All businesses need equipment to a certain extent. Some businesses heavily rely on equipment; others only need a telephone system, a server, a few computers, as well as other essentials.
If the former describes your business, and you require a significant investment in equipment to get your startup business up and running, there’s plenty that you need to consider. You have to invest wisely, and at the same time ensure you don’t wind up running low on cash.
Keeping that in mind, here are some great beginner tips for investing in equipment for your startup business.
Start Off with a List
Before starting your shopping, it’s critically important to first make a list of equipment you need and want. Include this list in your business plan, so you can continue to revise and update it as your business expands.
Break this list into a couple of columns. The first column should include a list of essential equipment you need now for vital operations. The second column should be a wish list of equipment that might benefit your startup but aren’t essential.
Begin by buying everything on your first column before purchasing the extras you can get when your business has already taken off.
Be Ready to Seek Help
If you feel like you’re out of your depth when it comes to buying equipment, it doesn’t hurt to ask for assistance from companies that specialize in helping with these issues. They’ll ensure you’re given all of the purchasing options available to you, designing a solid equipment plan for your business. This should put your fears to bed.
Know the Available Financing Options
Every financing option has its own pros and cons, so carefully assess each option. The things to consider vary from one Machinery & Equipment Company to another, depending on your line of business or credit history.
Purchasing lets you own the equipment when the transaction is done. Your business pays back the investment over the lifetime of the equipment. In some cases, you may secure financing for more than the cost of purchase. For instance, in addition to 100% financing for the purchase price, you can get extra financing to pay for the cost of transportation, installation, and training.
Leasing business equipment for a given period can be cheaper than buying the equipment. However, since you don’t own the equipment, you’ll need to wait until the expiry of the contract to own it.
The cost of the equipment then can be lower than the original buying price was. But since you’ve always been paying for the lease, leasing may eventually cost more than the other options. Depending on the lease’s structure, your payments may be considered part of the operating costs.
This option may be suitable for equipment that’s needed for a specific project, or equipment that quickly becomes obsolete. As rented equipment isn’t a fixed asset, you can quickly return or exchange it with negligible cost.
Identify What to Outsource
Looking at your list of equipment, you’ll want to determine what you can outsource. This could be due to space limitations or financial reasons.
You might be able to do without the copier, coffee bean grinder, or other bulky equipment in the immediate term. This will bring down your initial investment and avoid filling up your workspace.
Make a Drawing
Regardless of whether you’ve got a retail business, restaurant, salon, or accounting office, you need to take accurate measurements of your workspace so you can make smart decisions when it comes to buying equipment. Even if you’ve found a top-of-the-range photocopier, there’s no use buying it if it’s too large for your office.
The internet allows you to access a wide variety of specialized equipment providers, so take your time to research. Attend trade shows to get hands-on experience with the equipment, and check out newsletters focused on specific industries.
You can also get in touch with industry organizations for further information. Don’t allow price alone to dictate your decision when choosing a supplier. Also, consider factors like the supplier’s reputation and post-sales service, and ask for references.
If you are a devoted customer, you should ask for a detailed customer service plan or better warranties.
Consider Buying Used Equipment
In an ideal world, you’d love all of your equipment to be brand new. However, this isn’t always possible, which is why it’s wise to give the second-hand market a try. You need to proceed with caution, though. Determine which equipment can be second-hand, and which should be new.
Also, make sure that any used equipment is of high quality and comes with a warranty. After all, second-hand equipment will end up being more costly if it’s of poor quality.
Factor in Training
All too often, business owners don’t consider the money, resources, and time required to train staff on new equipment. When your staff takes too long to adapt to a new process or technology, their productivity will inevitably drop.
If the equipment comes with new features or it is brand new, your employees are likely to go through a learning curve. Therefore, it’s vital to avoid problems by making sure that you’ve got the funds in place to compensate for the ensuing downtime. You’ll have to find time to train staff and ensure that your operations run at full capacity.
Keep it Green
When buying equipment, make sure it’s energy-efficient. This will not only save you money, but you’ll also help save the earth. Do some research about the effect of your business equipment on the environment and find a way to clear out your current equipment in a manner that doesn’t harm the environment too much.
The Bottom Line
It’s our hope that by now you feel more ready to start the process of purchasing equipment for your startup. While there’s plenty for you to consider, the right research, help, and attitude will ensure that you do it right. Keep in mind that it’s okay to seek help if necessary. If your business can’t do without equipment, it’s imperative that you go about this the right way.