How vehicle costs are proving expensive for SMEs
Keeping company vehicles on the road is costing small businesses in the UK considerable sums of money, according to new research from RAC Business.
One in five firms is spending upwards of £2,000 on every car in their fleet each year, while the national average is around £1,700.
This covers maintenance and any other costs which may be incurred, although regional variation saw firms in some areas paying much more than others.
Scottish companies were repaying up to £4,000 on their vehicles at the highest end of the scale while at the opposite end, those in the East Midlands were spending between £1,000 and £1,500.
These high costs mean many small businesses that require vehicles to operate were noting financial challenges including cash flow issues and unaffordable running costs.
Looking into different vehicle types to identify some which are more suitable for business or which have better fuel efficiency is one way of cutting costs.
Alternatively, ensuring that vehicles are regularly serviced and maintained should help to bring costs down in the long-term.
Given the recovering state of the economy, many business owners are trying to keep unnecessary costs down so spending on vehicles is not always a priority.
Streamlining a company using business restructuring methods can aid with this cost cutting while implementing improvements across the company as a whole.
As far as vehicles are concerned, leasing vehicles may be a more financially astute tactic, as servicing and breakdown costs could be included in the package.
Other services may also be incorporated in agreements of this type, enabling a company to free up funds for other aspects of work.
Planning in advance means costs amounting to thousands of pounds every year could be reduced and it should also alleviate any pressure being placed on cash flows.
This should increase the likelihood of a business noting success, as well as providing a platform from which to expand.
By Phil Smith