As the owner of a small business, your top priority is generally managing your expenses – and maximizing your profits.
Providing a company car for your employees may seem like a big expense that has no immediate impact on your profit margin, but commercial accountants and consultants are always keen to point out the hidden benefits of having a company car in a small business.
These are the key points.
Increasing Productivity
One of the biggest plus points of providing company cars is the increase in productivity it can bring. If you or your employees travel frequently as part of the work you do, a car is obviously going to make that quicker and easier. Relying on private cars can be more unreliable and time-wasting. Public transport can be even worse. A smart company car can ensure you or your staff members will arrive promptly and work in a more time-effective way.
Professional Image
Company cars boost the image of any business. Your own car may be fine for personal use but is it really smart and new enough to make an impression? Meetings with clients can be very important. Your small operation will look more professional and impressive if you or your employees turn up in new company cars.
A car will show your business is well established and well funded. You will appear to take your business seriously. Company vehicles with business logos or slogans can also act as mobile advertising. This works in some industries – but not all. In fact, a solicitor or doctor with a slogan on their car might seem rather unprofessional.
Staff Retention
Providing company cars is a major way of increasing staff retention. It’s a valuable perk that can increase employee satisfaction. That means more loyalty to your small business and less staff turnover to deal with.
Safety
Company cars will be better maintained and newer than most personal cars. That makes them safer. Even details like having cars regularly serviced and with good quality tires will reduce the risks for you and your staff.
Financially, don’t forget there are service plans for company cars that can reduce costs. Likewise, there are ingenious and advantageous ways of finding the best tire finance for you and your business.
If your business requires long trips, providing cars will reduce the risks of accidents or breakdowns.
Tax Benefits
Depending on the tax structure of your business, the cost of company vehicles including fuel, maintenance, and insurance can be offset against tax. It can get more complex if company vehicles are used by owners for personal mileage.
You should always consult your financial advisor, but in many cases the taxation benefit on the company car can be better for the business than providing a personal car allowance.
Cost Savings
If you or your staff use personal cars for business, there will have to be a system of reimbursing for fuel and costs. This can actually be higher than the costs of running a company car.
The more company cars you run, the greater the savings – because of the economies of scale that become possible.
Flexibility
Having company cars for your use can increase the flexibility of any small business. You will be able to schedule meetings and appointments more effectively with more reliable transport.
Choosing cars or vans with increased luggage space also means you and your staff will be able to transport materials and samples to meetings.
In Conclusion
Negative points of having company cars are obvious: they are a large expense, particularly for any business with a small turnover.
Business consultants often point out the benefits usually outweigh the costs though. Company cars can bring increased productivity, professionalism, employee satisfaction and loyalty, tax benefits and savings, and greater safety and flexibility.
Every business is different however. With any business decision, always consider the balance between costs and benefits carefully.
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