If you are considering expanding your business, it is an exciting time. It validates the hard work you and many others have put in since starting the business and shows that your business model is working. Expansion can come in many forms and involve a variety of areas, each posing their own challenges, as while expansion is exciting it also raises questions. Staffing or business premises are both areas where expansion is common, but in this article, we are going to look at another area, commercial fleets.
A commercial fleet is made up of vehicles which perform tasks for a business. Typically, these are delivery or service vehicles and a wide variety of businesses, in many industries, rely on their commercial fleet to ensure their business runs smoothly. As mentioned, there are several key areas to look at and ask yourself questions about when considering expanding your commercial fleet.
These include, ‘when is the right time to expand?’, ‘how to choose the right vehicle’, and ‘should you buy or lease new vehicles?’. This article aims to provide anyone who may be considering expanding their businesses commercial fleet with more information on the topic, which will hopefully help their decision.
When is the right time to expand?
Deciding when the right time is to expand your commercial fleet is a difficult process, and there are lots of factors which go into this decision. The two key areas relate to finances and productivity. If your current commercial fleet is struggling to cope with the workload, then expanding may be the right decision. However, this is dependent on if your business has built up the financial resources to accommodate expanding with additional vehicles. If it has then the time may be right.
If you are unsure about either of these points, there are things you can do. When looking at the finances of running additional vehicles, you need to be sure that the extra expense of running more commercial vehicles will result in increased revenue for your company. If the figures don’t quite add up it may be unwise to risk a large investment in additional vehicles and so waiting another six months or a year may be a better option.
Another option which can still increase vehicle productivity, and therefore revenue, is installing a fleet management system. By doing this, you can analyse the performance of your existing vehicles and identify areas where they can operate more efficiently. One key example of this is analysing the routes commercial vehicles take each day using business vehicle tracking data. By implementing more efficient routes, more customers can be served, and fuel usage can be reduced, both of which are financially beneficial.
How to choose the right vehicle
Once you have decided to expand, your attention should turn to the type of vehicles you are interested in. As with any business decision, you need to ensure whatever you choose is within your financial means, but with commercial vehicles, there are several other key points to consider.
There is the possibility you are pleased with the current commercial vehicles your business uses, and if this is the case, it can make sense to go with what you know. This can help your staff as they already have experience using a particular make and model of vehicle. It also allows you to know precisely what impact additional vehicles can have on productivity as you already know the capabilities of the vehicle.
However, there are reasons to consider changing the commercial vehicles in your fleet as you expand. One of the most important reasons for doing this relates to their environmental impact. It may have been a few years since you last added a new vehicle to your fleet. With the progress manufacturers continue to make year after year with their vehicle emissions, this means there could be a significant difference between your current models and a newer one. This is more important when you consider the regulations coming into effect around the world regarding emissions. London is a prime example of a city taking serious measures to reduce their pollution levels. The ULEZ (Ultra Low Emission Zone) has been running for over a year now and is scheduled to expand to cover more of London in 2021. Businesses who operate in city centres, such as London, would be wise to consider if new vehicles meet the regulations in place to avoid fines and further expenses to the business.
Should you buy or lease new vehicles?
For some businesses, being in a financial position to expand their fleet may not mean buying additional vehicles, but instead leasing them. There are some advantages to this, most notably that you can set your monthly payments, you don’t have to worry about the depreciation of the vehicle, and there are options to upgrade to a newer vehicle early.
Buying a vehicle outright is still preferable for some businesses. If you’re a smaller business and don’t want to be tied into a lease contract, there are always used commercial vehicles which can still be a great addition to your fleet at a lower cost.
Only you will know if leasing or buying will be a better option for your business. It will ultimately come down to how you want to pay and what financial position you are in. Both are good options and should be considered when expanding a commercial fleet.
Overall, expanding your commercial fleet is a good thing. It shows that your business is succeeding and by expanding you should be able to grow further. Choosing the right vehicle, and the right way to pay for it is really important and should be given a lot of thought once you have decided to expand your fleet.
Image and article originally from smallbiztalks.com. Read the original article here.