Strategizing Fleet Acquisition

Being a successful contractor in a competitive industry such as plumbing or hydronics requires careful resource management and scaling over time. In other words, your goal is to grow safely and ensure stability in the process, while making the investments you need to take your business to the next level.

One of these investments, which becomes a consideration sooner or later for every growth-oriented contractor, is acquiring a fleet of vehicles. 

Do you need a company fleet? How many vehicles do you need? What types of vehicles should you get? Should you buy or lease?

Let’s break down all these questions and talk about acquisition strategies that will help you make the right long-term decision for your business. 

Assess Your Needs

First things first, let’s go through your needs assessment so that you can plan your fleet acquisition strategy.

You can start by analyzing your immediate needs, relating to the current number of projects you’re working on. Then, you want to add your long-term goals as well as the trends and forecasts into the mix. Remember to consider a larger picture, such as the construction project trends as it goes hand in hand with the business potential for plumbing business expansion.

When setting up your needs assessment plan, you should create a detailed approach that covers these key bases:

• Scope and key objectives. Consider the scope of your current and future projects in order to analyze what type of vehicles you’d need. Consider your key objectives as well, which will inform how you’ll spend your resources and best allocate them for maximum ROI.

• The assessment criteria. Defining your assessment criteria is important for needs prioritization, which will inform you where to invest first. This is particularly important if you need to acquire different types of vehicles (or machinery) for your fleet. 

• Internal and external data collection. Plan to collect data from your internal experts and teams as well from external sources in the industry. You will need to combine these data sources to get a comprehensive overview of your needs. 

• Collecting, analyzing and presenting data. Once you have all the data collected and organized, you can safely make data-driven decisions, and plan your investments accordingly. 

• Needs prioritization and resource allocation. Prioritization is the key to success here, especially when you’re scaling slowly. Prioritizing your needs will direct your initial investments.

• Report on the ROI and monitor your investment. Monitoring your investments is crucial for long-term success. These reports will also tell you what to invest in next. 

With your plan laid out, along with your key steps, we can now talk about your current and future needs, and how to analyze the demand you’re experiencing. 

Analyzing Current and Future Demand

One of the biggest mistakes that growing contractors make is that they only plan to meet their immediate needs, which is a normal way to handle a sudden spike in demand. It’s also a good way to burn through your budget quickly and make a rash investment into an asset that may not be exactly right for your business.

That’s why it’s important to act quickly but methodically when demand suddenly rises. Don’t make any spur-of-the-moment investments; rather, refer to the steps we laid out above.

Of course, your first order of business is to apply those steps to your current needs so that you know what kind of vehicles you need to invest in right away. That said, you have to consider whether or not those vehicles you acquire now will also cover future demand and growth.

This is a crucial consideration, because you don’t want to overstock on the wrong vehicles and have assets waste away on your parking lot. 

You can gauge future demand based on your current growth trend, the opportunities in your area and niche, as well as your long-term goals. Your long-term goals are a good predictor of how you should go about your current investments, especially when combined with a positive upward trend you’re experiencing now.

Keep in mind that current projects will sow the seeds for more referrals and more lucrative projects in the near future. 

Identifying Required Vehicle Types and Capabilities

One of the most important considerations is the types of vehicles you need to add to your fleet—or the kind of vehicles you should invest in for a brand-new fleet.

Remember the vehicles' capabilities and the kind of equipment they can transport to your sites. From your small and maneuverable vans to heavy-duty haul trucks, you need to be prepared for every project regardless of scope.

One of the key considerations that will help you make the right decision is the kind of equipment you’re transporting. For contractors who are buying heavy equipment for large-scale projects, it makes sense to invest in vehicles that can transport that equipment to a worksite quickly and safely.

On the other hand, if you are wielding smaller machinery and equipment and subcontracting heavy machinery (say, for digging wells or a geothermal field), you can safely invest in several smaller vehicles instead. 

Settle on the Right Fleet Acquisition Strategies

In the end, it’s important to remember that making these kinds of large investments can make or break your budget, so you need to make your decisions based on the relevant data.

With that in mind, consider the stage your business is at right now and if leasing or buying used equipment might be a better initial investment—perhaps with an option to buy the vehicles later at a fair market value.

This is a good option for contractors who are experiencing sudden growth but are unsure if the trend will persist or how their needs will evolve over time. 

Over to You

Acquiring and managing a fleet of vehicles is a sizable investment, both financially and in terms of other company resources. If you’re still a small contractor and need an additional vehicle or two for those big projects that come in from time to time, leasing is a good option for the time being.

On the other hand, buying is the way to go if you’re experiencing steady growth and booking projects throughout the year that demand managing multiple sites simultaneously. Even if you’re ready to buy more vehicles, however, you should always assess your needs carefully.