Business news and advise

There are only two ways to improve margins; you either charge more or you spend less on production.

In today’s tough economic climate, the former just isn’t a realistic option for most business enterprises, so everyone is busy cutting costs in an attempt to stay competitive. But some of the most obvious cost-cutting measures are very often not taken by small businesses as they’re seen as too trifling.

Cutting down on expenses like meals and hotels, or even the small things like stationery items can make a real cumulative difference. Depending on the type of business you’re in – just the smallest cut in costs can often enable you to cut sale costs by tiny amounts which make a huge difference to sales. When all other factors are held equal, price is the only important variable. And in today’s lean times, buyers are looking at price before other factors more than ever before.

Fuel costs can also be a big potential area to make easy savings. If yours is a high mileage business, then driving so as to conserve fuel and ensuring that all staff do the same can make a real difference. Anticipating congestion and timing your journey accordingly or taking another route can help.

Then if you do find yourself in a traffic jam, turn off the engine. Even if the car will be stationary for 10 seconds or more, this has been shown to be worthwhile. And always try and drive at the optimal speed. This was always thought to be 55 mph, but it’s recently been suggested that 40 mph is better for fuel economy. In short, driving more steadily and slowly and planning journeys better will save money on fuel and wear and tear. Vehicle costs are often one of the single biggest costs for small businesses.

Or, if you need to invest in new vehicles, a little up-front investment in hybrids or other fuel-efficient vehicles can make a real difference to on-going costs.

Do your research here, too. For example, Honda has been shown to be the most reliable car on the UK’s roads according to a recent “What Car?” survey.

If your business has any vehicles owned or leased by the business, it’s important to maintain them well and regularly, along with keeping accurate records.  It helps protect those employees that use the vehicles, and it’s useful to keep full records in case of any accidents or legal claims.

The following tips will help you keep your fleet – and drivers – in top form.

Safety inspections

Train your drivers to carry out visual inspections on the vehicles they use, once a week.  They should note down and report any defects.  Log these driver records on the fleet file.

Make sure that the cars are booked in for regular safety inspections by a qualified mechanic.  As well as visually checking the car on a weekly basis, a mechanical check every quarter or every six months can give you an early heads up on any mechanical problems that the driver may not have picked up on.  Don’t just wait for the MOT – which only does enough checks to confirm the vehicle is roadworthy at the time of the test.

Don’t delay on fixing problems

Remind drivers to let the person responsible for fleet management about any problems as soon as they become aware of them. Get problems fixed as soon as possible, and keep a record of when any defects were put right. An invoice from the repairer or a specific repair report kept on the computer system will suffice.

Diary dates

Make sure you plan in any important dates for the fleet of vehicles. These include insurance renewal dates, MOTs, and tax documents.  It’s important that one person has overall responsibility for this, but ask drivers to be vigilant in looking after the vehicle that they drive and providing copies of all necessary documentation.

Find the best value

Make sure that any lease contracts are kept up to date, and look into cost savings. Hybrid cars can save money on fuel costs and as they are low emission cars, this can have tax benefits for the company, too.

Driver training

Remind drivers of business policies for driving – on things like mobile phone use, driving hours, weight restrictions and accident procedures. Keep a record of these training sessions. Make sure drivers have valid licences and they have not accrued any driving convictions.

Be organised

Have all records to hand if and when you need them, for example, in case of an accident.

Increasingly, companies in the UK have started to adopt hybrid cars as their fleet vehicles.  It makes a lot of sense. Firstly, hybrids offer great fuel economy compared to conventional cars.  Secondly, they also have low emissions, so it’s advantageous for the company’s green sustainability credentials.
Choosing a greener company car fleet makes financial sense for fuel economy but also helps to build staff morale as green issues become ever more relevant in today’s society.
With their forward-thinking green attitude, Ikea was one of the first companies in the UK to adopt hybrid cars for their company car fleet back in the UK, back in 2007.  The Swedish furniture chain started off with 50 Honda Civic Hybrids, replacing half of their 100 company fleet cars in 2007 and the other half in 2008.
The Honda Civic Hybrids can average 61.4 miles per gallon and produce carbon dioxide emissions of 109g/km. Driving hybrids also means a much reduced road tax fee for a company car fleet.
Sainsbury followed suit when they recently agreed a car fleet arrangement with Toyota. The supermarket will have 400 Toyota Prius models for its staff to use.
The Prius is probably one of the best known hybrid cars in the UK.  It has a conventional petrol engine plus an electric motor.  Its official combined fuel consumption figure is 65.7 miles per gallon and it can run on electric alone while in slow moving traffic.  Its carbon dioxide emissions are 104g/km and it has zero particulate emissions.  As a low emissions car, the Prius is exempt from the London Congestion Charge.
It’s inevitable that more companies will adopt hybrid cars as their fleet car of choice, as they are far more economical to run and help to reduce a company’s carbon dioxide emissions.