3 Reasons Small Businesses With Vehicle Fleets Should Use Telematics

By Jonathan Bates, Chief Product Officer, Powerfleet 

Telematics technology can help small businesses operate vehicle fleets and achieve significant cost savings and operational improvements, regardless of fleet size. For companies that don't focus on transportation—such as landscaping, plumbing, and electrical services—implementing fleet management solutions can deliver substantial returns on investment while enhancing safety and efficiency. 

Frisch & Sons, a California-based excavation and landscaping company, exemplifies the impact of telematics on small business operations. This small company, which manages eight vehicles, from pickups to dump trucks, implemented telematics in 2019. Owner Bobby Frisch sought better visibility into staff and vehicle locations, job site duration, and driver behaviour monitoring. 

The results were immediate and impressive. Within the first week, their telematics solution uncovered a time calculation error that had been costing them over 50 hours of unnecessary overtime weekly. This discovery alone saved the company nearly £1,000 per week. Additionally, they reduced fuel costs by approximately £300 monthly through better fuel card management and optimised routing, bringing their total weekly savings well above £1,000 – far exceeding the system's cost. 

Small Business Telematics Benefits 

Here are the top three ways small businesses like Frisch & Sons are making the business case for investing in telematics. 

1. It's a deductible business expense. Many small business owners don't realise that outfitting their vehicles with telematics is a qualified business expense. Speak with your accountant for details, but generally, the hardware devices in vehicles are a capital expense, and the monthly software subscription is an operating expense. Both are deductible, so they will help reduce your taxable income, which reduces your overall tax bill. 
2. You'll save on fuel. Several elements are involved. First, monitoring driver behaviour can help eliminate fuel-wasting practices such as excessive idling, harsh acceleration, and out-of-route driving. You can also ensure that vehicles fuel only at your preferred petrol stations and that drivers fill only your vehicles, not their own personal ones. 
3. Better vehicle and people management. Telematics lets you know exactly where every vehicle and person is in real-time. You'll know when they arrived at a location, when they left, and when they arrived back at your office to more accurately record working hours. You'll know if they made a stop, where, and for how long. Suppose equipment or particular expertise is required at a particular job site. In that case, you can easily determine the location of the closest crew and vehicle with the equipment or expertise, cutting down on travel time. 

Telematics is required by law in heavy-duty vehicles because the technology has been proven to improve safety, efficiency, and compliance. The same benefits accrue when telematics is used in smaller vehicles and fleets. 

Small business telematics solutions begin at less than £20/month and provide very quick returns – usually within the first month. With a little electrical knowledge, you can install the hardware yourself in about 15 minutes or take advantage of the low-cost, local installation most vendors offer. There is generally no minimum number of vehicles, and fleets with as few as three vehicles can reap benefits. 

For small companies looking for ways to cut costs without affecting service, telematics for small business is a very attractive option.