“We let our emotions get in the way of making sound decisions,” said Overdrive Extra contributor Gary Buchs. The owner-operator coach, recently retired from the road, was speaking to the tendency of many in business to put an outsize focus on the wrong areas — gross revenue, for instance, when the central goal should be profit.
Buchs was speaking as part of a discussion with satellite radio host Kevin Rutherford and Overdrive during one of the Partners in Business Overdrive‘s GATS Week online seminars in August, answering readers’ questions.
Overdrive’s Partners in Business is sponsored by TBS Factoring Service.Buchs shared what he considers a common source of irrational decision-making — taxes, one he also took up last week on the Overdrive Extra blog. Beware the advice, he said, that “you need a new accountant” if you’re paying taxes as an owner-operator.
“I want to be the guy in the room who paid the most tax,” Rutherford said, indicative of the owner who made the most profit. Rutherford cautioned against the lure and luster of big-ticket equipment purchases simply for the tax advantages.
Find more information about taxes, truck purchasing and more in the updated 2021 edition of the Overdrive’s Partners in Business manual for owner-operators, available for download via the link.
He’s been approached numerous times over the years by an owner-operator whose accountant has suggested they do just that — buy equipment simply for the depreciation benefit. He’ll ask that owner for the number one reason he/she got in business. “It’s usually money. ‘I want to make more money,'” Rutherford said, paraphrasing the answer. “Then it’s freedom, and they’ll go down the list.”
Eventually, the owner runs out of reasons, as Rutherford put it: “And I’ll say, ‘You never once said that you got into business to pay less tax.'”
While it’s important to have a plan to regularly set aside a portion of profit for the tax man, Rutherford and Buchs suggested, don’t let the emotions around tax liabilities divert your focus from clear profit goals.
Hear this portion of their discussion in the above video, and follow this link for more in our Partners in Business series, produced in partnership with owner-op business service firm ATBS and sponsored by TBS Factoring Service. Audio of their full session is available via this edition of the Overdrive Radio podcast.
