When owning your own trucking company one of the most crucial parts of the business is determining profitability. Although it may seem obvious, it can be a very daunting and complicated process. Tracking money in and money out is a key part to calculating revenue and profit per mile. This will help determine you company's financial health.
Always begin this process by tracking any of your expenses. After analyzing your miles and learning your cost per mile you can then begin by examining your companies revenue. By simply subtracting the cost per mile from the revenue per mile will begin to determine the amount of profit for every mile your trucks drive. If you have trouble calculating these numbers you can always consult a certified public accountant to help you. In turn, once you have these numbers start to find ways you can grow the profitability for every mile driven. Are there quicker solutions to reduce downtime or are there ways to haul more for each mile driven?
How This Helps Your Business
Knowledge is power in the fast-changing trucking industry. You need to identify what markets to serve and which lanes that will generate the most revenue. It is equally crucial to know how much money your trucking company needs to charge in order to post a profit. Understanding how to calculate cost, revenue and profit per mile arms you with information you need to successfully negotiate rates with shippers and brokers.
There are several aspects to financial management for your trucking company. It all starts with knowing what it takes to be profitable. Calculating cost, revenue and profit per mile is a key step to putting your trucking company on the road to success.
November 30, 2017
When looking to start in your flatbed career one of the first things you worry about is the cost of a rolling tarp system. All you start to see are dollar signs. After a while you feel like you just need to get the cheapest system on the market. This is where most go wrong, they look at their system and career as a sprint rather than a marathon. It is important not to just consider all the initial expenses but also the expenses you may spend after the purchase.
Always remember to do your research, don't just look at the best price. See what each competitor knows about the industry and how they are willing to help you improve what you are hauling. Your service provider should know the ins and outs of your system so if you have any questions or need something that it is not a cookie cutter solution. One of the most important things to make sure of when choosing a provider is not just to choose one based on price but how they can save you money in the future. Your system provider should be able to see if there might be any issues or concerns with your system in the upcoming future and address them immediately. He or she should also be able to let you know about possible ways to upgrade your system to save a buck in the upcoming months.
Remember, the key to saving money is building a lasting relationship. That is where the payoff comes into play down the road. When the person who services your tarping system runs through walls for you than you know you have the right provider.
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