10-4 Magazine May 2023

10-4 Magazine / May 2023 57 trucks. I talked to quite a few of them at the truck show, and the theme I heard most often this year was, “It’s tough out there.” Fuel is still high, insurance costs have not gone down, and the shippers are working hard to recoup their losses from last year, when freight rates got crazy. There are too many trucks in the system, and far too many of them don’t know how to operate a business. Yes, if you own a truck, you are in business. It’s not just your job, and you should be making more than the cost of operating it. I hear some drivers tell me they are doing alright. Then, when I ask if they have money set aside for major repairs or replacement, I often get that deer in the headlights look. I know how pricey that can be, since we just rebuilt everything from the fan blades to the drive shaft (that’s a quick way to spend 50K without any guarantee of return on investment). Did I mention I helped do most of the work? Phil Knowlan did much of the engine work, but I assisted him to keep the cost of labor in a reasonable range. I have had a few people see me with the new trailer and assume I sold the old one. When I tell them no, they want to know if I will sell it to them, and for how much, since I’m not using it. First, let’s set some ground rules. Just because you have an asset, you don’t need to dump it to get something else. This is especially true if it’s paid for. I like to use the example of the shoe store. If your furnace quits and you need a new one, you wouldn’t sell the roof to buy a new furnace. So, why would you sell off your tried and true equipment just to experiment with a possible future one? That simply doesn’t make any cents (yes, I spelled that correctly). It also wouldn’t make sense to sell your inventory (shoes) at or below cost to cover the new heating system. In the trucking industry, I see this done every day. Too many drivers are conned into “trading up” or sold the bill that by trading in they will beat the tax man. If you are getting this kind of advice, maybe you should “trade in” your financial advisor. I bring in tax advice because it’s an essential part of most decisions involving money. Not just money spent, but also money earned. How we earn that money is your business. You should be making those decisions, not some salesman who is only in it to make a quick buck. He doesn’t care if it is a good choice for you, he only looks to see if he can benefit from your misfortune. Besides, if I were to sell my wagon it would be “For Sale” not on sale. It has great value to me, especially if I need to use it later. The difference between dumping it now (capital gains) and replacing it in the future (interest on loan) can be the difference between winning and losing, or renting, leasing, or owning. This brings me to my next point: if you lease or rent equipment in the time of change (possible start up), that’s when you can experience some tax savings. Once again, I’m not your accountant, so check any decisions you make with your local tax laws. Your accountant should be an active member of your company’s financial team. I know many of you consider yourselves owner operators and a one man show, but you should still have at least three other people involved in your business plan. Who? They should be your financial advisory council, and it should include your banker, lawyer, and accountant. These are all services you are paying for, but the real question is, do you use them, and are they familiar with your entire operation? I decided to change my scope of operations and work closer to home. Part of that choice was to have more time to kick around the house. Another part had to do with falling freight rates. My westbound freight had become soft and, let’s be honest, this was not the year to be operating in the northwestern states. Can you say snow bound! I lost the motor in my trusty Peterbilt, so a major crossroads had to be faced. Do I retire,