Managing any form of venture is not an easy task at all. However, in some industries the task becomes even more difficult because of the peculiar nature of the business. One of such industries is the commercial vehicle rental business. This is one of the emerging industries. It has emerged from the supply chain and logistics management and is relatively considered to be a young industry compared to the likes of the manufacturing and financial industries. It emerged as a result of the need for logistics companies’ to reduce cost through outsourcing.
The management of a commercial vehicle company involves many aspects of business, finance, administration, maintenance, among other things. In most of these areas, there are number of problems.
The first vital challenge for most companies is one of capital. The business is a very capital intensive one. One of their most important assets is the trucks they rent out to other companies. This will usually appear in the current accounts on their balance. The ability to manage this aspect of the balance sheet will hugely contribute to the success or failure of the company. Again, because most of the revenue will come through this area of the business, a good grasp of the issues here will help the company grow in the right direction.
From the financial point of view, some of the key areas to keep an eye on include the areas of depreciation cost, interest rates and salaries. The trucks will depreciate after a period of usage and this has cost implications for the business. More than likely, most of the trucks will be purchased based on a payment agreement through a financial institution. The ability to make the right decisions in this aspect is very crucial. Additionally, salaries will be one your biggest expenses for any commercial vehicle rental company.
When it comes to administration, keeping accurate records on your inventory of vehicles and their condition should be on top of your agenda. This will ensure that all vehicles are properly taken care of. Also, the administration should coordinate all aspects of rentals, payments, insurance, security and maintenance aspects of the business. This will require dedicated and well-organized staff members to get things done effectively and efficiently.
The issue of maintenance will be closely linked with administration and will have direct impact on the cost implications of depreciation. This should be managed efficiently to ensure that vehicles are available when they are needed for the transportation of goods and services.
With these aspects taken care of properly, most commercial vehicle rental companies should be able to grow successful businesses.