For owners of small- and medium-sized businesses, there are so many elements to be handled that finances often do not get the attention required to drive a sustainable and growing business. It is widely reported that 82% of small businesses shut down due to poor cash flow management, and CB Insights reports 39% ran out of cash or failed to raise new capital. This is especially tricky for businesses with company vehicles.
Business owners can tap financial tools and make strategic decisions to make running and growing their vehicle fleets more efficient. As demand for their goods and services increases, business owners can be better prepared to improve their fleets’ capabilities, productivity, and efficiency while paving the way for growth.
These tips to evaluate use, budget and finance can help business owners manage their fleets efficiently and determine the right time and right additions for their company’s success and growth.
Think MAST
A good first step is to understand how a company’s vehicles are utilized. Just think MAST.
* Miles – How many miles are anticipated per year?
* Application – Does the company have the right vehicle for the job? In other words, are fleets hauling feathers or cement?
* Specifications – What vehicle equipment is needed: towing and hauling, custom storage, onboard power?
* Term – A good replacement cycle plan will save fleet costs in the long run.
Understand the company’s fleet finances
One important job for business owners is identifying realistic budgets. Here are steps to help steer a company in the right direction.
* Plan and set goals – Take stock of the current vehicles and expected replacement cycle. Don’t wait until a vehicle is needed. Business goals should include plans for future changes.
* Review past expenses – Past expenses can provide a reference point for what to include in a fleet budget and highlight areas that need attention.
* Forecast – There are various techniques, including simply increasing a previous year’s budget by a flat percentage or starting from scratch, to forecast potential costs for your fleet.
* Track results – It’s essential to make this a routine part of your business processes.
Determine the best financing options
Next, business owners with fleets need to examine the best financing for their budgets – and for the long haul. Here are a few things to consider.
* Lease or own – There are advantages to both options, so comparing them is key. Leasing benefits may include more affordable payments, allowing funds to be invested in other areas. However, owning fleets allows for less frequent vehicle turnover and flexibility on mileage.
* Fleet financing – One option is a commercial fleet financing partner. In addition to expertise in fleet financing, Ford Pro FinSimple offers a Commercial Line of Credit (CLOC) that helps fleet owners save time. A CLOC provides businesses with easy and transparent financing with flexible terms that is ready to be used any time throughout the year.
Andrew Comrie-Picard, the founder of ZipTire, a Los Angeles-based mobile tire business, is a customer of Ford Pro FinSimple, which provides easy fleet financing for small- and medium-sized businesses. He says, “I financed my first truck through Ford Pro FinSimple financing. And now as we’re growing, I’m really excited to work with Ford Pro FinSimple in order to build out our fleet, get more vehicles, and be able to upfit them.”
Find a commercial-centric partner
When shopping for a new fleet, it is important to find a dealership that will partner with you throughout both the purchasing process and the life of your vehicle.
* Establish a relationship – Look for a dealership that has experience in commercial vehicles. This will ensure you receive help for your business-specific needs and that when you’re ready to finance, they’re ready to deliver.
* Service is key – Good vehicle service can help business owners avoid downtime with streamlined maintenance, repairs, and parts to keep their fleets in good working order. Some dealerships even provide 24/7 mobile service.
To learn more about how Ford Pro FinSimple can serve as a resource for commercial financing needs, please visit https://fordpro.com/en-us/financing/?bannerid=MAT_release_fin_CLOC.
Source: BPT
