Overdrive Magazine

September 2020

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8 | Overdrive | September 2020 e first half of 2020 was marked by unprecedented events and reactions. A critical observation amid this tumult: Not everyone is failing. ere are always new opportunities that emerge out of such disruptions, and it's not necessarily one's age or experience as an owner-operator that determines the ability to succeed. To that end, a couple of considerations worth noting at any inflection point on the calendar: If you're not keeping good records and measuring your financial health, how can you make good decisions? A new owner oen sees driving miles as the focus, full stop. You've probably said it yourself: If the wheels aren't turn- ing, I'm not earning. With unpaid bills staring you down, it's difficult to remain calm. A new owner client said it to me last week. is man and others are so worried about not driving every available moment that it is interfering with possibly better, more profitable load selections. e devil's in the details. ose surviving and thriving now know their cost to op- erate the business — all aspects of it. Secondly, they use this information to help control business and personal spend- ing. ose who know operating costs can make educated decisions. Owners who have had a profitable first and second quarter were able to adapt quickly, having a full and calcu- lated control of their business. ey may have had to change the customers and freight, as I've suggested to some clients. Some may have needed to pull a different type of trailer. If you've been too busy driving to consider your business costs or new opportunities, maybe your best move now is to reset the breaker that has tripped from your overload. A good starting line: look beyond profit and loss and complete a balance sheet. at's simply a picture of your assets vs. your liabilities on any given date. Over time, it's an excellent way to monitor your personal and business progress. If you haven't been creating a balance sheet at the end of each year, now is a good time to start. Apply discipline to keep up with it at regular intervals. — Gary Buchs ASSETS LIABILITIES Consider a 'reset,' review your balance sheet Gary Buchs lives with his wife, Marcia, in Colfax, Illinois. The longtime owner-operator retired from active hauling in October 2019. Today, he offers private owner-operator busi- ness coaching. For more of Gary's business recommendations during the COVID-19 crisis, find his work on the Overdrive Extra blog: OverdriveOnline.com/overdrive-extra. Since 2014, when Overdrive last polled readers on cost per mile figures, there's some good news: A good deal smaller share reported not knowing their own numbers, and plenty had made moves that reduced costs signifi- cantly, whether with fuel mileage gains and/or other cost reductions. is comes in spite of a well-documented rise in insurance costs for those with carrier authority. A much larger share reported costs under a dollar a mile, a possible indication of equipment fully paid off. Paired with well-developed maintenance know-how, such a lean operation can be a sizable advantage in a time like the present. Commenter Jim Hinerdeer has such skills and of- fered an example that illustrates rising costs but also the val- ue of knowing your own. Ten years ago, he rebuilt his engine at a "parts cost of $2,000," he recalled. "October 2019 — the same rebuild cost $9,000." Hinerdeer runs short haul today, but for the sake of an example, assume 100,000 miles a year run pretty consistently. A million miles on a $2,000 parts cost would put the rebuild at a cost-per-mile of a fih of a cent per mile. If the $9,000 investment then can be expected to last just as long, that's a full cent per mile. Hinerdeer noted a high $40,000 figure he'd heard from some others on rebuilds performed in a shop — that'd stick you with 4 cents a mile for the next 10 years, all things being equal. Maintenance know-how for such operators, as a different small-fleet owner-operator said, delivers another big advantage in a time like the current one. Big returns possible through DIY maintenance Owner-operators' cost-per-mile distribution (excluding driver pay) $1.01-$1.25/mile 20% $1.26-$1.50/mile 24% $1.51-$1.75/mile 14% $1/mile or less 19% More than $1.75/mile 16% Not sure/don't know 7%

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