Variable costs are the money that your company spends for operating the trucks.
- Truck Maintenance
Salary is the amount that you certainly need to calculate in your expenses.
With these statistics you can calculate your cost per mile. A key to make a good profit in the trucking business is to properly manage your company’s operating expenses on a per-mile basis.
You should calculate these costs monthly to get the most up-to-date information on how much your company is spending.
One additional advice from me :
Train your dispatchers to find better loads – finding a load with loadbord can be helpful, but not good for a growing relationship with the shipper because you are always working with new clients.
Train your dispatchers how to find good loads and how to develop a business bond with the shippers.
It is extremely important to educate and train your stuff because at the end of the day their negotiating skills can be very important for every trucking company and it can make the difference in some cases up to 20% in load price.
When the shippers are satisfied with your service they will recommend you to other shipper, to work with, getting referrals can be like a wind in your back.
Now when you manage your cost and you train your team, you are ready to eat your fruits of your work!
How to maintain high profit
Once you achieve a high level of profit you need to ensure to stay in that position or even to improve it. The question is, how to do that?
You can start by investing in the equipment to improve the quality of work. Provide your fleet with the best equipment that you can afford. If your fleet is in tip top shape then
- Your will protect the freight
- Delivery will be on time and
- You will get a satisfied customer
The skills of your employees are also the important part of your success. Motivate them, give them time and space to develop additional skills for example business management. Invest in them with proper training so in time they will become more confident to perform new responsibilities that will save you money in the long run.
The Trucking business has its own ups and downs, some companies are going down after 1 or 2 years and some find their way to maintain steady work.
This is not a phenomenon, this is just a strategy that helps them to overstep some difficulties. It is always better to learn from other companies mistakes that from your own.
Having a clear view of the real expenses will give you the possibility to calculate the real profit and to identify your spending patterns and segments where you have a chance to cut the cost and dramatically improve your profit.
Running a trucking company without knowing your costs is like driving with your eyes closed. You have to know the cost of every mile that your trucks are driving.
Download Cheat Sheet: 10 Secret Tips to Increase Profit Of Your Trucking Business