There are many types of fleet-based businesses today. Some of the more popular today include a vehicle rental business, a shipping line enterprise, and a public transport business. In these times, it pays to have a business, and a fleet-based one may provide a lucrative source of income to anyone. But how much does it cost to start a fleet-based business? Here's a short guide to know how much it costs to start a fleet-based business.
Step 1: Consider The Type of Fleet-based Business
Deciding what kind of fleet-based business is key in knowing how much to pay. The key to this is research. Expert opinion suggests that finding out what type of vehicles are best suited for the chosen type of fleet-based business is a good start. Understanding what fleet-based business is most in demand in the chosen market can also be handy. For a taxi vehicle rental, it will cost around $10,000 to $20,000 to own one vehicle, and charges increase per vehicle when purchasing many. Those interested in the business can also research, say, the tax deductions one can avail of when running the business, along with other essential information.
Step 2: Operation Style Costs
There are mainly two styles of operation in any fleet business. The first one is a contract-hire type, while the second one is a daily hire. The contract hire is typically when businesses lease their vehicles for a set time, while the daily hire is when customers hire the vehicles for a shorter period than the contract hire. Both styles have their strengths and weaknesses, and their costs will depend on how much money the businessman is willing to invest, the number of investors in the enterprise and the ability of the fleet operator to cater to repairs. Gas and other costs, like washing and waxing the cars, should also be covered in the calculation, along with cosmetic and mechanical maintenance and repairs during operation.
Step 3: Location and Licensing Costs
Data reports from independent analyst Berg Insight suggests that the cost of any fleet-based business can sometimes hugely depend on the location. Finding out all the necessary data about your competition is also useful for the business to gauge how much budget needed when it comes to developing a unique marketing strategy. It's important for the fleet-based business to differentiate itself from the competition, and knowing the location helps find answers to the costs of running the business because taxes, permits, and licensing costs vary across locations.
Step 4: Security Costs
There's nothing more important in running the fleet than making sure it is secure and fully insured. Security in the form of putting CCTV cameras in the terminals of the taxis, for example, can go a long way in making sure the operation runs smoothly. This will cost about $100+ for each vehicle. It's also not a bad idea to equip the business with an internet-ready security system, where all the fleets are tracked and followed through mobile devices. The costs of these vary among service providers, but the best way to get a price for this is by reading up on authority sites online and comparing them.
Step 5: Insurance Costs
The key to securing quality insurance costs for the fleet business is by getting a reliable auto insurance firm to handle it for the investors. It's worth looking around online to get a gauge on how much is the insurance package from different firms. Big companies like Towergate Insurance can even offer a "pay as you go" package solution that allows the businesses with greater flexibility.All insurance costs will depend on the number of fleets and medical insurances of its drivers, and the best way to calculate the costs is by getting a trusted accountant to help you.