Shopping for a new vehicle or vehicles for your HVACR business is an important step in keeping your business healthy and profitable. As with any major purchase, smart shopping techniques and good research are the key to making a good decision. Factors to consider when shopping for new vehicles for your business include considerations such as the vehicle’s job duties, its efficiency, life-cycle costs and how long you intend to keep it.
The first question’s that needs to be addressed is how are you going to use the truck, your specific needs and requirements. The standard questions start with your typical job description. Are you primarily involved in single-family home repairs and replacements or are do you specialize in large new construction projects? The bigger the projects you are primarily involved in, the bigger the vehicle you will need. What type of area do you operate in? Do you operate in a metropolitan area or do you perform most of your jobs in a rural area that is spread out over many square miles. If all your business is performed within a short distance of your base, it could mean you should select a different truck than if you more routinely do long trips to the work sites.
Rule number one in all cases is do not skimp on size or payload. Packing your truck to the doors or loading it within a few pounds of its capacity all the time is a bad idea. It will cause you and your crew to be less efficient on the job and the truck’s systems and components will wear out and start failing much sooner. Allow for growth in both capacity and load carrying ability. The GVWR (Gross Vehicle Weight Rating) is all-important. The GVWR accounts for the entire weight of the vehicle including the vehicle itself, passengers, equipment, tools, etc. If you add a bunch of shelving, racks and such, you can very quickly eat up all the vehicle payload capacity.
The load-carrying capacity also applied to the crew. Think about how many bodies will be on the crew on average. If you send out a crew of two most of the time, it will not be much of an issue, but if you need to send four frequently, it might cause you to have to send an additional vehicle. Most manufacturers offer extended and crew cab trucks that allow carrying up to six passengers to eliminate this problem.
Obviously, price will always be a priority but don’t let the window sticker be the end all point in your decision. Numerous factors must be considered to determine the vehicle’s true life-cycle costs. You should consult your financial and/or business advisors on the details of how much to spend and how to spend it. They should be able to explain the financial advantages and disadvantages of various purchase choices including business expenses, tax advantages and whether you should buy or lease.
Leasing can offer a host of advantages over purchasing. These include lower up-front costs, lower monthly payments, numerous tax advantages and a guaranteed lease-end value. The dealership should also be a wealth of good information. Shop around, talk to at least three or four dealers and select one that you feel is interested in you and your business. A commercial vehicle dealer is faced with a completely different task than a regular retail automobile dealership. The dealership should be able to fill you in on the exact specifications of the vehicles they offer, including warranty choices, roadside assistance details and service and maintenance. Talk to the service department staff if you plan to have that dealer perform routine the vehicles routine maintenance. Once you have purchased the truck the service manager and his staff will likely be your most common contact and thereby very important.
Once you have the required capacity, load-carrying ability and the money end of the decision pretty much settled, you need to select what type of vehicle you want and need. The three basic choices for the HVACR business operator are the pickup truck, van and finally the commercial truck. Each has its share of attributes as well as negatives.
The classic work vehicle the pickup truck continues to be a very popular choice and rightly so. Available in a large variety of styles, shapes and payload capacities the pickup is the perfect answer for any number of HVACR job applications. One of the pickup’s greatest attributes is that it also offers numerous cargo options, including the standard pickup bed, the standard bed equipped with lockable toolboxes and a ladder rack, a cargo bed shell or a specialty utility service bed. While the utility bed option will be more costly initially than the other options but keep in mind that the utility bed can be transferred from truck to truck and can last three, four or more truck life cycles thereby reducing overall expense. Numerous manufacturers such as HIVCO, an L.A. based manufacturer offers a service body package designed specifically for the HVACR trade.
The van is another excellent choice for the small and medium based business. Offered in both mini and full-size models the van comes standard with good load capacity and good security. General Motors makes the only rear wheel drive mini van, the Chevrolet Astro and the GMC Safari but various manufacturers offer front wheel drive models that will work nicely for light duty applications. All three major manufacturers offer excellent full size van models. Virtually all commercial dealers offer interior equipment packages, and when equipped with roof and side racks, the van can serve the needs of a large percentage of HVACR business operators very well.
If your business requires you to haul very large loads on a routine basis, then a step van or Low Cab Forward (LCF) might be the best choice. Both the step van and the LCF truck offer vastly superior payload capacity than either the pickup or standard van. More expensive initially, they are becoming more and more popular in all avenues of business. Available in a wide variety of payload, wheelbase and overall sizes, both the step van and the LCF truck these vehicles are your best choice if your business requires a true heavy-duty truck. Once you have decided which type of vehicle, you need to decide on power choice. As a rule of thumb, unless you have a distinct feeling either way, if you expect the truck to log less than 30,000 miles a year, go with the gasoline engine. If the truck will clear more than 30,000 miles annually, think about the diesel. More expensive initially, the diesel will provide better fuel mileage and will cost you less over the long run.
Finally, don’t rule out a used vehicle. Low-mileage units of all three choices are readily available on the used vehicle market. They can be had with extended warranty protection, service plans and can even be leased in some cases. Done with a little thought and solid decisions, your new vehicle or vehicles will serve you long, faithfully, and at the lowest possible costs.
Business Capital Solutions In Canada: Accessing Proper Cash Flow & Commercial Financing
Business capital requirements in Canada often boil down to some basic truths the business owner/financial mgr/entrepreneur needs to address when it comes to financing for businesses.
One of those truths? Knowing the true state of their financial condition and what financing they do and don’t qualify for when it comes to meeting commercial lending requirements in Canadian business.
Business Loans In Canada
Whether you are smaller or start-up firm looking for information on how to get a business loan or a larger established firm looking for growth financing or acquisition opportunities we’re highlighting 3 mistakes that commercial loan seekers like your company need to avoid making when addressing, sourcing and negotiating your cash flow / working capital and commercial financing needs.
1. Understand the true condition of your company finances – These are almost always successful addressed when you spend time on your financials and understand how your financial statements reflect your access to commercial loans & business credit in general
2. Ensure you have a plan in place for sales growth and financial needs as it relates to commercial financing
3. Understand that actual hard facts about cash flow which is, of course, the lifeblood of your company
Can you honestly answer or feel positive about all those 3 points. If so, pass Go and collect $ 100.00!
A good way to address your company’s finance plans is to ensure you understand growth finance solutions, as well as how to manage in a downturn – i.e. not growing, losing money, etc; It’s never fun to fund yourself in an economic or industry downturn such as the COVID pandemic of 2020!
When we talk to clients of new or established businesses it seems they are almost always talking about sales, so the ability to understand and focus on the differences in their profits and cash fluctuations is key.
How do cash flow and sales plans and projections affect the type of financing you require? For one thing sales growth usually starts out by consuming your cash, not generating it. A poor finance plan will drag your business down and addressing financing simply gets tougher and tougher.
Three basics always emerge when it comes to your search for the right business capital and financing.
1. The amount of financing you need
2. The type of financing (debt/cash flow/asset monetization) The business loan interest rate will be dramatically affected by whether you choose traditional or alternative financing solutions. Private business loans in Canada come from non regulated commercial finance companies most often known as ‘ alternative lenders ‘. These lenders are typically highly specialized in one ‘ niche ‘ of business financing and may be Canadian firms or branches of U.S. banks and non-bank lenders
3. How the financing is structured to be manageable with your day to day operations
What Finance Company In Canada Can Meet Your Borrowing Needs & Why Is Capital Important In Business
Let’s identify and break down key financings your firm should know about and understand if they are applicable and achievable to your business. They include:
A/R Financing / Factoring / Confidential Receivable Finance
Inventory finance / floor planning / retail inventory
Working Capital term loans
Unsecured cash flow loans
Merchant working capital loans/advances – these loans are geared toward short term cash needs and are typically one year in duration. Loan amounts are typically 15-20% of your annual sales revenues.
Asset based non bank business lines of credit
Tax credit financing (SR&ED bridge loans)
Equipment Leasing / Sale leasebacks – Equipment financing in Canada is used by almost 80% of all companies looking to acquire new, and used, assets.
Govt Guaranteed Small Business Loan program – Government Loans in Canada are sometimes referred to as ‘ SBL’, aka Note: BDC Finance solutions are available from this Canadian non-bricks and morter crown corporation. A small business loan via the government-guaranteed loan program comes with true flexibility around term loan duration, market rates, no pre payment penalties, and of course the low personal guarantee that is required by borrowers. These two ‘ government ‘ loan solutions are often perfect for financing a new business.
If you’re focused on not making mistakes in your business finance needs and want to capitalize on the solutions your competitors are probably already using seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your cash flow and commercial financing needs.
Stan has had a successful career with some of the world’s largest and most successful corporations.
His employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) In 2004 Stan founded 7 PARK AVENUE FINANCIAL – He is an expert in Canadian Business Financing.
Stan’s Business Financing articles are published on a number of internet sites and his Blog mixes Business Financing information with his comments on Canadian business