Overhead, It Ain’t Sexy | Episode 99
The war in Ukraine has been fascinating to watch. Seeing how the Ukrainians have stepped up and how badly Putin has messed up is one of the most interesting things I have seen in a long time. The war in Ukraine has made me do a lot of thinking and I notice myself trying to take lessons from what I am watching and applying them to business.
A famous saying in the military is, “Tactics win battles, logistics win wars.” Logistics isn’t usually the sexy thing in war, but it really is one of the biggest, if not the biggest, difference maker. Just as in war, in business it’s often the not-so sexy things that are the difference between winners and losers.
What To Expect From Episode 99
Just like logistics, managing overhead is not sexy, but doing it poorly will sink you, and doing it well will put you ahead of your competition. In this episode, Craig and I talk about what overhead is and what to watch out for. Low overhead can be a major competitive advantage for small trucking companies. Large trucking companies have an advantage by purchasing in bulk. They save on expenses like fuel, tires, and maintenance. Small trucking companies can more than makeup for that advantage by running lean and limiting their overhead.
Haulin Assets biggest overhead expenses:
- Owner salaries
- Permanent parking space rent
- Small miscellaneous expenses
Large trucking company overhead:
- Office rent
- Property taxes
- Vehicle for owner/manager/employees
Listen to the episode to hear about the one mistake that is by far the biggest that I see companies make with overhead, especially small trucking companies from Owner Operators to companies with 20 trucks. Don’t make this mistake, I see far too many companies go out of business because of this one thing.
Get out and network! One of the more common questions I get from people is how we are getting trucks. I think there are two big reasons we are getting trucks. First, we developed a relationship with a salesperson. That did not happen overnight. Networking is important and relationships are critical. Because we had a relationship with him, he told us in the Spring of 2021 that if we wanted trucks in 2022 we would have to place an order for them by the beginning of July 2021. The second big reason is because of that conversation, we made a plan for what we wanted in 2022 a year ahead of when we wanted the trucks. We should get our first 2022 truck around the end of April/early May, but we placed the official order for that truck in July, along with all the other trucks we want in 2022.