It is no news that the most important part of any new business life-cycle is to achieve a good balance sheet. To shed some light at this important aspect of running a transportation business as an owner-operator we thought Dan Bell, Financial Controller at Aberstar Fast Freight Ltd, is the best person to talk to, and here is our conversation.
OK, I think these qualities all put are good ingredients for a successful career as an o/o:
• Understanding and practicing good customer service
• Ability to take direction(s) form clients, dispatch and other team members
• Being an independent, logical thinker, are highly important attributes when making financial decisions an as a small business owner, you will be making a lot of decisions as you go on growing your business.
• Ability to work independently and take personal initiative will win any small business owner good number of business relationships that will proof vital in his journey.
• Ability to see big picture and operate accordingly. As an o/o, you are not only a driver or an entrepreneur you are salesperson, a marketing manager and accountant and few other things as well.
• Cost monitoring and controlling abilities. Small things add up, as in the case for all small businesses, being able to control spending is a highly desirable quality.
• Able to work “on-call”, such quality for sure will endure you to fleet managers and dispatch teams.
• Strong business acumen. As an o/o you will make a number of finical decisions that are critical and require basic financial literacy.
Q- What accounting tips you usually give Aberstar Owners-Operators? What these particular tips?
• Contain costs
• Work as much as possible – do not turn down loads
• Rely upon and listen to dispatch
• Be patient and business-like
Q- What is the role of a good financial literacy in helping a new Owner-Operator succeed in his business endeavor?
Good financial literacy will assist the o/o in understanding the way the transport industry works and how Aberstar Fast Freight works. Without a constant eye on costs and without a healthy work ethic, an o/o can spiral into losses. Knowledge and monitoring the most important key to success
Q-What is the most common mistake or assumption new Owners-Operators make when the start this career?
Instant Cash will be my answer.
I have notice this issue with most new business owners. They get into business and expect instant returns’
Dan Bell, Chief Financial Officer,
Aberstar Fast Freight
I have notice this issue with most new business owners. They get into the business and expect instant returns. The transport industry professional (o/o) needs to understand its nature. Aberstar sells freight services which are provided either by company drivers or o/o’s. We constantly acquire new clients due to our reputation for great customer service and price to be quite frank. The o/o receives a percentage of the sale, just as Aberstar does. Aberstar gets paid well after the o/o does.
Aberstar has continuous expenses, and has evolved, as many businesses do, past the lean times, to a point where it can wait to be paid. Notwithstanding, we pay our o/o on 2 week delay. Also, we charge our o/o, if they use any of our services (fuel cards, insurance, etc.) as those expenses are incurred. What ends up happening, until the o/o gets past these “lean” times, is the o/o expects the rewards without enduring any lean times. The o/o has to imagine his initial remunerations to be as if he or she has submitted a bill, and it is paid in 30 days.
The common mistake can be summarized: The o/o takes a $1000 load from Mississauga to NYC on June 1, and returns on June 3 with a $700 load. June 14 is a o/o remuneration date. June 14 comes and the o/o sees his account with Aberstar at NEGATIVE $400. June 28 rolls around and it is another o/o remuneration date. The o/o sees his account – it is credited for the $1190 (70% * $1700) made on the June 1-3 trip and yet it began at NEGATIVE $400 for the fuel associated with the NYC trip. So his net looks like $790. But, June insurance was $650 so he receives a cheque for $140. He is not happy. July 14 is another o/o remuneration date – so we take all the trips from June 15 to 28, say they total $4000, of which the o/o gets $2800, then his fuel is say $1000, and that is it, he receives remuneration of $1800. See attached spreadsheet.
We thank Mr.Bell for his valuable contribution to Aberstar Fast Freight Blog and hopefully we can get him to weigh in on important issues such as business registration, Tax, vehicle leasing and so on.
Please note these are hypothetical circumstances. Numbers, commission percentages used here are to simulate plausible scenarios and common practices in the industry.
Not all business face identical conditions. Data here doesn’t represent a particular o/o partner.
Call General Manager: Mike Rogers 905-826-0128 x234