Running your own business requires a lot of planning and financial investment. Many people who start their own company have to prioritize the purchases they make for the business based on their current budget and anticipated income. One of the consequences of that financial prioritization is that early staff in a small business often have to wear multiple hats and perform a wide range of tasks. Another is that the company made you without necessary resources and supplies initially.
For many companies, one of most deferred purchases is a company car. Waiting to buy a car makes sense, because vehicles cost quite a bit of money. There’s also the expense of insurance and the risk of employees causing a crash that results in business liability. However, depending on the nature of your business, a company vehicle may actually end up saving you money, to say nothing of the tax write-off of the purchase. How can you determine if it is time for your company to invest in its own vehicle?
Explore Your Workflow to See If You Need a Vehicle
The most pressing concerns you need to consider, other than your current finances, will be the workflow of your business. If you routinely need to make house calls or deliveries or if representatives from your company travel throughout the country, a company vehicle may be more affordable than rentals or reimbursing workers for using their personal vehicles, which has its own set of issues, including that of potential liability. This may be true even if you operate out of a virtual office.
Has your company experienced any issues where they were delayed and fulfilling work or delivering products to customers because of issues with arranging for a rental vehicle or third-party transportation? Is the answer is yes, then investing in a vehicle is likely smart. Similarly, if your company does a lot of traveling during the second and third shifts, when there are fewer rideshare options or taxis available, it may be time to consider purchasing a vehicle for your company.
Financial Concerns Are A Major Consideration, Too
Of course, no matter how much your company needs a vehicle, you have to look at the financial circumstances of the business as well. Ideally, you can wait to purchase a vehicle until your company is in the proverbial black. That way, the cost of the vehicle can be written off against the business income for the year.
The purchase of a vehicle will then benefit your company practically, as well as financially by reducing your tax obligations. Of course, you will also have to pay for registration, licensing, and insurance, which can quickly add up. You may also feel the need to invest in a more expensive vehicle, because it will publicly represent your company.
Many companies benefit from the use of a business vehicle. However, you need to be certain that your company can afford the vehicle and that the nature of your business and warrants the creation of a company fleet.