Fuel saving tips for SMEs

Jess Weinberg. PHOTO: Supplied

Fuel remains one of the most expensive operating costs for SMEs with a few vehicles. As a result, this makes it essential for SMEs to actively manage this expense to avoid it negatively impacting on profit margins.

Earlier this year, petrol prices in the country reached a record high, pushing the cost of fuel to R26.74 per litre, leaving small businesses with no choice but to absorb the increase.

According to Jesse Weinberg, Co-Head, SME at FNB, the tough economic environment, including additional cost pressures such as load-shedding and fuel price hikes, makes it essential for SMEs to constantly review their cost-cutting strategies and find creative ways to make their businesses more profitable. “For fuel, in particular, there are several strategies that SMEs with a few vehicles can consider, given the volatile nature and economic factors that impact fuel prices.”

Maximising loyalty and reward programmes – similar to how these programmes have been successful in providing some form of relief for consumers, SMEs have the potential to benefit even more, considering the number of vehicles they may own, as well as fuel spend monthly.

During tough economic times, some small businesses may opt to skip vehicle maintenance to cut costs. Weinberg says although this may appear to work in the short-term, it has long-term financial and possible risk ramifications for the business; not only do poorly maintained vehicles often consume more fuel, but unforeseen vehicle breakdowns are expensive and can impact a business’ reputation by impairing its ability to deliver to customers.

He adds that SMEs should also consider investing in telematics that help monitor fuel usage as well as driving behaviour, such as speeding, which can result not only in possible fines, but also contribute to higher fuel bills.

SMEs should also consider using navigation apps and systems to avoid heavily congested routes which often result in higher fuel consumption and delays. Navigators such as Google Maps and Waze have proven to save businesses money on fuel, especially during load-shedding when traffic lights are out.

Compiled by Justine Fortuin