Negosentro | 3 Questions You Should Ask Yourself Before You Buy New Equipment for Your Company | Buying equipment can often be a highly complex decision for business owners, especially those that are dealing with cash flow issues. They might be torn between buying new or used equipment, for instance. They may also wonder if they will actually be able to make a return on their investment. In this article, we will look at a few crucial questions you will need to ask yourself before investing in new equipment.
Do I Need to Buy it?
The very first question you should ask yourself is whether or not buying a piece of equipment upfront is a good idea in the first place. If you are having issues with production but only at certain times of the year, it would not make sense to buy an extra piece of equipment that will stay unused for half the year.
If you have a lot of orders at specific times of the year and you need something like an extra forklift at that time, know that you could rent a forklift from a St. Louis forklift rental service if this is where you are located. This will allow you to save on costs and not worry about things like maintenance, among others.
What About the End of Life?
You also have to consider what will happen with the piece of equipment at the end of its life. If you buy a piece of equipment that is five years old, for instance, you have no idea what is going to happen with technology in your industry, and you could end up with a machine that is pretty much unusable once you are done with it. So, always think about how much residual value the piece of equipment will have and whether a long-term rental could be a better option.
Should I Buy it Used?
Another question you have to answer is if buying a used piece of equipment is a good option. It can be in some instances, but it depends on what your needs are. You also have to look at the price of the equipment and see if there is a chance that it will become obsolete.
Things like case packers, for instance, can last for decades without having to be replaced. If you do not expect to replace the machine soon and can find a reputable supplier willing to back it up, going for used equipment is the right choice.
There are cases when going for a new piece of equipment would make more sense. Buying new will usually get you more protection, and you get a service deal as part of the package. People will also prefer buying a second-hand piece of machinery from a first owner, so you will get more value in return.
Planning an equipment purchase should take time, and you must look at your operations and finances in detail before making your decision. Take the time to answer these questions, and only work with people you can trust.