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Many businesses depend on a fleet of vehicles to help them carry out their services. Construction companies, DIY contractors, taxi businesses, and many more all require a trustworthy, quality fleet.
However, the process of building your fleet is important. You don’t want to overspend. Nor do you want to purchase the wrong type of vehicle. Below, we explore how to build a fleet of vehicles for your business.
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Expanding Your Fleet of Vehicles
The first question you need to ask yourself is whether you need to expand your fleet. Begin by considering your financial responsibilities and assessing whether extra vehicles would help increase your revenue.
On top of this, you’ll need to calculate maintenance costs, such as when you have to buy new car tyres (or tires, if you’re in the US). From there, you should be able to calculate the return on your investment in your fleet.
Understanding Your Strengths and Weaknesses
You’ll also need to consider your business’s strengths and weaknesses when building your fleet. Essentially, the question should be: Is it worth building or growing my fleet of vehicles?
If your business has strong cash flow and a growing customer base, then these strengths could lend themselves to a larger fleet. However, if your business is currently shrinking or facing customer satisfaction problems, then it could be worth investing in other areas first.
Purchasing vs. Leasing
If you decide to expand your fleet of vehicles then your first big decision will be whether to purchase or lease your new vehicles. Leasing can help you expand your fleet quickly if your cash flow isn’t strong.
Leases work in different ways. You can lease some vehicles with the option to purchase at the end, or you can simply pay monthly sums for continued usage without the possibility of buying.
On the other hand, purchasing can help secure your business by giving you fixed assets that you can sell if you decide to. However, this can be more expensive in the short term. Moreover, if the vehicles depreciate you can lose money if you sell the vehicles later on.
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General Advice About Expanding Your Fleet of Vehicles
There are a few other things to consider when expanding your fleet, too. By using a financial accountant you can ensure that all your purchases are organized and that they fit into the balance sheet. Meanwhile, it can be worth building your fleet slowly to avoid any sudden cash flow issues.
Finally, you should consider your purchasing method and vehicle type carefully, with the characteristics of your business in mind.
Building, or expanding, a fleet of vehicles for your business can help you take it to the next level. And by following the advice above, you should be all set to methodically build your fleet.
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