Inflation and gas prices haven’t just affected American families; they’ve also caused various problems for small businesses, particularly those with fleets. The costs of purchasing, operating, and maintaining company vehicles have skyrocketed, causing significant financial strain. With smaller budgets than larger competitors, entrepreneurs feel their only options are to take out loans and incur more debt or increase the cost of goods and services.
As you might imagine, either of these choices could have lasting effects on a small business’s success. Taking out a loan may provide temporary relief; however if sales decline, the chances of defaulting on the loan increase. Similarly, raising the cost of goods and services could cause consumers to look for alternatives. While implementing these strategies may be necessary to remain afloat, there is another option – reduce fleet management costs.
Reduce Your Fleet
Depending on the vehicles in your fleet, average ownership costs can be $5,000 a year or more. Reducing the number of cars or trucks in your fleet can save you thousands of dollars. Selling a few vehicles can increase your budget, increasing your ability to cover other business expenses.
Fleet Fuel Cards
As fuel costs rise, opting to fill the tank at more affordable stations is essential to saving money. However, that’s not all small businesses can do to keep fleet fuel costs under control. Another option is to consider fleet fuel cards. Companies can distribute these cards to drivers to cover the cost of gas.
A fuel card eliminates the complicated process of tracking gas purchases and reimbursing employees. Most business fuel cards also bring money-saving benefits like zero fees, discounts at the pump, or fleet management costs such as maintenance and repairs.
Tighten Up Mileage Tracking
Reducing mileage has multiple benefits for company fleets. The fewer miles drivers put on cars, the less money is spent on fuel. It also minimizes vehicle wear and tear, resulting in lower maintenance and repair costs. However, not all small businesses monitor mileage efficiently, increasing operating expenses.
Navigational systems, logbooks, vehicle trackers, and mileage tracking software can help small businesses stay on top of mileage. Tracking mileage can help business owners identify areas of concern, streamline operations, and save money. For instance, you may learn that drivers make too many personal stops or take unnecessary routes that increase mileage. Upon discovery, fleet managers can restrict personal stops and map more efficient routes.
Keep Up With Maintenance
Paying for oil changes, tire rotations, brake pads, and other general maintenance is a lot harder for small businesses with fleets. While these expenses are reasonably affordable for one vehicle, keeping up with those costs for a fleet is challenging. Be that as it may, avoiding maintenance on company cars can result in more financial trouble down the road. It increases the need for costly repairs and shortens vehicle lifespan.
Shop around for affordable mechanics to service your fleet. As you own multiple vehicles, mechanics are more inclined to offer you a deal for repeat business. You should also take advantage of vehicle warranties as many maintenance and repairs are covered for the first few years.
As you make changes to company policies and operations, it is imperative to train your employees. Efficient training ensures that your drivers are familiar with new procedures and systems. Educate your drivers on fuel-saving methods like driving the speed limit, reducing unnecessary stops, selecting the most efficient routes, and filling the tank at the most affordable gas stations. If you’ve implemented new software or devices, train your team on how to use them to reduce frustrations or slow productivity.
In the face of economically challenging times, small businesses struggle to stay in the competition. As expenses increase, some fleet owners are pressured to consider options that could hinder their company’s success. Before considering such options, use the tips above to reduce fleet management costs. They could eliminate or reduce the need to borrow money or increase rates, enabling you to continue providing quality goods and services to your customers.