Over the course of the Thanksgiving week I read about and talked to owners who expressed a nagging feeling of discontent with the trucking life. So many are missing the love of family and friends, and asking if the money is worth it. On top of that, the COVID-19 pandemic is now in what I refer to as “COVID 2.0,” and the uproar over the election continues to be a mental tax, no doubt.
In the midst of all this, a reminder: Be thankful that, at least for most owner-operators, you have not been forced out of work. You may have had to adjust your equipment, or the commodities you hauled, but overall there is still high demand for your services.
That’s markedly different from the situation of legions of small business owners. Many were forced close in the spring, some having limited reopening later, now circling back to closure in what could be the final nail in the coffin for their business.
One lesson in this is there’s no way to predict the future.
That being said, it’s possible to set yourself up for a variety of contingencies with smart prep. Identify your priorities, including remaining faithful to yourself and family. Have realistic goals and set in place your plan, not what others say you need or should do.
It’s high time to cut through the distractions and disruptions and take control. Make a list of everything you’d like to get done business-wise before the year’s out. Define the top 3 items on that list.
On the personal side, highlight on the calendar the days you want to be off work and at home. Never feel guilty about taking time off, whether all these business tasks can be totally completed or not.
This is what I call a “truck driver life hack,” a little thing that provides you some additional freedom by way of a predetermined psychological permission slip. It helps remove any guilt associated with not working. (We’ve all fallen into the trap of bragging about working more, driving more and grossing more in a week than others. That’s just human nature.)
6 steps to take stock of the year past and jump-start 2021
Did you achieve your goal for 2020? How are you going to adjust for 2021? What’s the prize you’d like to capture? These are good questions to ask ourselves in the next 27 days – on business and personal sides of our lives.
This business-focused list ought to give any owner-operator a few ideas about ways to kick-start your new year:
- Close out your 2020 bookkeeping. Be prepared to submit numbers to your tax preparer as soon as you receive your supporting documents – 1099s, loan interest documents, retirement account notes and the like.
- Dive into your profit-and-loss statement to look for financial leaks. Find expenses you might be able to eliminate in 2021 for better business efficiency. If you have shortcomings in your bookkeeping system, figure out how to personalize this and make your record-keeping a useful tool, not just something to look at in January for tax purposes.
- Complete a financial statement/balance sheet as of 12/31/20 – I wrote about this around mid-year, when it’s a good idea to update the balance to sheet to track progress. This should include all your assets compared to your liabilities. It’s a very useful document for evaluating your business progress and personal financial health. If you’re able compare these calculations year over year and at mid-year, all the better.
- Make a list of your debts. Rank them according to interest rate, from high to low. Prioritize the high-rate loans to pay down these debts as soon as possible. Consider whether you can avoid taking on additional debt in 2021.
- Research your retirement savings options. This is particularly important if you do not have such an account at all. Talk to your tax preparer about options, too. Depending on the kind of account you have, you may have until you file your 2020 taxes to make deposits that could help reduce your income tax burden, such as with a traditional IRA. There are multiple account-type options, so ask for help from a certified professional.
- Make an honest evaluation of your cost of doing business. We are very good at being dishonest with ourselves. We rationalize things that aren’t rational, and tell great stories about what we do and how much money we make. Then how often do we boast about not paying taxes? Oh, and are you including your own salary in your costs?
If you want to claim the prize at the end of 2021, your journey begins now — one step at a time. Don’t allow others to distract you. Take 15 minutes every working day to review your goals and remind yourself of your top three priorities for the days ahead.