Whether you are a veteran driver, a brand-new driver, or you fall somewhere in the middle, trying to keep your expenses low and your revenue high is a goal every good and successful owner-operator strives for. Since the costs of being an owner-operator affect your earnings, every step you take should be in the direction of lowering costs. This can make a huge impact on your trucking business.
Becoming an owner-operator has many benefits. Besides having and owning your truck, you make your own income as an owner-operator, and you control your hours. However, there is always a downside to every benefit. For example, owner-operators are responsible for paying their expenses. And to increase your revenue, you must lower your expenses.
Below are some ways as an owner-operator that you can lower your expenses and save you money.
Truck Cost
One way an owner-operator can save money on the cost of their truck is to purchase a used truck rather than a brand new one. A new semi-truck can run you anywhere between $100,000 and $150,000, and if you are interested in custom features, your cost can go up to $200,000.
However, for a used truck, this can run anywhere from $15,000 to $100,000. A used medium-duty truck can cost between $20,000 to $40,000. Used heavy-duty semi-trucks can cost between $30,000 and $80,000. These prices vary because of the following:
Age
Condition
Mileage
Features
Purchasing a good used truck is a great way to save money and still get a good running truck. However, you do not want to purchase a used truck that requires many repairs. Instead, purchase one that is still in good running condition.
Fuel Cost
Fuel can be very expensive, especially for owner-operators that drive thousands of miles. For those who drive 100,000 a year, you can average about $70,000 in just fuel costs. However, there are some ways you can reduce your fuel costs.
Drive slow
When driving down a highway, you may find yourself wanting to get to your destination faster, or you may find that you have a lead foot. However, by just slowing down, you can save a lot of money on fuel. If you reduce your speed from 75 MPH to 65 MPH, you can improve fuel usage by 27%. Reducing your speed not only saves you money in the end, but it can also save you from receiving a speeding ticket.
Reduce Idle Times
When you let the engine idle, this consumes fuel. But do you know how much fuel idling consumes? For one hour of idling, this can burn up 1.5 gallons of fuel. So, if fuel is $2.50 a gallon, and the truck idles for 8 hours, you are paying more than $20 to let the engine idle. If this is done five days a week, that is a little over $100.
Often, drivers will let their engines idle when it is cold outside to still sleep in their trucks. In cases like this, using an auxiliary power unit can help you save on fuel and money.
Cost of Maintenance and Repairs
To be a successful owner-operator and run a successful business, your truck must be in good running condition. This means taking care of your truck and keeping up on the maintenance and repairs as needed. Maintenance and repairs cost money. According to a Truckers Report, drivers can expect to pay about $15,000 a year to maintain their truck and make some repairs properly.
Often when a truck needs repair, the repair is because of the following:
Break wear and tear or damage
Electrical issues
Tire wear and tear or damage
Engine issues
Air line and hose problems
When a repair is needed, this means your truck will be out of commission for some time. To avoid truck repairs, you must properly maintain it. This is done by changing the oil when needed, inspecting the radiator, checking fuel vents, inspecting the brakes, and greasing all moving parts.
Maintaining your truck does cost money, but it can help you save money in the long run. The more you stay on top of your truck, the less costly repairs you will see in the future.
Lower Food Costs
Investing in a refrigerator, lunch box cooler, or microwave can help when storing and cooking food in your truck instead of eating out at a restaurant or fast food. Other ways you can lower your food costs include:
Meal Prep.
Preparing your meals for over the road and take some thought. Most drivers are tempted by stopping and getting food from a restaurant or a fast-food chain. Instead, if you prep and pack meals before you head out on the road, this can help you save money.
Get Food at the Grocery Store
When you are out on the road, find a grocery store with semi-parking and pick up some healthy groceries and snacks that you can store in your truck. Grocery stores often have lower prices than convenience stores.
Avoid Deadhead Miles
To increase your earnings as an owner-operator, it is important to stay away from deadhead miles. For truck drivers, deadhead is driving with an empty trailer. When driving without cargo, you are burning fuel and making no profit. So, when you are traveling the road with an empty trailer, you are not only burning fuel, but you are putting more wear and tear on your truck.
Drivers can avoid deadhead miles by doing backhauls. A backhaul is where loads are taken on a return trip back to or close to your home. Backhauls often pay less than a normal load because the demand is not as high, but you are making some money.
To make more money doing backhauls, plan your route before hitting the road, and know your round-trip rates. If you are making decent money with the original haul, the backhaul earnings can be used for your maintenance costs. A backhaul load is always better than deadhead miles.
Plan a Budget – and stick to it!
Being an owner-operator is also being your own accountant. You must keep track of all your receipts and make a note of every purchase you make. Knowing where and when you spent your money can help you better keep track of how you are spending and where you need to cut costs.
When you write out your expenses, this helps you think about where you could adjust and even maximize your savings. When you make a business plan, try to stick to it and not steer too far. When you steer away from your business plan, you are also messing with your profits.
As you can see above, it takes much planning for owner-operators to save money and have a successful year. However, by starting a good habit of maximizing your profits and options, you will be on your way to having a successful trucking business. In addition, by using these tips, you can gain financial success and help build a good foundation for your financial independence.
We wish you a successful year!
