If you’re planning to grow your business, one of the things you will need to do is expand your business resources. Around 54 percent of small business owners use their own vehicles for business purposes, according to a Manta survey. In fact, it’s not uncommon for small business owners to mix personal and business assets during startup – particularly since over half of businesses are run from home. However, as your business grows, there may be increasing signs that it’s time to invest in a business vehicle. So how do you know that it’s time to get a business vehicle? The answer’s relatively simple: by answering a few critical questions about your current and future business resources.
Are You Planning To Take Your Business And Brand On The Road?
A business vehicle can be a useful vessel for business branding. Of course, it also involves deciding on the best way to represent your branding with graphics, logos, and business colors. There is a thin line between artful vehicle business branding and having your business vehicle viewed as a local eyesore.
Ideally, you should keep your vehicle branding design simple and impactful by including things like your business name, contact information, and specializations. Keep in mind that potential customers will only have a glimpse of your business for a few seconds. You don’t want to leave them overwhelmed or confused with too much information. However, if you’re not looking to garner interest or amp up your promotional efforts, it may affect whether you buy or lease a vehicle – and the kind of business vehicle you choose.
Can Your Business Finances Handle The Full-Time Fiscal Responsibility?
Buying a business vehicle comes with additional financial responsibilities. Not only will your business need to pay a purchase price (or acquire a loan to purchase it), but your business will also incur annual maintenance costs, repairs, fuels, and the cost of an additional employee to drive the vehicle. If your plans do not include full-time use of the vehicle, it may be worth considering whether it is financially prudent to add another full-time employee salary to your payroll.
There will also be parking charges, auto insurance premiums, and interest rates to consider if you opt to buy. In some cases where constant or long-term use is not required, it may be better to lease a vehicle. Take a look at your budgets and budgetary forecasts before deciding whether your business cash flow can handle the added running expenses of a business vehicle. The kind of vehicle you choose to buy will also factor into your finances. Different models and types of vehicles will come with different cost features, such as fuel economy, insurance categorization, and added amenities. The use of industry and consumer reviews on vehicle models you are considering can help you narrow down those costs.
Does A Business Vehicle Fit In With Your Growth Plans?
Last (but certainly not least), think about how a vehicle fits into your business plans. For instance, if you’re planning to expand your delivery radius or bring delivery in-house to realize cost savings, then securing a business vehicle makes more sense. Some business owners may also opt to purchase a business vehicle to capitalize on the tax advantages of owning a business vehicle. The key here is to determine whether you have enough reasons for a business vehicle, and whether it aligns with your growth plans. Adding a vehicle to your business can be a good move for growing your business – if it is the right one. Before taking on such a financially intensive business decision, you need to be sure that it aligns with your overall business purpose and financial reach. For some, buying a business vehicle outright may be the answer, but for other business owners, leasing a vehicle may be best. The only question is: which option is better suited for your business?