What to consider when starting a new fleet company

Graham Wood 11/01/2019 Vehicle Management

Starting any company is exciting, but what about a fleet company? Let’s just say you’re in for the ride of your life (pun intended).

You may have a solid idea of what kind of fleet company you are planning on setting up, or you may not. No problem. Our aim is to try and sum up all the things that you should take into consideration when setting up any new fleet company.

Because you never know. No matter how well-organised you are, and how much homework you have done, there may still be a few things you haven’t thought of. And that’s where we can help.

Actually we at Veturilo can do a lot in that department, especially when it comes to an affordable, easy-to-use fleet management solution for small to medium-sized businesses. That’s a shameless plug I know, but we’ll come back to the details later.

Setting up a fleet company: an introduction

The things you will need to consider when setting up a fleet company will depend on the type of business you’re going to start or found. For example the size and type of vehicles if it’s for service or delivery businesses, or if it’s a vehicle rental service.

But, apart from the services you offer, the business you’re in also defines the number and the type of vehicles (i.e. whether they are passenger-type vehicles or transport), as well as the processes you’ll establish.

So, here are some key things you need to consider when starting a new fleet company

Financial plan/strategy

First of all, you’ll need to create a financial plan on how you’re going to manage all of your expenses. And this must start from the initial start-up costs and cover the daily expenses (repetitive costs). Be optimistic above all, but keep in mind that it takes some time to settle down and be profitable. So start realistic and try to optimize as much as possible and bootstrap where you can.

Legal issues

Chances are - depending on the industry and business - you will need to apply for the appropriate license. And the license you may need can vary from country to country, as well as state to state when we’re talking about the United States. For the US, you can check here for more information.

There's more!

Apart from those first two, let’s say, foundational factors, there’s also the processes, services and tasks that might worry you. At least in the beginning, such as registering your vehicles (new vehicle titling, permanent fleet registration, renewals and more). Your first port of call should be to take care of your fleet’s registration.

For the US, depending on your state, you can consult the respective service from the Department of Motor Vehicles for detailed information. Then, after you have registered your fleet company, your next steps, in general, are the following:

Hiring

Hire and register your drivers. Make sure you get yourself some good, experienced drivers - and hang on to them!

Vehicles

Purchasing or replacing vehicles. Your success of your fleet company depends largely on your vehicles. There may be some tough decisions to be made in terms of your strategy. For example, how many? And, if you buy new vehicles, lease them, or go for used fleet vehicles. You’ll need to do your homework and see which suits your particular situation.

Insurance

You have to make sure that all of your vehicles are properly insured. And, as for the expenses, these payments will need to be included in your initial budget. If you want to reduce the total cost you can opt for self-insurance ahead of comprehensive coverage (that helps you repair or replace your car if it’s stolen). So, be sure to carry out proper research in order to find out which insurance policy best suits your situation (meaning, your needs and your budget).

Important paperwork

Unfortunately you can’t escape paperwork when setting up a fleet company. Or any company for that matter. Here’s some quick-fire info.

Where do you submit your papers?

An easy one. At the Department of Motor Vehicles in your state (for US-based companies). You can reach out them and they will provide you all the information you need.

What papers do you need to submit?

You’ll likely be requested to submit the bill of sale of the vehicle (with all the buyer’s and seller’s details, the date of purchase, etc), the original title of the vehicle, and of course the insurance policy which necessarily covers liability of property damage and personal injury protection. Keep in mind that there might be a minimum amount of coverage.

Beware of delinquent fees.

You may be charged if you don’t submit your papers within certain deadlines. So, make sure you get all the information you need and act on time (in some cases you need to register your vehicles within 10 or more days). For some states when you own less than 5 vehicles you might not be obliged “to register as a fleet owner”.

That means you don’t qualify for fleet status and so you won’t get fleet billing. You’ll just receive renewal notices for each one of your vehicles. When the number of vehicles owned by the same registered owner exceeds 50, you may need to register as a permanent fleet (vs regular fleet when owning less than 50).

Registration should be renewed every year.

Again, however, you should always consult your state’s Department of Motor Vehicles (or relevant organizational body) and learn all about the registration process, taxes and any other information you need to make your business a legal one.

Got fleet, will travel

Once you’ve set the foundations for your business, in the words of Optimus Prime, your fleet company is ready to “roll out!”. Nothing like a bit of 1980s nostalgia. On a serious note, however, you can now focus on executing the operation of the fleet.

There’s quite a few things to consider when you do that. Our log is packed with a lot of good advice on almost every aspect of fleet management too. But, the main things you need to focus on are:

  • Scheduling routes, trips and shifts - setting the fleet schedule with your drivers so you know where each vehicle needs to be when. All day, every day.
  • Security of your vehicles - making sure your fleet is locked away in a secured and safe location when they are not out on the roads
  • Maintenance - set up regular fleet maintenance schedules for all of your vehicles

Have you set up a fleet company recently? We would love your feedback on how you went about it, and the lessons you have learned. Feel free to get in touch with us. And if you have set up a fleet company and are thinking about a fleet management solution, then think no further. Contact us to see how you can get started with Veturilo.