When Is The Right Time To Expand Your Commercial Fleet?
The saying goes that you have to spend money to make money, but that can be difficult when it comes to business. Spending too much money at the wrong time can have a seriously detrimental effect on your bottom line (it could even mean closure, as the worst-case scenario), and even if spending that money would bring in more revenue, that doesn’t mean that now is the right time to do. So how do you know when it’s time to expand your commercial fleet and spend money on new vehicles?
If Your Budget Can Take It
Before you buy anything for your business, you need to work out exactly how much you can afford to spend. Your budget is all-important. To do this, you can begin by working out how much money the new vehicles will allow you to make, and then looking at the money you have available to spend. That’s the way to find out whether buying these vehicles is a good idea or not. If those sums add up, then you need to look at where the money is going to come from. Will you need to pay out for the whole cost all at one, or can you pay monthly? If so, how much of a deposit will you need to pay? Plus, don’t forget it’s not only the cost of the vehicle; there’s insurance and taxes to consider, as well as fuel and general maintenance. Can you afford that? If so, great – start looking. If not, it’s not a problem. You know how much cash you need, so when you get it, you can move forward with your plan. Overspending because you’re excited to buy or lease a new vehicle is a big mistake. Be patient if you need to be.
If You Can Cut a Deal
When you start looking at all the adverts for trailers for sale, or vans to be leased, or anything else that might be required, you can easily be tempted. They will look enticing and shiny and you may even try to convince yourself that the price you see is a good one. Sometimes it will be. Sometimes an advertised price is a fantastic deal, and is worth every penny. This is great because you’re already saving money, and that is ideal for any kind of business. Spending less and making more is how all successful businesses thrive. If, however, the price you see doesn’t match with the budget you have carefully worked out, then you need to think carefully. What is your leverage? If you have a good bargaining chip, you can potentially speak to the dealer about discounts for multiple vehicles, or even a discount on one if you can find the right angle. Of course, there is no guarantee that this will work, so don’t be discouraged. There are other dealers, other vehicles for sale, and more time. If you are really struggling to get your work done with the vehicles you have, you might want to consider hiring something until you can work out a way to buy it.
Consider an alternative solution
Adding more vehicles to your fleet should be the last resort when you’re looking to expand your business operations, as doing so can be costly. Not only do you have to factor in the expense of the new vehicles, but you may also need to increase your staffing. Are you confident that your fleet is running as efficiently as possible? If not, then you should first assess the productivity of your existing fleet. Using vehicle tracking technology can reveal a lot about your operational efficiency and this data can be channelled to improve productivity and can even save your business money.
If It Will Help
If buying or leasing a new commercial vehicle will help your business, and if you can afford it, then it could well be time to start looking. If, however, when you really look into it, it won’t help you as much as you hoped it would (if at all), then postpone. It may not be want you want to do in your heart, but this is most definitely a time to listen to your head. Save your money and look at other ways of building the business.