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Given the current market conditions in transportation due to the recession, we know times can be challenging. One thing we know for certain is that being an individual owner-operator, or a trucking company comes with many expenses that we accept as unavoidable, but there are three ways to ensure you operate most effectively and weather the storm:
- Protect your investment
- Invest in areas with a rapid ROI
- Effectively manage your expenses
Protect Your Investment from the Recession
When it comes to managing your business, every dollar is an investment. Whether you are investing in equipment or technology, your eyes should always be focused on what’s ahead on the road—both the expected and the unforeseen. The difference between someone who enters the business and flames out in two years and the smart businessperson who is still trucking thirty years later is in operating in a smart way and protecting their investment.
What is one risk drivers are almost guaranteed to experience yet may not plan for? The answer is: citations. Professional drivers take on a significant risk by being on the road day in and day out, rain or shine, but most often the risk to their CDL—and their livelihood—isn’t in weather, traffic or road hazards. In reality, drivers often face the risk of losing their CDL, and thereby their ability to operate as a business, to preventable legal risk.
Every driver you speak to will say they are a safe and responsible driver, and yet one in four drivers will receive a citation this year. Oftentimes, a single stop can result in multiple violations. On average, one citation can cost a driver up to $2,000 in legal expenses if they choose to fight it. Add to that the lost earnings from downtime related to appearing in court and lost revenue opportunities, and that driver is now looking at closer to $10,000 for a single citation. When margins are tight, any driver in any given year could be out of business over an absolutely avoidable experience. Choosing not to fight a citation could put you out of business even sooner. What is a truly good, responsible driver to do? The answer: think ahead. Plan for the unexpected. Just as you would plan for tires or fuel, you need to plan for your legal needs as a professional driver.
TVC Pro-Driver has helped fight over a million citations on behalf of our nation’s truck drivers, with a 92% success rate at reducing or dismissing citations. Not only does this have a positive impact on a truck driver’s bottom line, but it will also allow you to focus on driving, having the comfort of knowing that TVC Pro-Driver’s network of attorneys has you covered. When you’re considering areas of your business to invest in, any investment you can make in protecting your CDL and your livelihood should be your number one priority.
Invest in Areas with a Rapid ROI
When it comes to driving, every mile counts. When the difference between you and any given load is having an operating truck, it is important to minimize downtime and ensure you have a reliable way to generate income. This is where effective vehicle maintenance is critical. You cannot afford days or even weeks of downtime, so investing in maintenance is the best way to invest in an area with a rapid return.
Being proactive and intentional about maintenance is key, but it is also important to leverage discounts and planning however you can to save costs. TVC Pro-Driver understands this is a significant area of expense for professional drivers, so as a part of every membership, TVC Pro-Driver members have access to significant discounts on parts, maintenance, tires and more to help you stay on the road as efficiently and cost-effectively as possible. The most effective business owners plan for the unexpected, especially during times of a recession. Planning to prevent downtime is one of the most effective ways to invest in an area where you will experience an immediate and guaranteed return on your investment.
Effectively Manage your Expenses during the Recession
Expenses are the one thing you are guaranteed to experience as an individual owner-operator or if you have a fleet of trucks. While we may accept that some expenses are just the unavoidable cost of doing business, savvy business owners and operators will look for creative ways to cut costs without cutting productivity. When every dollar counts, it is the frugal businessperson who makes it through tough times, and there is no time like the present to start learning from our more frugal friends in the business.
Let’s start with the top known expenses for professional drivers:
Fuel
Most in the industry would agree that fuel is the #1 guaranteed cost of doing business in transportation. However, all things are not equal in fuel consumption, and prices are variable during a recession. Experts agree that responsible and consistent driving patterns result in the most efficient fuel consumption rates, so ensuring you monitor your driving habits to most effectively manage your fuel costs is worth considering. Beyond that, consider the fuel discount programs available to you. Every day countless drivers throw away money because they don’t look into the discount programs available to them through pre-paid and credit fuel card options available in the market today. From cents on the gallon to upwards of a dollar per gallon, the savings can be significant. Do your homework and utilize the tools available to you on the market today.
Maintenance and Tires
It has long been established that maintenance and tires are one of the most significant costs an owner-operator can expect and plan on. In fact, industry experts say that as much as 16% of overall costs will go toward the maintenance of your truck. Therefore, every dollar you save with the maintenance of your truck is impactful toward your bottom line.
Thankfully, professional drivers have options available to them if they seek the right partner. For example, TVC Pro-Driver has no additional-cost partnerships with FleetPride and other major parts and service retailers across the country, enabling its members to save when and where they need it across the country.
Taxes
We have all heard the joke—the only guarantees in life are death and taxes. For professional drivers, taxes are a real and present burden, and every driver deserves a professional in their corner who speaks trucking and understands the unique aspects of owning a business on the road. Owner-operators and professional drivers should not settle for the average tax preparer’s advice. There are unique opportunities and aspects of living life on the road that can be used to your advantage when it comes to taxes, so find a professional who understands trucking. For example, members of TVC Pro-Driver have discounted access to Trucker CFO—specialized accountants who live and breathe trucking. Working with a tax professional who understands trucking could save you thousands over the year, and in times like now when every dollar counts, risking your livelihood with any ordinary tax professional is a risk you shouldn’t take.
Insurance
Managing your business unfortunately includes managing your insurance coverage. While insurance is absolutely necessary and unavoidable, there are ways to reduce your rates and ensure that you have the most efficient and cost effective coverage available to you. There are options available to you in the near term and the long term.
First, don’t take the first rate offered to you. Shop around and know your options. Secondly, pay attention to the long game. Managing your CSA score can help you secure better rates in the future. Even if your record isn’t the best today, leveraging your options to improve your CSA score can directly impact your future rates. Not sure how to start? Seek the advice of a CSA professional who can help you understand your score, risk factors and ways to improve your score in the future. For example, TVC Pro-Driver has a proven track record of keeping CSA scores low, because we handle the DataQ challenge on behalf of the driver after successfully reducing or dismissing a citation. Keeping CSA points low has a direct impact on insurance costs, and that has a direct impact on your bottom line. Don’t leave your insurance rates to the odds, especially with the threat of a recession. Take an active role, leveraging CSA professionals in your favor to improve your CSA score, and reduce your insurance rates going forward.
Apply What You’ve Learned
Every day of life is about learning something new and applying it in a way that enriches or furthers your mission or purpose. Today, ask yourself this: “What have I learned, and how can I apply it?” Making mistakes is part of life, but learning from those mistakes can make the difference between barely surviving and thriving in this industry.
In business, especially in a recession, nothing is guaranteed. However, as the author of The Psychology of Winning said, “Life is inherently risky. There is only one big risk you should avoid at all costs, and that is the risk of doing nothing.” When it comes to managing your business, protecting your investment, investing in areas with rapid return and effectively managing your expenses are the key ways to recession-proof. Today, as you manage your business, consider how you can avoid the risk of doing nothing. What steps should you take, or what partner should you work with to protect your investment, invest in your business, and manage your expenses? Find partners and professionals you can rely on and in whom you can place your trust, and you will weather any storm that comes.
