When is it Time to Add A Truck?
By John L. Hruska
When trying to grow your business or add a truck there are a few key things to think about. First, do you have the cash or at least some money to fund this growth? Second, do you have the additional work for the truck that you’re adding? Third, do you have another qualified driver in mind for this truck? Lastly, do you yourself have the extra time to manage another truck and driver?
In my opinion there are only a few good reasons to add a truck. 1) Dedicated profitable work that’s growing and you don’t want to miss the opportunity, 2) You know a very good driver that would fit well into your operation, and 3) The company you’re signed on with is growing and they have asked you to add another truck and driver because they like your service.
Here’s a reason to not buy a truck. Never buy a truck solely for a tax deduction. This is not a good enough reason to purchase more equipment. If you need more deductions, talk to an accountant to find out how to get some different tax breaks with your business without having to buy another truck.
Let’s start with the cash, if you’re going to put another unit on the road it’s my opinion you should have at least $12,000 to $15,000 set aside for operating expenses. I don’t mean an extra loan or a line of credit, I mean cash. This should be in addition to your down deposit money on the truck that you purchase. Keep in mind that if you’re adding a truck you will need to get through at least the first few weeks to a month of expenses before you see any money from that truck. Some of the things to think about are as follows: fuel costs, driver’s wages, your first truck payment, truck insurance, license, permits, and don’t forget repairs or upfits for road readiness.
If you purchase a new truck, the extra cash for upfits such as pumps or blowers can sometimes be financed along with your truck loan, but don’t forget if you get a higher interest rate on your truck financing you are now paying interest on your accessories too. And if they break before you pay off your truck, you have a payment on parts that you’re not even using anymore.
If you buy a used truck, review what it will take to get it road ready with your dealer. Remember, no incoming money for a month or two, and you don’t want to use your cash for breakdowns or truck readiness. Try to include into your purchase price things like all new tires, or maybe new brakes and drums, or even all new fluids in motor and drive train. Have the dealer fix any oil leaks or issues that you might see; maybe even add a fresh bumper. Look the truck over very well and take your time in doing this. Be choosy on which truck you purchase. Ask for oil samples or past engine and component history. Becoming educated on the truck purchase will help you get through the early weeks without any surprises.
Now it’s time to put your driver in the seat. Hopefully you have a good qualified candidate, but understand he’s working for you. So, he or she will need your support and respect. You need to give this person the proper tools to make this new truck and your business succeed. Make sure the driver has things like expense cash for tolls or incidentals, fuel cards, and a cell phone. It is imperative that your driver can talk to you when they need you. Don’t leave your driver hanging to make an important decision without you. They need your full support. Make sure the driver understands that proper communication is the key to a good working relationship.
Now let’s look at extra time in your work day. Sometimes we don’t think about the time that it takes to manage additional trucks or drivers. Do you have the time to manage another driver and truck? This is something you need to give some thought to. Drivers are employees, they can’t make major decisions on their own, and you shouldn’t expect them to. If a driver is calling, you need to answer the phone. Maybe it’s about a load they should take or a breakdown, or even a question like, “should I use the toll road or not?” These are calls you must answer. You need to help them with their job to make these decisions.
Do you do your own mechanical work? If so, then you’re now working on two trucks instead of one. This can sometimes make the weekend pretty short when your significant other or kids want to go on a summer picnic or to a ball game. Don’t forget about the extra paperwork, billing, fuel receipts, all the things you do with your truck is multiplied by two.
In closing, adding a truck for the right reasons can be a very positive thing. If you think it through, manage it correctly, and use some of the ideas that I mentioned, you can be more profitable and have a greater presence with your customer or company that you work with.
John’s father started in the trucking business in 1947, John then joined the business in 1981. He owns and operates Hruska Trucking and Diesel Transport along with his business partner and brother-in-law, Clark D Hofecker, in Windber, PA.