'You're the business owner, so be the boss': Take the lead in profit/loss analysis

Updated Apr 11, 2024
Transcript

If a profit and loss statement seems like an intimidating document in all its glorious (sometimes ignominious) detail -- that is, hard to draw much from it outside bottom-line income -- get in the habit of engaging your trucking business' numbers routinely. What you'll find over time is it's much “less intimidating” as a document “when you develop those good habits [and] those routines” and you’re “watching it at every step.” 

So noted longtime Red Eye Radio host Eric Harley in 2024's second mid-week special edition in Overdrive Radio's series of Partners in Business shorts culled from our long owner-operator business-focused talk at the Mid-America Trucking Show last month. (The talk was featured in full in Red Eye's "Extra Mile" podcast.) Today's episode digs into more of the routine business analysis practice participants in the discussion touched on in the last edition, about the importance of stocking the pantry when markets are hot to weather inevitable soft-freight downturns like what we’ve been experiencing more than a year now. 

Rush Truck Centers logoThis year the Overdrive/ATBS Partners in Business owner-operator business education program is sponsored by Rush Truck Centers, the premier solutions provider to the commercial vehicle industry with 150-plus full-service dealership locations in the United States and Canada. The new PIB book is now available for download.Eric Harley teed the topic up with a question about profit and loss statements and any owner-operator's necessary, routine engagement with their own numbers. For ATBS clients, it's aided by the online hub where those owners access monthly P&Ls with the simple push of a button. The better-performing among them do that every month, yet the best owner-operators take it farther, noted ATBS Vice President Mike Hosted. “At least a few times a year, they look at their budget next to their P&L and say, ‘I’ve a roadmap in this budget. Now I’ve got a scorecard’” to see trends in the real results in a P&L. The best assess performance in relation to achievement of profit goals.

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“Are my costs per mile changing?” Hosted asked. “Are my fixed costs changing? Are my home costs changing, and what do I need to do to make adjustments” in service of meeting/exceeding the goals and enabling the ability to save in the war chest for the next down cycle?

Overdrive contributor Gary Buchs invoked a book he read recently called "Crucial Conversations," likewise its subtitle: “Tools for Talking When Stakes Are High.” Take control of what you can control and "decide to decide," Buchs paraphrased part of the book's central message. Actively making a decision to make a decision toward goal achievement can get you one step closer, particularly for those paralyzed by choices.

"When you're an owner-operator, and you're dealing with literally hundreds of decisions," he said, "the one that's on fire is going to get your attention." But don't neglect the other 99-plus, including getting better at "touching your own numbers" regularly, Buchs emphasized. "You have to be the leader, you have to be the boss" in any effort at improvement in concert with business partners.

"As the owner," he added, "whether it's ATBS, a truck shop, the company you're leased to, you're hiring them to work for you. You don't work for them. You're the business owner, so be the boss." Take a listen: 

Find more advice on P&L analysis, bookkeeping and general owner-operator business practice in the brand-new 2024 edition of the Overdrive/ATBS coproduction of the "Partners in Business" book. Download it here. 

Access more shorts in this series via the playlist below featuring both 2023 and 2024 episodes: 

Transcript

Todd Dills: Hey everybody. Overdrive Radio host Todd Dills here, back with another midweek special edition in our series of Partners in Business shorts, culled from a long owner-operator business-focused talk at the Mid-America Trucking Show last month with Red Eye Radio host Eric Harley.

This one digs into more of the routine business analysis practice participants in the discussion began to touch on in the last edition about the importance of stocking the pantry when markets are high, to weather inevitable saw freight downturns like what we've been experiencing nigh on, not more than in fact, a year now.

Voices you'll hear in order of appearance: Red Eye Radio host Eric Harley, who brought us in for his special Extra Mile Podcast for this full roundtable. ATBS Vice President Mike Hosted, and Overdrive contributor and now longtime business coach and former OTR owner-operator himself Gary Buchs. Here's Eric Harley teeing things up with a question about profit and loss statements and any owner-operators necessary routine engagement with their own numbers, aided for ATBS clients by the online hub where those owners can access monthly P&L's with the simple push of a button. Anyway, here we go.

Eric Harley: Something that Gary and I touched on before we went on, and that is the whole planning of it all. And sometimes if you look back, we were talking about a profit and loss statement, it's intimidating to look back, but it's less intimidating when you develop those good habits. As Todd touched on, you develop those routines and good habits. And when that routine is that you're watching it at every step because clearly cost per mile is everything, so you're watching it per mile, and when you are visiting on a regular basis, it becomes a lot less intimidating. Do you guys find that at ATBS to be the case when folks start getting on top of it, it's less intimidating for them because they're building in those good routines?

Mike Hosted: Yeah, absolutely. I mean, we have clients that have been with us all 25 years we've existed, and the best ones look at their P&L every month, right when it comes out. It comes out on our portal. They simply pop on their phone and they look at it and they look for trends and the best ones, at least a few times a year, they look at their budget next to their P&L and say, I've got a road map and this budget. Now I've got a scorecard. Where am I? Are my costs per mile changing? Are my fixed cost changing? Are my home costs changing? And so what do I need to do to make adjustments to make sure that I'm on top of this? And you guys have alluded to, what do I need to do to save for the future? Not just with maintenance, which is the number one cause of failure and very, very important, but what about my taxes? What about that downtime? What about a vacation? What about my kids' college fund?

There's so much to think about, and if you're not looking at it on a consistent basis, you're never going to meet your goals. It's like when you want to lose weight. You can't just say, I'm going to lose weight. You have to have a target and you have to map it. And if you don't do that, you're never going to get there.

Eric Harley: Right. And Gary, one thing is that you're going to have to have that discipline, but the discipline is already there. If you think about the nature of an owner-operator to begin with, you have to be a disciplined individual in order to want to do that, to have that drive, to be out there, to go out on your own, to be a business owner, that discipline is already built in. That is likely part of who you are already. But that discipline is a key in order to fill in all of those gaps of, okay, how do I do this? You build in...

My nephew and I were talking about a process, and when he started building out his container hauling business, he was saying, okay, I built a process now and this is what the process is going to be. And I found when I follow my process, then everything falls into place the way it is, and those things that I can't control are less impactful. So talk about some of those things that drivers can, that owner-operators can and can't control, and how they are able to gain control through those better practices.

Gary Buchs: Great question. I just finished reading a few months ago, a really insightful book called-

Todd Dills: The book Gary mentions there is called “Crucial Conversations,” with a subtitle that should give you a little more insight on the book's purpose. It's “tools for talking when stakes are high.”

Gary Buchs: And as you go through it, one of the things that stood out to me was a little... It sounds crazy, but it says, decide to decide. It all begins with making that decision to actually take action and whatever it is you're doing. And that's one of the problems I see is people imagine they're solving a problem or they imagine the budget and so on, but they aren't really... They've got to nail down certain decisions and then act on them. And that's a harder process than it sounds like because when you're an owner-operator and you're dealing with literally hundreds of decisions, hundreds of situations, the one that's on fire is going to get your attention. I mentioned that I was prepping for the show and I had written myself a personal little blog and it was like, hello, 911? I need help. Where do I turn?

And owners need to not be embarrassed to ask for help. That's the other thing. When they have an area they're not best at, like the services ATBS provides and the Partners in Business. So one of the things I do in coaching is, and I find this is... I try to teach them how to use, for example, ATBS's services to its full extent because what happens, people buy... You hear about, they buy subscriptions and they'll use them for a little bit, and then they keep paying, but they're not participating in the process. You have to be actively participating. You have to be the leader. You have to be the boss. As the owner you're hiring, whether it's ATBS, a truck shop, the company you leased, you are hiring them to work for you. You don't work for them. You're the business owner.

So be the boss.

Todd Dills: So take control and decide to decide to refine those routine analysis processes. Overdrive contributor Gary Buchs has long-stressed regularly "touching the numbers," routine engagement with profit and loss statements that Mike Hosted emphasized and/or cost and revenue accounting, the like of which we've seen from owner-operators featured in our Trucker of the Month series among many others. It's a primary way to wrest control of the business from market whims. Need help in that regard? Track back through our series of Partners in Business shorts from the Red Eye Radio roundtables this year and last at Matt's YouTube playlist, you'll find embedded in the post that houses this podcast for April 10th 2024. Keep tuned to for the next one, wherever you listen.

Overdrive Radio, the primary series sponsored by Howes Products, is on Spotify and SoundCloud, Apple and Google podcasts, TuneIn, Podcast Addict, most any listening platform. Subscribe so you don't miss an episode. And you can find me in all of our episodes via overdriveonline.com/overdrive-radio. This special edition in the long-running Partners in Business program is sponsored this year by Rush Truck Centers, the 140 plus dealer network for sales, service and so much more. Find them at rushtruckcenters.com. Visit overdriveonline.com/PIB to download the 2024 updated Partners in Business book. Learn plenty more from our online series there too about so many topics germane to trucking as an owner-operator. We'll see you next time.

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