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VARIABLE EXPENSES EXAMPLES HOW TO
VARIABLE EXPENSES EXAMPLES DRIVER

Well, this doesn’t technically reduce your fixed costs, but as the number of miles goes up, it does reduce your per-mile expenses. Shop your insurance to reduce the premiumsĪnother way to reduce your fixed costs is to run more miles.If you’re buying a new truck, study up on ways to save money on that purchase.

Try to lower the interest rate on your truck loan (not always easy or even possible).There isn’t a lot you can do to reduce your fixed costs, but it is possible. You can figure out how much a deadhead will cost and make a smart, informed decision and not just be flying (driving?) by the seat of your pants. You’ll know that you can wait for a bigger job a few days away because your per-day fixed costs are maybe not as big as you’d imagined. You understand it all better and know what the important areas are to focus on.

VARIABLE EXPENSES EXAMPLES HOW TO

You’ll get ideas on how to reduce those costsĪnd comparing your fixed and variable costs gives you insight into your business.

You’ll know exactly how much you are spending on the road.

Keeping track of your variable costs helps in similar ways:

Seeing all your fixed costs in one place might give you ideas on how to reduce them.

You will know how important it is that you take a job versus waiting for a potentially better one.

You will know (not be guessing) how much waiting for a job is costing you.

It’s important because it lets you understand what’s important to your business.įirst, once you add up all your fixed costs (and do so in a careful, complete way), it will let you know, at its core, the daily expense of running your business. What’s the big deal about that? Why is that important? Okay, so there are fixed costs and variable costs. Total Variable Cost vs Miles Driven (thousands) Why is this important? Total Fixed Cost vs Miles Driven (thousands) One stays the same, no matter how many miles you’ve driven the other goes up.

VARIABLE EXPENSES EXAMPLES DRIVER

A flat salary would be a fixed cost, and a per mile pay structure would be variable.įuel and driver pay are the highest variable costs, depending on the cost of fuel.īelow, you can see a couple graphs that visually show you the difference between fixed and variable costs. Examples of variable costs include:ĭriver pay can fit into either fixed or variable, depending on how it’s calculated. The amount you spend increases directly along with the amount of miles you drive.

Variable costs are the expenses you pay when you drive your truck. Truck mortgage payments and insurance payments are usually the biggest fixed costs. So, to start with: there are two main categories that all your costs are in:įixed costs are the expenses you have whether you’re driving your truck or not. If you’re new to thinking about your costs, this should help you get a grasp of what to be thinking about, at least for the big picture. So this article will be a quick introduction to some basic ways to think about your trucking costs. The guys who never get around to studying and analyzing their costs are the ones who either don’t make it very long, or who don’t make much money. It’s not an extra bonus that’ll get you a little extra money it’s what separates the wheat from the chaff in this business. If you’re an owner-operator or a small trucking fleet manager or owner, it’s a must that you understand the costs of operating your business. Owner Operator Costs – Fixed vs Variable Expenses