What is one thing to consider when making an equipment purchase?
To help companies with equipment purchasing, we asked business leaders and equipment financing experts this question for their best advice. From initial investment costs to safety precautions, there are several considerations that may help you when purchasing equipment for your business.
Here are eight things to consider when making an equipment purchase:
- Evaluate Initial Investment Costs
- Determine Productivity Yield
- Review Maintenance Costs
- Examine Necessity of Equipment
- Assess Life Span
- Look into Daily Usage
- Consider Safety Precautions
- Make Adaptable Purchases
Evaluate Initial Investment Costs
Financing should be one of the top considerations when making an equipment purchase. With new equipment, there may be very low financing costs made available when the manufacturer offers “0% down” or makes another low financing incentive to a buyer. While used equipment typically carries higher financing costs, the purchase price will likely be much lower than a new piece of equipment. That’s why it’s important to conduct a cost-benefit analysis of buying new versus buying used. Sometimes, the savings of buying new can actually outweigh the total cost of financing used equipment.
Carey Wilbur, Charter Capital
Determine Productivity Yield
Production output. Some would argue that price is the most important factor, but a major consideration should be if the equipment’s productivity can outweigh how much the equipment costs in the long run. A machine’s return of investment and expected length of optimal performance are key considerations when making an equipment purchase.
Ryan Shallenberger, SEKISUI
Review Maintenance Costs
When buying equipment, it’s important to consider how it might affect your bottom line. Some types of equipment require lots of regular and expensive maintenance. Other types of equipment might not last very long. In Marketing one of our most valuable equipment is our computers. As technology continues to develop at a fast rate, computers also become obsolete at even faster rates. So, it’s important to research before you buy. You can get more bang for your buck for a relatively long time when you choose a newer model.
Rronniba Pemberton, Markitors
Examine Necessity of Equipment
Does the equipment replace manpower? It is important to optimize your manufacturing process as best as possible, but only if it will increase productivity and serve as an addition freeing up hands better suited for other tasks. Often, businesses can purchase loads of equipment they don’t necessarily need, and it ends up taking up much-needed space. Assuming it is resourceful and something your business requires, make sure you consider a warranty and the training involved as well when assessing the total cost.
Katie Lyon, Allegiance Flag Supply
Assess Life Span
One thing to consider when making any sort of purchase that’ll help you to improve your business is your future needs for that piece of equipment/tool/software. Now, this isn’t just considering how you might need it in the future, but how you might not need it in the future. For example, purchasing software/equipment that’ll soon be irrelevant to your business processes isn’t going to help you, much like purchasing software too early will be wasting your money now, and will prevent you from spending it where it’s needed most. Proceeding cautiously can greatly benefit you for both short and long term goals, and will give you room to adjust if you suddenly need to.
Tarah Darge, Time to Reply
Look into Daily Usage
When you are looking to make an equipment purchase, one of the things that many people try to do is to save money by trying to find the cheapest deal possible. And while buying the lowest priced model can save you a significant amount of money in the short term, it is a decision that could end up costing you a lot more money in the long haul. This is most applicable to those purchasing equipment that will play an important part in the daily operation and workflow of a business. For instance, it could be buying PCs for a corporate office, high-end heating machines for a hairdresser, or ovens for a restaurant. Since equipment like these are used on a daily basis, they are worth spending that extra bit of money on the best models available. After all, if you end up buying the cheaper end model and it ends up breaking down within a short period of time, then you either have to pay for repairs or even worse, buy even more new equipment.
Caroline Lee, CocoSign
Consider Safety Precautions
When purchasing equipment for your business, a very important consideration to make is how that equipment is going to affect employee safety. Your employees’ safety in your company should always be at the top of your mind, and if bringing in new equipment is going to pose a potential threat to their safety, you might want to reconsider or will need to update certain protocols for using that equipment. Neglecting this consideration is not only dangerous for your employees but could result in a massive lawsuit which could result in your company closing down. Take it very seriously, and you’ll run a more efficient and safer workplace.
Peter Horne, Geoff McDonald and Associates
Make Adaptable Purchases
Predict the future, or at least try to. Anytime you’re making a big-ticket purchase, whether it’s for personal or business purposes, you want to make sure it will be nimble enough to adapt to potential, unforeseen events or changes that may take place. For example, try to plan ahead to make sure your equipment doesn’t become obsolete too quickly, retains resale value, can be used for additional use cases or purposes, and won’t become anything but a depreciating, useless liability.
Darryl Higgins, Athlete Desk