There is no shortage of start-up business advice out there that is
anti-travel. We’re told to work online and use technology to bridge all
kinds of gaps in our operation.
While this is sound advice for keeping costs down, there are still
limits to what many businesses can achieve without travelling anywhere.
If you cannot travel, you may be unable to deliver your product or meet
your customers and suppliers, to build relationships and grow.
Transport is an inevitable expense for many businesses, but if you
want or need to use a vehicle (or vehicles), you’re going to have to
spend a lot of money up front, and factor in the depreciation of the
asset into your ongoing operation.
This inevitably involves compromise: you’ll opt for the cheapest van
you can run or scale back your aspirations elsewhere to afford a nicer
car.
Lease is more
Getting a loan to pay for your vehicle is risky. You might stand to
lose more than the car if you fail in your repayments. Unless your
business has the cash in its account, you may be looking at dealer
finance, and paying absurd total repayable amounts in the long term,
with a large deposit and monthly payment in the short term. Thankfully,
there is an alternative.
Vehicle leasing allows you to pay only for the years you use. Take
out a two, three or four-year lease on a brand new vehicle and you’ll
pay a low deposit with low monthly payments to follow. You might even
get road tax and breakdown recovery as part of the package. Lower
monthly costs will obviously appeal to start-ups, allowing them to
afford to run new vehicles that take up less space on the balance sheet –
vehicles that cost less in terms of liability and risk.
Leasing does mean that you won’t own the car or van that you drive,
of course, but many businesses may find that this is a positive. Leasing
companies are left to worry about the vehicle’s depreciation, so it
never becomes a factor in the valuation of your business. You can even
opt for plans that give you the option of purchasing the vehicle at the
end of your lease period. Otherwise, as a more mature business you will
be free to continue saving with leasing, or to purchase a new vehicle
outright, if that fits your financial plan.
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