How to Build a Budget as an Owner-Operator

When you’re considering becoming an owner-operator, it’s a good idea to build a household budget and a business budget.

Build a Household Budget

The first months of starting a business are often when unexpected costs arise, especially in the trucking industry. Compiling a business budget will help you determine how many miles you need to drive to be profitable. Even if you are just in the planning stages of becoming an owner-operator, building a business budget can help you begin to understand and plan ahead for how much money you will need to be successful. Then, you’ll be in a great place to purchase your first used commercial truck.

Income

List your personal monthly income at the top of your budget (if both spouses work, include both incomes).

Fixed Costs

These are expenses or costs that are the same every month, like your house and car payments. Multiply those monthly costs by twelve to arrive at your yearly costs in each category.

Variable Costs

These are costs that vary from month to month, like your electric and phone bills. You can use your checkbook to find an “average” to plan for each month. Add your 12-month costs to arrive at your yearly costs in each category.

Here is a sample household budget to review.

When you build your own budget, make sure to include everything you spend money on — food, medical bills, entertainment — everything. That is the only way to get an accurate picture of what you need for your household.

Build a Business Budget

The first months of starting a business are often when unexpected costs arise. Compiling a business budget will help you determine how many miles you need to drive to be profitable. Even if you are just in the planning stages of becoming an owner-operator, building a business budget can help you begin to understand and plan ahead for how much money you will need to be successful.

If you are an experienced driver who is becoming an owner-operator, you have a good idea of how to estimate the miles you can drive in a week, a month and a year. If you have never personally handled some of these expenses, talk with successful owner-operators who have. They can give you ideas on what to budget for tires, maintenance, plates, permits, taxes and everything else you will need in your business.

Miles

List the actual miles (the total miles you expect to put on your truck) at the top of your budget, and then include the revenue miles (the miles you will get paid for hauling freight) below that.

Fixed Costs

List the fixed business costs, such as your truck payment.

Variable Costs

List the variable costs, such as fuel and oil, maintenance, repairs and lubrication, tires, truck washing, toll, office supplies, phone, etc.

Here is a sample business budget to review.

To get started, you can either estimate your budget yourself, or talk with other drivers and get their help in determining costs.

Be sure to account for slow months. There will be times when your trucking business will slow down, whether based on weather or the economy. You need to be able to make it through these slow times so you’ll be ready for the good times once again.