Financial Resolutions for 2023
Last year was an incredible period of prosperity for the vast majority of operators in our industry, a welcomed reprieve after the extreme austerity measures most had to take during 2020. But while revenue was rolling in, longstanding priorities may have been pushed to the backburner or ignored altogether as other issues took precedence (hiring and finding vehicles, amiright?). Now that we’re in a new year, what’s on your financial checklist for 2023? Here’s a few ideas to get you started.
↹ Business Nest Egg: Many operators are seeing some of the best revenues of their lives—but failing to adequately rebuild those depleted cash reserves that were used during the torrentially rainy days of 2020. Business will stabilize and even slow down at some point, and recessions are inevitable, so it’s important that you are being prudent with your cash and socking it away for the next crisis, especially if you are paying down any emergency loans from the pandemic. Hey, we know it feels great to be making money again, but rebuilding your cash should definitely be a main concern. Financial experts usually recommend at least six months’ worth of cash reserves, but it’s a balance between saving enough and saving too much that you aren’t reinvesting into the business. Also, don’t forget that prices continue to rise, so you might want to build in a cushion to accommodate projected expenses. Remember the gut-crushing feelings and sleepless nights of March, April, and December 2020? Good, now get saving. By the way, you can read more strategies on how to do this on page 24.
↹ EVs: Considering alt-powered vehicles for your fleet soon? Congress and the Biden administration are making it easier—or at least cheaper—to add EVs to your lineup this year thanks to the Inflation Reduction Act passed earlier this year. The (updated) Commercial Electric Vehicle and Fuel Cell Electric Vehicle Tax Credit offers incentives up to $40,000 per vehicle for businesses that add these clean cars to their operation after January 1, 2023. And unlike the incentive for personal-use vehicles (Clean Vehicle Tax Credit), this credit has fewer restrictions and more generous allowances.
How it works (via the US Department of Energy): Vehicles with a GVWR below 14,000 lbs. must have a battery capacity of at least seven kilowatt-hours (kWh) and vehicles with a GVWR above 14,000 lbs. must have a battery capacity of at least 15 kWh. The tax credit amount is equal to the lesser of the following amounts:
1. 15 percent of the vehicle purchase price for plug-in hybrid electric vehicles/30 percent of the vehicle purchase price for EVs and FCEVs, OR
2. The incremental cost of the vehicle compared to an equivalent internal combustion engine (ICE) vehicle
• Max caps are $7,500 for vehicles with a GVWR below 14,000 lbs. and $40,000 for those exceeding 14,000 lbs.
• Vehicle must be used in the US
• Cannot be combined with the Clean Vehicle Tax Credit (which is specially for personal use)
• Credit is set to expire at the end of 2032
Note that many cities and states may also have their own programs, so talk with your accountant or visit to search for additional incentives (federal, state, and local) that may apply to your business—which may even help defray the costs of installing charging infrastructure in your company’s garage. As always, the devil is in the details, so be sure that you are consulting with a tax professional for maximum benefit.
↹ Marketing: Wait, what? I’m too busy for marketing! For many, 2022 was so consumed with meeting demand with fewer vehicles and employees to handle the load that marketing took a back seat. Now that you’re hopefully a bit more balanced going into 2023, it’s time to dust off that marketing message and hone in on the customers you want to attract in the coming months and years. Chances are you’ve branched out into new sectors in the past 24 months, and you’ve had to change your messaging to connect with a new audience—or maybe you didn’t change it at all. With meetings and corporate travel continuing to recover, it’s vital that you’re staying in touch with those loyal clients and consistently replenishing the pipeline with new ones. Retail clients are great, but remember that the stubbornly persistent inflation will eventually take its toll and they will be among the first to scale back. If you stopped marketing altogether, it’s even more critical to restart ASAP. Brand awareness is everything—but also is knowing your limit on the amount of work you can handle.
↹ Outsourcing and Remote Workers: If you’re still dragging your feet on hiring talent outside the office, then there’s no time like the present to give it a shot. It’s become easier than ever to attract, hire, and keep track of employees who work from home, regardless if they are local or beyond your service area. Whether you’re hiring brand-new employees or sharing resources between companies, it’s an essential way to save money and still get the 24/7 coverage you need. But also consider this to retain your current employees. Many job seekers of all ages cite the ability to work from home as a top concern, but your current team may also benefit from a more flexible schedule or a limited commute a few days a week. It’s not for everyone, but it doesn’t hurt to ask or give it a trial run. After all, a happy team often coincides with a profitable company. [CD0123]