November 13, 2013
A NEW YEAR, NEW GOALS-GETTING YOUR TRUCKING AUTHORITY
The beginning of a new year is a popular time for people to make big life changes, like getting your DOT Authority and starting a new trucking company. It is a big life change and can be a scary step to take, but the rewards can be well worth it. I am a big fan of small businesses and the entrepreneurs who run them. Small business owners built this country and are still her foundation today. We need more such people. If you are sitting on the fence, trying to decide if you should apply for your operating authority, here are a few benefits of business ownership.
BUSINESS EXPENSES AND TAX BENEFITS
When you own a business, that business can buy many of the things you use everyday, making those purchases tax deductions, and lowering your taxes. Here is a list of some common items that can be paid for by your business and written off as business expenses by trucking companies. I have also estimated their monthly cost:
- Cell Phone $100
- Computer Hardware and Software $50.00
- Automobile Expenses $100
- Part of your home and utilities (If you have a home office) $100
- High Speed Internet $80
- Office Supplies $10
- Tools $20
This is just a short list; there are many more things that can be paid for by your business. Just those items alone come to a total monthly cost of $460 or $5,520 a year. That is about $1,104 in tax savings for someone in the 20% tax bracket. Depending on your business and the tax strategies you and your accountant use, the tax benefits of owning a small business could be significantly larger than that.
When you first start out with your DOT Authority, chances are you will be running the business and driving your truck. I recommend you pay yourself a mileage based wage, just like you would a driver you hire off the street. That wage is hopefully similar to what you are making now. Hard work and good decisions should result in profit above and beyond what you are paying yourself for driving the truck. Instead of going to “The Man”, like profit does when you work for someone else, you get to keep that money and either reinvest it in your business so it grows or you can pay it to yourself. The beauty of owning your own business is that you will be the one to benefit from your hard work and the good decisions you make, not the shareholders of the corporation you work for.
If growing your business is one of your goals, as you add more trucks you will be able to stop driving and just run the business. That will allow you to stay home and sleep in your own bed every night.
Additionally, as you grow you will also have more assets in your trucks and trailers, which will have a significant positive impact on your net worth. When it comes to retiring or selling the business you will have assets that can be sold along with the value of a business that can be a significant part of your retirement plan.
YOU HAVE CONTROL
You are in control of almost everything. Here is a list of some of the things you control because you own the business.
- Your own destiny, you can’t get fired
- The people and customers you work with
- Your priorities, including your work/life balance
- Flexibility with your daily schedule
- The type of work you take on
PRIDE OF OWNERSHIP
Owning a business gives you more motivation to work harder and do a better job. It challenges you and drives you to be better and achieve more. You know that your efforts have grown the business into what it is and that is an awesome feeling. Let’s face it, there is nothing better than to be able to tell other people you own your own business.
Business ownership is not for everyone. For those who are willing to take the risk and have the drive and skills to make a business successful, the possibilities and benefits are limitless. To learn more about getting started, click here.