Hello John got a new motor?

Posted by Brian | Friday, May 28, 2010

A friend of mine is a finance specialist. He is John Graham and he runs Alba Asset Finance. We meet every Wednesday as part of a business group, 25am, in Norwich. There are up to 30 attending business owners and we have breakfast and chat about whatever fills our brains on the day.

This week John mentioned an experience he had which I am familiar with as someone with a very distant background in motor vehicle sales.  It is a financial issue and I will not cover this in detail as I do not specialise in this area but an overview is as follows. (If you want specialist advice ask John)

He had met with a prospective client to discuss the purchase of a commercial vehicle. The client was aiming to purchase the vehicle from a supplier and was being offered the sale at a 0% finance rate. Excellent you may think as the finance is free. This, I know from experience, is never the case as the money must be made up somewhere. And in this case that was correct as the vehicle was being sold at retail price.

Now John was able to source a vehicle at a discounted price saving a minimum 30% to the client in hard cash but as the finance was listed at 3.9% this was appearing unattractive.  In essence the purchase would have been substantially cheaper in real terms on 3.9% as opposed to 0% finance when assessing the ‘whole life cost’ of the transaction. This meant that the client would pay a lot less for the same thing. Ideal you would think but do we always understand the detail when we purchase something and do we always understand fully the ‘Whole Life Cost’ of it.

This is true of many things and websites are no different. In assessing the suitability of an online presence for your business what do you consider?

• The look?
• Technical development?
• The company building it?
• Nothing at all?

It is not always easy to know what you may not understand but if you are to get value for your money you must learn or trust in someone to advise you.  Websites are not easy to cost although they may be easy to value. There is no set price as you can pay anything from £0 to..well anything at all.

So how do you determine a Whole Life Cost in this scenario? I think that first it is important to understand what you are looking to achieve with any website or online presence. Is it just an online brochure to your business that will provide information to existing clients? Are you aiming to attract clients to the business? Or is it going to be managed as an online ecommerce store?

These are all different entities as they can work differently from each other and contribute to your business in different ways so you must ensure that what you buy is what you need. They may also process visitors in a different cycle so this must be done correctly as losing a customer online is a very quick procedure.

Alongside this, as in the vehicle example above, you must ensure the ‘Whole Life Cost’ suits your needs. It is somewhat pointless to spend out in money and time to develop a project that only lasts a short space of time as it does not do what you want it to do.

This is not uncommon in the world so when you do buy ensure you buy wisely and don’t be lured immediately by what may appear to be the deal that fits. 

If you would like to know more about the efficient purchase of vehicles (including savings of over 30%) I would suggest that you get in touch with Alba Asset Finance

If you would like to know more about the purchase of an online presence for your business we have that one covered so please do drop us a line