- April 18, 2019
- Posted by: admin
- Category: Accounting Advice
PCO Business Fleet: Are you managing your team and making the right choices? Aside from your PCO workforce, the most important resource you possess is your fleet of trucks. It is important that your trucks are not only operating well, but also look clean and kept. Since many of your clients will never see your office, your trucks become the physical embodiment of your business in their eyes. Keep it Clean!
In addition to your company’s image, keeping your trucks well maintained will ensure that your technicians stay on the road and productive. But, make sure you not only keep your trucks maintained and operating well. Also be sure they are clean and presentable. This will increase the perceived quality of the service. Now, don’t mistake a clean truck for quality service. Your technicians still have to deliver great service and great value. Yet, appearances are significant and should not be overlooked.
Now it’s great to say that you want your trucks clean, but someone has to KEEP them clean. Leave that responsibility to the technicians that drive around in the trucks on a daily basis. Inspect their vehicles periodically. Perform regular inspections and tie the results to their performance evaluation. Reward those that get the highest marks consistently.
Grow Your PCO Business Fleet in Minutes!
In many ways, your trucks and their collective appearance enable you to paint your own picture and shape the perception that you want your customers to have of you. For example, if you want to seem like a larger company to your customers (or to your competition), then number your trucks out of sequence.
For instance, let’s say you have three trucks, but want those three trucks to seem like a fleet of a hundred trucks. Well, print a number on the side each truck. Number your trucks #154, #214, or whatever your favorite number may be. You could also put a different number on each side of the truck. Who’s really going to do a walk-around to see if the numbers match? People will see a different number every time their pest control service is performed and you have instantly grown the perception of your company to a fleet of hundreds!
PCO Business Fleet: Outsource Your Trucks
I’ve told you a lot about the importance of your trucks. One way to afford a fleet of trucks (or even just one) is to lease them. A leasing company will also help you manage the costs of maintenance and repairs. Most leasing companies have programs where they track the miles and let you know when you need an oil change or a break job.
Prior to anchoring yourself into a multi-year financial obligation, you need to understand how they work. Let’s explore this topic.
PCO Business Fleet: Open-Ended Lease Example
Open-ended leases are great for this purpose. Let’s say a truck costs $25,000 and you wish to lease it over a span of 3 years. The company will assign a value of what they think the truck will cost at the end of the lease. Let’s say the value in 3 years is $10,000.
Next the leasing company will take the difference between the cost and the 3-year expected value. In this case, it’s $15,000. Then they will write a note payable that you pay every month and they tack on some interest. So, depending on the interest charged, your monthly payment might be around $400 or $500. And that’s your cost for leasing the truck every month.
So what happens after the three years is up? You have to give the vehicle back and the leasing company sells the truck. If it sells for more than $10,000, they write you a check for the difference. If they sell it for less than $10,000, then you have to write them a check for the difference going the other way.
There are also two other options here. You can purchase the truck for $10,000 or if you don’t want to turn the vehicle in, you can continue to lease it. You can even take the value all the way down to $0. Then, your monthly payment becomes about $5 per month, which is the administrative cost.
So, the reason you do open-ended leases is so you don’t have to guess at anything but the ending value. It’s easy and it’s predictable. And predictability when running your business is a good thing, since it reduces the amount of risk you take on. Learn more PCO Strategies!