An online discussion -- about opportunities to avoid paying sales taxes on truck parts (for more on that, see below) -- recently got me thinking about what I’ll refer to as parasitic costs buried below the surface of our everyday behaviors and actions. Picture a vehicle door ajar overnight, leaving on an interior light that slowly drains your batteries over a weekend. These little pests are gnawing away at our money! To modify the Universal Technical Institute's definition of parasitic battery drain:
You might experience what is known as a parasitic draw, also known as a financial drain, which is when a continuous and abnormal discharge of money occurs, even after the engine is shut off.
Distractions for trucking business owners are many and multifold. The challenge of current market conditions has the tendency to take first priority with ever-present chatter highlighting widespread discontent. High-volume and frequent negative economic press just encourages more negative thinking. Hope for success dwindles as it all saps owners’ energy away from tasks that previously may have been on autopilot.
It can be easy to slide a bit backward with recordkeeping and managing the details of your business. I think of it as a post-income tax filing mindset. Many of the ideas outlined below seem less critical when the major tax deadline’s not staring you in the face. Yet I’d urge you to consider making an appointment with your tax/financial services provider to discuss tuning up the business now. Arm yourself with a detailed list of questions, and you’ll be better prepared for filing in 2024. And ask yourself: What should be adjusted? Don’t let a failure to rethink become a roadblock.
We tend not to see issues when, looking around, we’re operating pretty much like everyone else we see. We place the blame on external forces -- things beyond our ability to control. Brokers, regulations, detention, equipment manufacturers, fuel costs. The list could go on. Opportunities for improvement are routinely missed -- a lot of the information needed is hidden in the background, in plain sight in some ways but not readily accessible, given the distractions. These opportunities could include available discounts or exemptions we just don’t know about, for instance, or failure to use a recordkeeping system that highlights expenses in a way that’s easy to understand, and timely for an owner.
Opportunities to save money might be limited for different reasons: The feeling that we don’t have time to deal with the unknown, for instance. I’ve been seeing cases of owner-operators paying for services but failing to use the services to their full advantage. Lack of training and customer support on the part of vendors pushes that dynamic along.
A root cause for poor costs management: there’s too large of a time gap between truck owners hauling the loads and an accurate record of all their expenses to generate a profit-and-loss statement for each week, even a P&L for an individual load or trip, as owners like January Trucker of the Month Kelvin Schmidt take the time to build, some in a very low-tech way.
