With scorching temperatures here in California and elsewhere around the country, the last thing on most people’s minds is the snowy season. As far from your current mindset as the cold months are, it should be one of the most important things you think of around this time of year. With the weather being great for running freight and most of us seeing steady freight levels within our lanes, thinking of the rougher times ahead will only help in our ability to continue running successfully.
Certain things like checking tire pressure more often, checking coolant levels, and making sure your HVAC system is in good shape, are some regular maintenance items that may require a little more attention in the warmer months. Amongst these things to watch more frequently, one additional item to watch should be your cash flow. While it is easy to get carried away with spending when the cash is flowing steadily, special care must be taken to insure that your business can continue to run when the lanes “dry up”. My own personal goal every year is to try and create a buffer during the warm months that will be something to draft from in the event my revenue is not “up to par”.
Being that I try and operate with the majority of my business transactions being cash and not credit, I often like to have either a build up fund in my main business account by the time the “Black Friday” rush is over, or have a separate business savings account with a pre-determined set amount that I can slowly draft from until the April thaw arrives. Having a few low interest credit cards can help for unexpected expenses, but should not be used as a substitute to a good cash buffer. If you get into the credit card habit, quick building interest can be a difficult thing to dig out from under.
When I started out, there was no one that really taught me how to budget for a trucking business and I was forced to learn as I stumbled along. When buying my first truck I researched freight trends and used my past experience as a company driver for many years to aid in my decision as to when would be the best time to start into business as an owner-operator. I knew freight trends always saw an increase usually starting in April and lasting on through into November, which is why I started running my first truck during April of that year. I have been using this system of building a winter reserve ever since then and have been able to weather the “freight drought” every year.