When it comes to business, or even starting one there are many factors you need to consider. Stocks, expenditure, staff, location etc. Today though I will be exploring small business fleets and the best tips to implementing one.
If your business solely trades online you might find yourself in need of a delivery van or two. Or perhaps you provide a specialist service which requires the need to ferry tools from A to B. You are going to need to think about setting up a fleet for your business.
Now you might be thinking, why not just outsource delivery? Or perhaps use a personal car for work-related activities? Although they are still good options. I am writing for those business owners that are thinking long term.
Providing your team with a fleet to help benefit their day to day tasks can have numerous long-lasting benefits. I’m not saying you need to go out and buy a dozen vehicles outright as we all know for some businesses that are not viable. However, I will go over all options available to small business owners when it comes to having a business fleet.
To start with I will address the first question that every person asks:
“How much will it cost me?”
And its the best question in my opinion. At the end of the day when you are trying to run a business, every penny is precious. So to answer that question as broadly as I can.
It all depends on what your business goals are.
Are you looking to also add assets to the business or are you only concerned with getting the job done? How will your fleet be working? How far will your staff be expected to travel? What is the purpose of your fleet?
All of these can be contributing factors of how you will be acquiring your fleet.
So there are two options available for business owners when it comes to having that dream fleet. The first option would be to buy your fleet. The next would be to lease. I will go over the benefits and negatives of both to hopefully help you make an informed decision on whats the best option for you.
Buying your fleet
So the first option will be to outright buy your fleet. Now we all know vehicles of any standard are not cheap. So you are limited by the amount you can purchase in one go.
However, hear me out on why this could be the best option for you.
So to begin with the main benefit for buying and owning your fleet would be exactly that. You own it. Vehicles that belong to the business can be a valuable asset. You can sell this asset should you need the extra cash. Your balance sheets will be stronger and as long as you keep the vehicle in good nick when you no longer need it then you can sell it on.
Also when you own the vehicle, how you dispose of it at the end of its life is entirely your decision. You won’t need to be too concerned about the mileage and state of the vehicle either. Owning a fleet allows that flexibility and freedom to do as you please with the vehicles without having to consult further people.
If your car gets damaged, how you deal with that problem will be entirely down to your personal choices. A small dent that is not impacting the performance of the vehicle will not concur extra charges which can come with leasing.
Now another perk would be that you can claim capital allowances on cars that are as part of your fleet or if you are using vans/lorries/motorcycles etc. you can claim AIA (Annual Investment Allowance). Cutting initial costs down especially if they are low on emissions.
Of course, there are also going to be some negatives that come with purchasing a fleet. One of the main and most off-putting is the initial costs. Buying even part of a fleet for your business is an investment and more than likely one that will need to be funding by business loans. Which to small businesses, loans like these more likely to be needed for other fundamentals.
This investment especially when the business is small might not seem like a good one for the short term. Also with the extra costs that might come with hiring an individual to manage the fleet and to maintain, the numbers start adding up.
Another con that comes with purchasing your vehicles is that although they will be classed as assets. The value of these assets will deplete over time. As newer shinier more tech-savvy cars emerge, the ones that were before them become less of value. Also with added wear and tear and more mileage that comes with buying any car over 10 years old. The offers that will come will take all of these into consideration and will impact on the price.
Leasing your fleet
Now onto the next option. Leasing a fleet. This seems to be a more practical choice for most business owners. There are a number of companies that can provide your business with the right fleet suitable for your business needs.
So let's take a look at how leasing could be the option for you.
Leasing comes with more benefits than buying. First being the costs. When it comes to leasing you pay a fixed monthly rate, spreading the costs in a way that is less choking than having to find vasts amount of cash. Most companies will also create bespoke payment plans that suit the needs of your small business.
Next benefit to leasing is time, or should I say more of it. When you choose to lease you are also choosing to allow someone else to manage the fleet. Time is precious in any business so when you have to either manage the fleet yourself or find another staff member to do the job. You lose that time spent on other business tasks.
Leasing free’s up this time so you and others can focus on other aspects of the business.
Another perk of leasing your fleet is never falling behind on technology upgrades or new car models. When you lease a vehicle there are options to upgrade them after so many years. As cars are becoming more advanced and are giving off fewer emissions.
Its only natural that you will want your business to follow in that direction too. These newer techs are also making vehicles much safer to drive which can also impact on your insurance (I will get onto that later).
Of course, there are going to be disadvantages to leasing too. First one, which I spoke about before is that these vehicles are not going to owned by your business, so will not be assets that can be sold on should you need to.
Next is sticking to mileage limits. When you lease any vehicle you will be given an amount of mileage that you will need to keep under. This gives drivers less freedom and also limits business needs, especially emergency ones that require long/unplanned trips. When you go over this mileage charges can be dished out, racking up the costs.
The last disadvantage to leasing would be taking extra care of the vehicles you are borrowing. There will be occasions where your vehicles will be scraped or bumped. When you own the vehicle how you deal with that would be your discretion.
However, when you lease vehicles must be kept in the same, almost perfect condition it was in when it was leased to your business. This added pressure can put drivers off and when these accidents happen to be prepared to pay for them.
Now you have your fleet, you have your business goals and you are ready to get on the road. The last piece of advice I should part on you is to ensure that you take out the best possible fleet insurance.
The implications of not taking out insurance on your fleet are huge and not worth compromising. By law, any vehicle that is on the road will need to be insured.
Fleet insurance policies will cover most business needs from a mini-fleet to large scale ones. So don’t be worried about thinking your fleet might be too small. Most brokers will sit down with you and consider all aspects of the business.
Taking into consideration the nature of the business. For example delivery trucks, taxis, business cars etc. They will look at how you will be using your vehicles.
Another factor they will look at will be the age of those driving. If you want to keep costs lower then only allowing those over the age of 21 drive will help. However this doesn’t mean that those younger can’t drive, they will be just be assessed for risks and more resources will be put into them.
Young drivers are statistically more likely to be involved in accidents. So your insurance broker will help you minimise these risks and keep costs low.
A good insurance broker will be able to create a bespoke plan that will suit every aspect of your business.
So hopefully there is some food for thought for you. When choosing to add a fleet to a small business you are adding flexibility and freedom. You are creating an element of your business that will be benefitting you as the business owner, your staff members and customers. The last thing now is to add some snazzy branding and you are good to go!