Do you want to start a dump truck business? It’s a great time to do so, even in the middle of a global pandemic.
Many business owners don’t realize the full scale of owning and operating a business. There are a lot of hidden costs that can strain your cash flow. Cash flow is the top reason why over 80% of small businesses shut their doors.
No cash, no business. You don’t want to make that mistake in your business, which is why you have to understand the dump truck operating costs.
Read on to learn how much it really costs to operate a dump truck and how you make your business profitable.
1. Initial Costs of Owning a Dump Truck
The cost to purchase a dump truck varies between $40,000 and $150,000. It depends on the model you purchase, and whether you decide to buy a new dump truck or a used dump truck. If you decide to finance the purchase of the truck, you have to take into account interest costs.
You then have to get the truck inspected, which costs several hundred dollars. Insurance is not an option for your dump truck. It’s a necessity.
2. Maintenance Costs
Dump trucks aren’t fuel-efficient. They usually get between 5-7 gallons per mile. Current gas prices average $2.43 a gallon.
Let’s say you drive the dump truck 1,000 miles a week. You’ll spend between $405 and $486 on fuel alone every week.
You’ll need to get regular maintenance work done, such as replacing the tires. Tires for dump trucks can cost about $1,000 per tire.
If you’re not mechanically inclined, you need to find a good mechanic in your area to do repairs and maintenance. Add this to your expense sheet, too.
3. Other Operating Factors
Do you plan to drive the truck yourself? You have to pay yourself a salary. You could wind up in a situation where you can only cover your business expenses.
If you plan to have employees, you have to factor in their salaries, health insurance, unemployment insurance, business insurance, and payroll taxes.
You also need to factor in licensing fees so you and your employees are legally cleared to operate the dump truck.
How you drive the truck matters, too. If you drive the dump truck too hard, you’ll wear down parts and increase your fuel and maintenance costs.
4. Revenue vs. Non-Revenue Generating Miles
One term that you need to be familiar with is deadhead miles. These are miles where the dump truck is driven empty. These miles cost your business money, and you want to reduce them as much as possible.
It is essential to track the percentage of revenue miles driven vs. deadhead miles. You can easily create cash flow problems if you don’t know these numbers.
Know the Real Dump Truck Operating Costs
If you want any chance to operate a profitable dump truck business, you have to learn the true dump truck operating costs. Hopefully, you now know that there’s more to operating a dump truck than the purchase price.
You need to anticipate financing costs, insurance, fuel, and maintenance. That will help you make sure that all of your miles are profitable.
Head over to the Business section of this site for more tips to create a profitable business.