Starting and running a trucking business involves a lot of financial planning. A well-structured budget ensures that you’re prepared for all expected (and unexpected) costs. If you forget to account for certain expenses outside the most obvious ones, you may end up in financial trouble down the road. Here are five critical things you can't forget when budgeting for your trucking business.
1. Licensing and Regulatory Fees
The trucking industry is heavily regulated, and staying compliant with all licensing and regulatory requirements is non-negotiable. You’ll need to account for fees such as:
International Registration Plan (IRP) and International Fuel Tax Agreement (IFTA) filings (if operating across state lines).
These fees aren’t one-time expenses; they need to be renewed periodically. Missing them can result in fines or even being taken off the road, so they must be consistently accounted for in your budget.
2. Maintenance and Repairs
Owning a trucking business means taking care of your trucks through regular maintenance like oil changes, tire replacements, truck washes, and inspections. These routine expenses should be part of your monthly budget to ensure your trucks stay in good working condition.
However, unexpected breakdowns can happen at any time, and the cost of repairs, such as engine or transmission failures, can be significant. It’s essential to set aside rainy day funds to handle these emergencies, keeping your business on the road and preventing costly downtime.
3. Business Fees for Your Trucking Business
Running a trucking business involves much more than just moving freight. There are many hidden business expenses that can quickly add up, including:
Accounting and Legal Fees: You’ll need professional assistance to file taxes, handle legal matters, or set up contracts. Fees for accountants, bookkeepers, and legal consultations should be included in your budget.
Consulting or Dispatch Services: As your business grows, you may need advice from consultants, or assistance booking loads and managing your business through dispatchers.
Factoring Fees: There may be special fees that you need to account for if you decide to work with a factoring company.
Association Dues and Subscriptions: Memberships in trucking associations (such as the OOIDA) and subscriptions for essential services like fuel card programs, load boards, or software to manage operations should also be considered.
4. Office and Administrative Expenses
Even though much of your business happens on the road, there are still significant office-related expenses to consider:
Office Rent and Utilities: If you rent an office space or store your trucks in a facility, you’ll need to account for rent, electricity, and other utilities.
Truck/Trailer Storage Fees: Parking and storage fees for trucks and trailers, especially during off times or when they’re not in use, need to be budgeted.
Office Supplies: From pens and paper to computers and software, office supplies are ongoing expenses that add up over time.
Advertising and Marketing: Whether it’s paying for social media management, printing business cards, or running advertisements (services that Soshaul offers!), these costs are essential for attracting new business. Online marketing efforts, such as managing a website, paying for domain hosting, and promoting your services, also require funding.
Bank Charges: Don’t forget about banking fees, whether for wire transfers, loan interest, or general account fees.
These costs are easy to overlook but are necessary to keep your business running smoothly behind the scenes.
5. Your Salary as an Owner-Operator
One of the most commonly overlooked costs by new business owners is their own salary. As the owner-operator, your time and effort are valuable, and you should pay yourself a fair wage. Setting aside money for your personal compensation is crucial, not just for covering living expenses but also for maintaining your own financial stability.
Failing to budget for your salary can create stress and lead to burnout. Make sure you plan for a reasonable salary, based on your business income, to keep both your personal and professional life on track.
Budgeting for your trucking business involves a lot of moving parts, from licensing and maintenance costs to handling business fees and paying yourself as an owner. By including all these often-overlooked expenses, such as legal fees, consulting services, office rent, and marketing costs, you’ll be better prepared to manage your finances effectively and ensure the long-term success of your trucking business.
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Soshaul Logistics LLC and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. It is meant to serve as a guide and information only and Soshaul Logistics, LLC does not assume responsibility for any omissions, errors, or ambiguity contained herein. Contents may not be relied upon as a substitute for the FMCSA's published regulations. You should consult your own tax, legal and accounting advisors before engaging in any transaction or operation.
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