It's a Team's Life

Know Your Numbers

Anyone who knows me knows that I am a numbers nerd. I say that loud and proud! Some say I am a spreadsheet queen. I will say that I love to analyze what the spreadsheets show. I understand that not everyone has the same passion as I do. That’s okay! What is not okay is burying our heads in the sand because it might not be a passion for everyone.

In the trucking business the numbers start with rate per mile. But that is not where the numbers end. A business owner is in business to make a profit. If a business is not profitable, then the business is nothing more than a hobby. But how do you know if your business is a business or just a hobby? The numbers will tell you. Let’s take a look at how.

First, we all need to know how much our business earns. That would be based on the loads that you do along with any other revenue your business generates. For example, my husband and I both drive. We are also ambassadors for the Independent Coalition for Truckers and I am now a staff writer for Expeditors Online. When we first got into trucking our revenue was completely different than it is today. Over time, we found ways to grow our business by changing equipment and adding endorsements. Some might even grow their business by adding trucks to grow a fleet. This is often times where some stop looking at the numbers.

Second, we can’t forget about the expenses that the business incurs. In other words, how much does it cost to run the business? Without this information there is no way to know if the business is profitable or not. Even if we keep track of the main costs such as fuel, insurance, maintenance, and truck payment, this will help to figure if the business is in the red or in the black.

Third, the next set of numbers needed is the number of miles driven per month and per year. Your logs should help you keep track of your mileage. I have a spreadsheet that I use to keep track of both my husband and my miles driven. I can tie that spreadsheet into both my revenue and expenses spreadsheets to figure out how much our business is making per month and year as well as how much our expenses are costing us per month and year. 

Finally, by tying all these numbers together I know exactly how much our business needs to earn per load to operate a profitable business. While there seems to be an industry standard in the expedite world, does that standard work for your business? If it does, great! If it does not, what needs to be done to make your business profitable? Does the business need to find ways to generate more revenue? Should you add endorsements? Is there a way to cut expenses? These numbers will help to make good business decision. 

Wishing everyone profitable and safe miles!