, you could still find yourself facing setbacks due to unforeseen expenses and inconsistent cash flow. One of the keys to a successful business plan is accounting for your financial ability to grow your net worth.
OTR Capital specializes in giving you the cash you need to operate and look ahead to the future growth. Consistent cash flow is possible when you are able to get paid on time for running your loads instead of waiting on your hard earned money. Some factoring companies might offer the singular solution of factoring, but OTR Capital is committed to finding solutions for every area of your business through strategic partnerships in insurance, tech, fuel, and beyond to curb the cost of running your business.
Courtesy of OTR Capital
The Trucker News Staff produces engaging content for not only TheTrucker.com, but also The Trucker Newspaper, which has been serving the trucking industry for more than 30 years. With a focus on drivers, the Trucker News Staff aims to provide relevant, objective content pertaining to the trucking segment of the transportation industry. The Trucker News Staff is based in Little Rock, Arkansas.
