How important is a financing package that meets your needs? The trucking business is unique in the economy; the payoff to the owner does not increase steadily with time and effort. Income increases but not necessarily the cash in hand.

“That’s the single biggest reason there are failures,” says Steve Mulligan, vice-president of business development for TFS Group. “The key is cash flow management and understanding cost-per-mile,” not overall income which is subject to tax, he says.

As the chart shows, over the life of a typical five-year financial contract, the two biggest tax write-offs for an owner/operator are the interest payments on the loan or lease, and the depreciation or Capital Cost Allowance (CCA) on the truck. Both peak in the second year of operation.

A big problem, says Mulligan, is that instead of socking money away for tax payments and repairs in the later years, drivers buy a new snowmobile or add an addition to their house.