In the trucking industry, there are two simple facts. Trucks in the shop cost money, while trucks on the road earn revenue. And not only does a company have to pay for the repair being done, but a down truck means money making opportunities are missed as well.
Previously, as a rental manager, I definitely didn’t enjoy when trucks in our fleet broke down and have major repairs. But through the years I had learned that almost every month there were “higher than I’d like” expenses that are part the business. Now of course, my coworkers and I did our best to prevent and minimize those costs, striving to put processes in place that make high dollar fixes less frequent. But the truth is that things happen.
One of my customers raised sheep in the Rocky Mountains. He told me that $40,000 to $60,000 worth of sheep was lost one year due to predator attacks (bears, coyotes, etc.). The thing he said that stuck out to me was that they try to minimize this loss, but it happens every year to some degree. Do the predators adversely affect his business? Yes. Does my customer plan for this to occur? Yes. He is not surprised when he loses sheep in this way, and instead he must work this cost into his business plan.
If you are forecasting or writing a business plan, be realistic and use your experience and other industry knowledge to make plausible predictions. The real world does not always work the way we want it to. Unwanted obstacles may present themselves. We must learn from these challenges and do our best to improve our business in order to curtail the damages. So when these expenses come, don’t be surprised, increase your revenue as much as you can in order to absorb the costs, stay calm, and move on.