Remember the goals you set for your business back in January, well it is time to review them to see how your business did in 2018. Hopefully with the booming economic growth you were able to take advantage of the shortage of available trucks to meet the growing demand. I’m fairly certain you didn’t have a crystal ball to help you anticipate the growth when setting your goals so hopefully the windfall increased your success rate. December is the time to review what had positive and negative effects on your operation and to start setting goals for 2019. Understanding how to properly plan and establish goals is the best way to ensure profitable growth to improve the bottom line. Start with your major goals and break them down into smaller manageable segments. Take them one step at a time, you can’t make a million without making a few thousand first.
Start with the premise that there are two ways to increase profits: either increase revenues at a faster rate than expenses or reduce expenses without losing revenues. To some extent, Revenue can be controlled, but ultimately the rates customers are willing to pay are a function of supply and demand. The carrier who can control the expense side of the equation has an advantage and can move loads more profitably and for a lower rate when necessary. The expenses that offer the greatest return are fuel and maintenance, as they can be improved by utilizing some of the tools and studies that are readily available. To lower fuel expenses, driving at slower speeds will increase fuel mileage, as well as equipping the tractor and trailer with low rolling resistance tires and installing products that reduce wind resistance. Lowering maintenance expenses with preventive programs and utilizing the tools available that are designed to improve engine performance and increase longevity places you, the driver, in control of the costs.
One of the best tools to lowering maintenance costs is through oil sampling and keeping oil clean at all times with a quality bypass filtration system. Get off the oil change oil quality roller coaster that continually replaces contaminated oil with new oil only to have the contamination cycle start all over again. Keeping the oil free of solid and liquid contaminants allows the engine to run more efficiently and last longer. This saves $$$$ today and protects your investment over the long haul.
An oil maintenance program that includes oil sampling not only verifies the quality of the oil but identifies any wear metals or contaminants that indicate the engine is not functioning properly. If the defects are not corrected, it is likely that a costly component failure is inevitable. Sampling creates a historical record that, if properly reviewed and acted upon, will save $$$$$ in the long run and lower overall maintenance expenses.
Don’t forget to winterize your engine before the freezing weather hits. This will pay for itself many times over. Check the coolant to ensure the proper protection levels. Take a coolant sample to check for acid levels and metal deterioration that indicate internal cooling system issues. Check all the hoses and belts replace, if necessary, to avoid breakdown. Review oil samples to detect any indications of premature failures in oil coolers, fuel pumps etc. Remember any dollar spent on preventive maintenance will save you tenfold by avoiding breakdowns.
Another piece of advice I can offer to help you lower your tax burden is to take advantage of all your expense deductions this year. For example, if you don’t have a by-pass filtration system purchase it now and if you already have one order your 2019 filter and sample supplies before 12/31. You can take advantage of holiday discounts and you can deduct expense this year and get the savings benefits next year.
If you have any questions or topics for this column, please email me at: firstname.lastname@example.org