Growing your business is hard work, but the odds of long-term success are improving — only 30% of new businesses fail within the first two years, while 50% survive five or more years. Investing in a company car can be a smart move for business growth.
It can boost productivity, strengthen your brand image, and impress clients and customers. However, it’s important you’re sure it’s the right decision for you at this time and that you choose the right car for your specific business.
Do you need it?
If you often use your car for work-related activities, investing in a company car is a sensible next step. For example, if you regularly drive to meet clients, make deliveries or transport equipment, purchasing a larger car or van can end up boosting productivity.
Additionally, newer vehicle models typically come with helpful technological features that also positively impact work performance. A company car with wifi connection and the capability for hands-free calls, emails, and text messages, for example, can make you and your employees more easily reachable while on the road.
In turn, communication and efficiency are improved. Newer vehicles also usually include safety features to minimize the risk of accidents.
Can you afford it?
82% of small businesses fail because of poor cash flow management. Before investing in a car, you, therefore, need to be completely sure you have enough money to buy or lease it.
Keep in mind the initial down payment, insurance, and tax payments will likely total the low four-figure range. Any money you put towards that means you have less to spend on future expenses, including payroll, essential equipment, or emergency payments.
It’s also important to not take out an expensive long-term loan, which can stunt your financial flexibility well into the future. You’ll also have to budget for ongoing payments, including routine maintenance, fuel, insurance, and storage.
Fortunately, tax benefits can allow you to deduct a number of associated costs like fuel and maintenance. Discuss this issue with your tax advisor, who can advise on your specific situation.
Choosing the right vehicle
When it comes to choosing a vehicle, the image shouldn’t be underestimated. Driving the right car presents a positive image to existing clients and customers, as well as general members of the public.
Your business vehicle should essentially be considered another method of advertising; it should present a good impression and therefore help open up future business opportunities. Just think — a shabby or outdated car doesn’t exactly inspire confidence.
Consult expert car shopping guides to learn about the most luxurious and reliable cars currently on the market. Specifically, you should look for a car that reflects your company values. For example, purchasing an electric vehicle demonstrates care for the environment, which may impress your specific clientele.
Growing your business is no easy feat. However, investing in the right company car at the right time can ultimately help improve your bottom line. A stylish business vehicle can impress the right people, strengthen your brand image, and boost productivity.