As I write this article in early April, the Dow has experienced another turbulent Monday following last week’s losses. This downturn has led to a decline of nearly 10 percent since the beginning of 2025, with other indices reflecting similar trends. Several factors may contribute to this recent sell-off. Still, a key catalyst is the change in trade policies and their potential impact on the costs of goods and services, including expenses related to equipment, parts, and other essential items in the transportation industry.
Analysts expect this policy shift to impact the U.S. economy for at least the immediate future, and while we understand its reasons, the length of this downturn remains uncertain. Therefore, adopting a defensive financial posture during this time can be a wise approach to navigating the upcoming months. With this in mind, here are some steps I have taken during previous periods of uncertainty to prepare for unpredictable times ahead:
1. Establish and adhere to a budget: If you already have one, great. If not, it’s time to put one together. It’s also important to remind your department heads that a budget serves as the financial plan for the year, not as an authorization to spend. Setting limits for significant expenditures above a certain threshold is advisable, even during prosperous times. This approach enhances visibility regarding spending, allows senior management to approve or deny expenses based on revenue and expense trends, and provides transparency for your Accounting department, which can explore alternative funding sources. For instance, if your maintenance team purchases liveries for a new vehicle, these costs might be capitalized as part of the purchase rather than expensed immediately upon receipt.
2. Keep track of all expenses: It’s essential to ensure that you account for every expense. We want to avoid what I call “ghost invoices,” which may be months old and come from various sources, such as maintenance costs, farm-out companies, recruiting expenses, or other significant expenditures. These invoices can unexpectedly affect our finances, either aggravating a good month or worsening a bad one.
Having your teams document their expenditures in a shared spreadsheet is a good idea. You can think of this as a modern-day check register (I know, I just dated myself), accessible to all team members, including the accounting team. This way, they will be aware of any pending invoices, such as those for a replacement engine, transmission, or AC compressor, that have been approved but have not yet arrived. This allows them to track these expenses effectively and make the necessary accruals at the end of the month if the invoice isn’t presented for payment.
3. Prioritize necessary expenses over discretionary ones: My main advice to my teams regarding spending, even in prosperous times, is to focus on using your budget for essential items needed to operate the business within your approval authority. Also, let’s discuss any plans to spend on large discretionary purchases before the funds are allocated. If you’re uncertain whether an expense is necessary or want, discuss it with me before proceeding with the spending.
In these uncertain times, it’s essential to continue investing in necessities such as required maintenance and safety-related items. For example, when asked about purchasing logbooks in the past, I readily agreed because they were necessary.
On the other hand, remodeling the conference room or buying new chairs for everyone may not be wise right now—unless a chair is broken and poses a safety risk. That’s a clear need.
Now is also a good time to review your general ledger to examine your monthly spending. Aim to reduce or eliminate non-essential expenses, including subscriptions, unused services, or assets. Are you renting space that isn’t being utilized and won’t be needed anytime soon? If so, review your lease terms to see if there’s an opportunity to terminate it.
4. Evaluate any planned service additions to determine which ones should proceed: Does your strategic plan for this year include a new route or service? If so, identify the key elements of that new service. Is the client still enthusiastic about it? If they are willing to support it financially, it may be appropriate to go ahead. However, if demand is uncertain and the new service appears risky, consider postponing the launch for a few months to see if the economic situation stabilizes.
5. Consider deferring non-essential hires: Do you need to fill the open cleaner or sales position? While these positions might be necessary, especially if demand is steady and expected to continue for the rest of the year, it’s worth assessing whether the peak season will be over when either starts. If that’s the case, consider delaying the hiring process until later in the year.
Also, review any positions budgeted to start in a specific month or quarter. Is the work you anticipated for these roles still expected to materialize? It’s worth discussing potential opportunities to reduce future costs until the business climate becomes more predictable.
6. Implement your planned changes: If you’ve considered eliminating unprofitable services or making other adjustments to cut costs and enhance efficiency, now is the time to take action.
7. Review Revenue Contracts and Services: Ensure you capture all revenue by carefully reviewing your client contracts. Are there agreed-upon fees or minimums that you are entitled to? If so, be sure to include them on the invoice when necessary.
For instance, if your contract specifies a minimum of four hours of service, but you only provide three hours, you should charge the client for the four-hour minimum.
Also, has the client agreed to reimburse fuel or toll expenses as pass-through costs? If so, ensure that these charges are included.
Lastly, if the client pays a monthly management fee, confirm that the cost is accurately reflected on the monthly invoice.
Are you collecting deposits on time for charter trips and charging cancellation fees if a client cancels within the designated cancellation window? If not, consider the reasons for this.
I recommend discussing any billing changes with the client before unilaterally adding fees or charges, even if they are agreed upon in the contract.
8. Monitor payables and receivables closely: Stay vigilant for any changes in payment terms from clients or vendors that may favor them but disadvantage you, often with little notice. For instance, I recall a situation where a large client informed us of a change in their payment terms from net 60 to net 90 days through a letter sent by their corporate accounting department via U.S. Mail. The client’s representative was unaware of this change, which would negatively impact our business. As a result, we communicated politely that we could not accept these new terms, and they reversed course and kept our original terms in place.
Additionally, monitor receivables closely to ensure clients pay according to the agreed-upon terms. If a client is late in making a payment, it’s essential to contact them proactively and discuss options, especially if the outstanding receivable constitutes a significant portion of your revenue.
9. Monitor P&L performance and other key performance indicators closely: Share these results with your department heads, perhaps during your weekly staff meetings, so they have the necessary information to make sound business decisions.
10. Don’t operate in isolation: Stay connected with your local, state, and national trade associations to stay updated on industry news, government policy changes, economic trends, and developments within your network. Be prepared to adjust your strategies as needed.
Also, remember that these uncertain conditions will affect each company differently, including some of your competitors. Therefore, stay alert for opportunities that may arise suddenly.
The goal is to reduce costs now to avoid drastic cuts in the future. These tips should complement the advice of a trusted financial advisor who understands your situation.
In conclusion, navigating economic uncertainty requires a proactive and strategic approach. Organizations can enhance their resilience during challenging times by establishing a clear budget, diligently tracking all expenses, prioritizing essential over discretionary spending, evaluating planned services, considering hiring delays, and reviewing revenue contracts and services. Additionally, it is important to monitor payables and receivables, keep a close eye on your profit and loss statement (P&L) and key performance indicators (KPIs), and maintain strong communication with your teams.
Flexibility and responsiveness to the evolving landscape are crucial for safeguarding your business’s financial health. As we face unpredictable months ahead, adopting these practices will help mitigate risks and position us to seize opportunities when the economic climate stabilizes. Focus on your core needs, maintain open communication, and ensure that every financial decision aligns with your organization’s overall strategic goals. By doing so, we can emerge stronger and better prepared for future growth from this period of uncertainty.