Take Charge of Your Business

As an Independent Operator, you are a self-contained business. You have your own business number and all of its related obligations: GST/HST reports, source deductions (payroll remittance), T2 (annual returns) and others. You are also in control of the volume of revenue you bring in with its accompanying costs or expenses. You are the master of your own ship, the captain of your own results. Your choices determine your results.

However, far too many Operators delegate their responsibilities to other associates. Miles are delegated to carrier dispatchers. Rates (if you run percentage) are determined by carrier standards and presentation priorities. Let me explain.

A few years ago, I had a new Operator who had never driven on his own before. He was given the choice to run percentage or run by the dispatched mile. His knee-jerk reaction was… “You always make more running percentage than you do by the mile…”. So off he went on his first trip running percentage. They dispatched him out west and he brought back “sticks” from BC. By the time he delivered them and brought back his back haul he found out he made very little net profit. He ran that loop for nearly two months before he finally went into the office and said he couldn’t survive running percentage; he wanted to haul by the mile. Dispatch then sent him south, east or wherever else there was freight… he NEVER returned to BC for sticks. After two months he said he was finally making a little money. The Operator never realized that running percentage meant that he was in charge of choosing his own route/lanes of success. His mindset was still set as an employee: I’ll drive wherever they tell me to drive, and I’ll pick up my check in two weeks.

As a business owner, YOU oversee your customers. If you don’t want them… fire them. It’s not quite as clear when you run by the mile, often mileage Operators or Lease Operators, as I refer to them, are under a forced dispatch system. But high-cost customers must be avoided if possible. Keep in mind that you are NOT entirely at the mercy of carriers. In my 2015 book “Making Your Miles Count: Choosing a Trucking Company”, I clearly show that sometimes, VAST differences exist between carrier contracts. In 1996 the difference was $1800 per month in cash flow and in 2012 it was $3200 per month. So, CHOOSING a carrier is one of the first and most critical choices you make in your business. Your choice determines your destiny.

Another choice I have been writing about for 17 years is the choice of how you present your earnings to the Canada Revenue Agency for taxes. 99% of all those who prepare taxes use the TL2 simplified method, using the $69.00 per day meal allowance system. Everyone knows that CRA doesn’t send you $69.00 for each day you were in travel status. $69.00 is the STARTING figure that is placed in your personal income tax return which is used to calculate a “non-refundable tax credit”. That $69.00 represents a different figure in each province: ONT $16.36, MB $18.34, SK $18.21, AB $16.83, BC $15.56, QC $9.44, NB $19.04, NS $20.80, NT $16.05, YT $16.28, PEI $20.53 or a national average of $17.04 per day. If you compare this to the Non-Taxable Benefits I wrote about in my first book “Making Your Miles Count: Taxes, taxes, taxes” (current figures) $129.25 that represents $112.21 per day multiplied by 245 days (national averages) equals $27,491.45 difference. If you then apply national average tax rates the savings of Non Taxable Benefits to the TL2 is an estimated $12,500. This represents tax savings of $1000+ per month with only the change of how you report your earnings to CRA. This is your simple choice!

This choice is almost always delegated to the firm that prepares your taxes. The option may be awesome, but it represents extra work and expertise from the firm. If they are not willing to do it, YOU pay the price in higher taxes.

Taking control of your business may not be comfortable at times, but you didn’t become an Operator for comfort, you most likely became one to make more money than a company driver could. Making hard choices is a simple part of business, it’s not personal. You need to make the choices that are best for YOU, not for those you have delegated things to.

If you want to check out more advice for Operators go to our YouTube channel (PODCASTS) “Making Your Miles Count.” Lots of great advice… it’s your choice.

About the Author:
Robert D. Scheper is a leading Accountant and Consultant exclusively serving the Lease/Owner operator industry in Canada. His first book in the Making Your Miles Count series “taxes, taxes, taxes” was released in 2007. His second book “Choosing a Trucking company” is the most in-depth analysis of the independent operator industry today. He has a Master’s degree (MBA) in financial management and has been serving the industry since he and his wife came off the road in 1993. His dedication, commitment and strong opinions can be read and heard in many articles and seminars.

You can find him at www.makingyourmilescount.com or 1-877-987-9787.