Grow Your Business

Business is brisk. Your phone has been ringing off the hook for orders, and you are thinking of expanding to another location. You have been doing fine so far by using the family car for deliveries. But then, it can only do so much and get you so far.

It may be time to invest in a company vehicle.

GOING MOBILE

During its first six months of operation, Bottlezone, a Makati-based trading company, made its deliveries by motorcycle. But to stay competitive, owners Rajani H. Rance and her husband Ramon decided to invest in a van. "We needed one because the load capacity of a motorcycle is only three cases per trip," she says.

Bottlezone delivers wines, liquor, spirits and cigarettes to restaurants, bars, grilleries, hotels, resorts, and clubhouses. "We also have corporate accounts that order gifts from us," she adds.

The name of the game, she says, is mobility and access to the customer. Today, the couple still keeps their motorbike, but through the years, they have purchased an L300 FB, an Isuzu pickup, and a Toyota Super Grandia. The L300, they note, is spacious enough for deliveries, the Grandia comfortable enough for family use, but the pickup can be a liability during the rainy season.

The vehicle buying decisions of businessman Florentino Lucido are somewhat different.

In 2000, he retired from his job at a waste management company to put up a steel fabrication business. But problems with manpower made him give up this venture, so he opened a grocery and a small restaurant instead. They catered to guests at a nearby lodging inn, which he noticed was attracting a lot of tourists. His business prospered and it eventually led him to put up the 14-room Lucid Towers in Makati City on a lot owned by his parents.

Today, he and his wife are now also running a laundry shop, a sari-sari store, and a manpower agency. He says that his hotel business is doing so well that he now plans to put up an annex to his tourist inn.

At first, Lucido says, he was able to get by with an old Mercedes Benz that he had been driving for four years.  "But I sold it because it was becoming hard to maintain, and I went without a vehicle for one year," he recounts. Later, however, he ventured into fabricating industrial-type washing machines, so it became a major consideration in his decision to buy a truck.

"I bought a brand-new Nissan Frontier on installment," he says.  "It is sturdy and tough enough para pag-kargahan ko ng bakal [to load with steel] for my machines.  And when my wife and I go out, at least we are comfortable and cool, kasi malakas ang aircon [its aircon is strong]."  Still, Lucido says, he prefers to use his bicycle when going out on short trips.

"A vehicle may not be the first thing you need to buy unless it's to be used for your main business," says Elizabeth H. Lee, president of the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) and executive vice president of Universal Motors Corporation (NISSAN).  "But if you want to go into business, a vehicle becomes a must.  Through the UMC-Nissan's "Ur Van, Ur Business" promo, for instance, we encourage buyers to become entrepreneurs by using the Urvan as a self-liquidating mobile business venture like a shuttle business, a school bus, or a cargo or delivery van."

She also cites the roving "kusina" (kitchen), the roving "bar", and the roving "pet shop" as mobile businesses that are being pursued today by innovative entrepreneurs.

Lee gives the following factors and practical tips for choosing a vehicle for business use:

• Vehicle size and utility. Make sure the vehicle you are thinking of buying can transport your goods easily.

• Durability. The reputation of the vehicle you will purchase is important.  Is it known for durability?  Since the purchase of a vehicle is intended for business use, it should be able to withstand the rigors of use. Durability is key.  With proper and religious maintenance, the vehicle should last a number of years.

• Price. Shop around to see which vehicle type--whether a van or pickup truck, for instance--will fit your budget, your need, and the utility you require for your business. Price should not be the only consideration in purchasing a vehicle.

• Quality. One must think long term versus short term. You must check the quality of the vehicle you will be purchasing, particularly if you are buying it second hand. If you are buying it brand-new, check the reputation of the vehicle you will be buying. A cheap vehicle may cost you more in the long run if it breaks down so easily and entails high maintenance costs. You must also make sure to buy vehicles only from legitimate dealers from the formal industry, for you may not be able to register cheaper but contraband used vehicles.

INSTALLMENT OPTIONS

According to Lee, now is a good time to invest in some brand-new wheels. "Interest rates are at an all-time low so far, coupled with inflation rates lower than those for same period last year," she says.

Her tip to vehicle buyers: "You should manage cash inflows to pay for the monthly amortizations. Make sure to choose the monthly payment rate appropriate to your capacity to pay. Banks are flexible and they will be willing to tailor fit the payment terms to your needs. The most popular payment term these days is 36 months."

BRAND NEW VS. SECOND-HAND

Lee says there are two things to look at if you are buying a used vehicle:

1. Age. A well-maintained vehicle can last for over 10 years and still run quite well. However, the key is maintenance and ownership.  An accident like a collision can affect the vehicle's life. If the vehicle is not religiously maintained, its life might be shortened and its safety compromised.
2. Price. The purchase of a vehicle calls for a fairly significant capital outlay, especially for cash purchases. One must always consider the total value of the vehicle prior to purchase. An offer of a "cheap price" for a vehicle may cost the buyer more in maintenance if the vehicle keeps breaking down. So think long term. It will save you more time and more money and it will keep you focused on your business instead of on vehicle repairs and related problems.