Owner Operators Success
I have been very fortunate for the past number of years to be part of the great team of folks at ATBS Canada Inc. During this period of time, I have been busy working with Owner Operators trying to assist them in becoming successful with their businesses. I believe that success does not happen as easily as Hollywood would like us to believe. In fact, I believe the old saying “Success comes disguised as hard work” is more to the point. I would even add to this idea by saying “Success comes disguised as hard work and good planning. “
Using ATBS as a benchmark for how a successful Owner Operators should ‘operate’, success begins with an in-your-face reality check in the form of a personal/business cash flow statement. This document does nothing more than tell the Owner Operator where they stand on a monthly basis in regards to the cash that is coming into the business compared to the cash going out. Simple, right? It is simple and, if done correctly, most Owner Operators will know within an hour where they stand. If you have a good handle on what your revenue per mile is along with your fuel cost and other expenses, you can find out rather easily how many miles per month you need to run to break even.
Think about that last statement. You own a truck, or are at least making payments on a truck…you’re paid by the mile…therefore wouldn’t knowing how many miles you need to do on a monthly basis to cover all your personal and business obligations seem like something that you should know? Once we put that on paper we then move on to a budget. Budgeting sounds like a nasty subject, doesn’t it? Well it is, but remember that success comes disguised as hard work and this is necessary stuff. A budget tells you what you plan on achieving for the next year and how you’re going to do so. Some of what is contained in a budget includes fixed expenses like truck payments as well as variable expenses like fuel and maintenance costs that are dependent on the age of the vehicle. We budget for three month’s worth of operating costs, in case there is an interruption in cash flow.
The next step is the production of the monthly receipts that get mailed into a P&L (Profit and Loss) Statement. This document looks very much like the budget; in fact it’s the document that we compare the budget to on a monthly basis to ensure the numbers are staying on track with your one-year plan. You cannot manage what you do not measure and you need to manage your way to success, not try to stumble into it. Believe me; your chance of success will increase 10-fold when you do your planning and paperwork before turning your wheels.
There are other things that make up good practices as an Owner Operator. Once again, using ATBS as a benchmark; a good program should include general business consulting relating specifically to an Owner Operator’s business; and includes things like the production of a cash flow statement and an annual business budget. It should also include monthly contact with a business advisor to review and compare your P&L to your budget, and it all HST/GST returns and annual tax returns for your business.
I believe firmly in the Owner Operator model in North America. These are some of the hardest working and most dedicated, value-based folks to ever hit the highway and we need them. When an Operator feels the pinch they work harder; what they should be doing so they don’t get into that pinch in the first place is work smarter – and we have the tools to help them do just that. Smarter not harder… that’s the key…always has been.
All one has to do these days is pick up any trade magazine to become distracted and lose track of one’s priorities. Electronic On-Board Recorders, the Hours of Service being re-written once more, Speed Limiters, the almighty CSA coming down the tube, and new procedures for customs entry into Canada are all over the news these days. All of these items need to be monitored and all Owner Operators need to know what is coming at the legislative level, but nothing comes before the business of operating your business profitably and successfully. If you don’t have this as your focus then the rest means nothing.
Ralph Waldo Emerson wrote a piece that applies to many Owner Operators in our industry, “Finish each day and be done with it. You have done what you could; some blunders and absurdities have crept in; forget them as soon as you can. Tomorrow is a new day; you shall begin it serenely and with too high a spirit to be encumbered with your old nonsense.” Each day is a new day, and you may not be doing the things that I have told you that you need to do in order to be successful. Perhaps because your fellow Owner Operators don’t do them, or perhaps because a family member who is an Owner Operator doesn’t have a cash flow, or a budget, or regular P&L’s so why should you? You should because there is a better way, and just because mediocrity is fine for those around you, it should not be good enough for you and your family. There is a better way to live than from statement to statement and for many of you, the future can be bright and bring the peace of mind that you deserve.
But remember “Success comes disguised as hard work and good planning. “
On that note, I wish you all a safe and Merry Christmas!
Ray J. Haight
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Great article Ray.