One study estimated the “average cost of starting a new business from scratch at just over $30,000.” Additionally, research has found that the “average small business invests about 1 percent of its revenues into advertising.” It’s obvious that starting and running a small business is not cheap.
Many small business owners are forced to make important decisions on essential spending each and every day. Every dollar saved can help a business stay afloat, especially if it is a newer small business. When faced with making a larger purchase, there usually has to be many significant advantages in making the purchase.
Often times, one major item that many small business owners are unsure about purchasing is a company vehicle. Across industries, vehicles of all kinds (cars, trucks, vans, and SUVs) have the power of bringing massive benefits to business owners and organizations alike. Explore the top advantages of owning a company vehicle to see if it’s the right choice for you.
Cut shipping costs by offering local delivery
The latest figures show that the “average small business currently spends about $338 per month with the Postal Service for postage or somewhat over $4,000 per year.” If you find yourself shipping items locally on a frequent basis, then buying a large van, truck, or SUV could be paid for in postage fees alone.
Small businesses that deliver food, appliances, or other heavy goods could ultimately save money with the purchase of a company vehicle. Aside from the monetary benefits, local delivery can also enhance corporate and customer relationships with personalized service.
As many business owners already know, owning a company vehicle comes with major tax benefits. What are some of the things that you can deduct specifically?
Mileage driven for business expenses is one major deduction. The rule states that “the IRS allows employees and self-employed individuals to use a standard mileage rate, which for 2017 business driving is 53.5 cents per mile.” Tax experts also state that you can “deduct interest on an auto loan, registration and property tax fees, and parking and tolls in addition to the standard mileage rate deduction, as long as you can prove that they are business expenses.”
Prior to buying a vehicle, you will want to be sure to check with your tax professional to ensure that these deductions and credits will apply to your situation.
Make it easier for employees to get tasks done
Want to make it even easier for your dedicated team to tackle the tasks needed to keep your small business running? From stops to the grocery store, the fabric store, the post office, and everywhere in between, you and your staff likely have to run many errands every day.
If you are finding it challenging to get things accomplished due to transportation limitations, having a designated company vehicle can make it simple for all members of your team to quickly accomplish tasks big and small.
When it comes to the question, “does my small business need a vehicle?” there’s no one-size-fits-all answer. Instead, by considering the pros and cons that are specific to your business (including shipping and delivery costs, tax deductions, and staff transportation), you can feel confident in your final decision.