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6. The running expenses of your vehicle can bury you if you’re not careful. The vehicle used for deliveries / general running around should be a low-cost diesel bakkie or car, that is either locally manufactured or covered by a comprehensive maintenance plan (parts on fully imported vehicles are usually scarce and cost the earth). Stick to Japanese or Korean vehicles for reliability and durability All too often, the temptation is there for a new business owner to purchase a flashy German car (as the getting Finance from the bank is easier for a business owner than the man in the street). The justification is often that “If I look successful, I will inspire confidence in my clients and thus get more business”. This is not the case. By running an expensive car, you are:
a) Killing your business with increased vehicle costs (lease, fuel etc). b) Showing the customer that you’re overcharging them to afford the fancy car (most times the customer won’t even see your car anyway). c) Tossing money down the drain that could better be used on advertising, stock etc.
An investment of R 8,000 on advertising for 6 months (R 48,000 in total), will put you on the map and can generate tens of thousands of rands worth of income, BUT that same money spent on car repayments will get you nothing in return, but 4 more years of the same repayments. Indirect Stock Costs You need to hold stock (minimum of R 3,000 to R 8,000 at a time). If you hold less stock, then you will end up having to order small amounts of stock on a very regular basis, and the cost of getting this stock (whether you collect yourself or use a courier) will ultimately cost you in the long run. Also you need to keep some stock of your primary sellers – there’s nothing worse than taking orders and finding your supplier doesn’t have stock. Making your own product vs purchasing ready made Sometimes you will see a ready-made product such as a tile stand and decide to make it yourself instead of purchasing it, but time is always against you so you end up not making it at all, or you spend all your time saving R 10 worth of product. You need to stick to what you’re good at. If woodworking and manufacturing is your forte’ then contact us and you can make things for us, otherwise stick to selling, and you will make more money that way. The same hold true with coating. You can buy spray coatings and try to spray your own items but you will never be able to achieve the same quality a coating company does – It’s the same as trying to paint your car with a spray can.
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