When it comes to successfully running a business, having the right equipment on hand is essential. If you don’t have the tools that you need, you won’t be able to stay competitive in your industry. At the same time, however, there is no point in wasting money on equipment that won’t meet your needs. Before purchasing major equipment, it is important to evaluate how it will help your business. Depending on your situation, you may find it beneficial to rent the equipment or to wait to purchase it until a later date.
At the same time, however, there are situations where buying new equipment makes sense. Don’t hesitate to make purchases that could boost your company’s productivity or streamline your everyday processes. These types of investments can go a long way toward helping you succeed.
Before investing in equipment, you need to come up with a plan that addresses your company’s needs – both now and in the future. This plan can help you stay on track with your purchases, ensuring that you only buy equipment that will benefit your business.
1. Identify your goals.
Before making a major purchase, it is important to identify exactly what you hope to accomplish with the new equipment. Is your ultimate objective to improve your company’s productivity? Will the equipment help you become more competitive in your industry? Can you find a way to upgrade your existing equipment to avoid the need to buy brand-new equipment?
Answering these types of questions can help you identify whether or not it is the right time to buy. Even though equipment manufacturers may contact you with compelling sales pitches, don’t buy equipment unless you can clearly identify how it will help your company.
2. Consider seeking an outside opinion.
If you are thinking of making an extremely large equipment purchase, you may want to talk to someone outside your company to get their input. Sometimes, consultants who are not intimately involved with the operations of your business can look at the situation more objectively, helping you to evaluate everything from how you are using your current equipment to how the new equipment could benefit your operation. Typically, these consultants will help you put together a cost-benefit analysis to determine whether or not it is worth making the purchase.
Manufacturing businesses should generally focus on the asset utilization ratio, instead. This figure analyzes your company’s ability to utilize its equipment and assets.
3. Don’t be afraid to innovate.
Change occurs in every industry. In order to stay competitive, your company may have to get a little bit creative, looking into new ways to use the latest technology and equipment to improve your workflow.
In some cases, purchasing new equipment may help your business operate more smoothly, improving efficiency. In other cases, it may help you design innovative products or services that allow you to reach a new segment of the market. There are many different ways that today’s equipment can help you provide better service to your customers. Don’t be afraid to advertise your latest innovations, as well. Customers always like to work with companies that are industry leaders.
4. Think about the big picture.
Don’t buy equipment for your business without thinking about how it will affect your entire operation. Typically, the best approach is to analyze your business as a whole, trying to see the big picture. Figure out how each piece of equipment you purchase fits into this picture. That way, you can optimize every aspect of your business, helping to significantly improve efficiency. This is another area where an outside consultant may be able to help. They can evaluate your business to come up with a plan for streamlining your operation.
Having a plan like this in place can make it easier to know what types of equipment you need to purchase for each facet of your business. By seeing how each piece of equipment fits into the bigger picture, you can make small changes that will positively impact your business on a larger scale. In some cases, you may even find that you don’t need to upgrade your equipment after all, freeing up more of your money to invest in other aspects of your business.
Sometimes, investing in new equipment means that you will need to make personnel changes. Understanding how the equipment will affect your employees is an important part of seeing how it fits into your overall plan. For example, if the equipment is going to eliminate certain jobs, you will need to figure out what to do with the employees that are being displaced.
In some cases, you may be able to repurpose your old equipment, putting it to work in a new way. For instance, instead of throwing away your old, outdated computers, you may be able to move them to another area of your company that doesn’t require fast computers or modern technology.
Similarly, you may want to hold off on investing in the most current version of software programs, opting instead for older versions. After a new software program is published, it can take a while for the company to work out all of the kinks. Instead of having to deal with buggy software, it often makes sense to buy an older version that already works effectively.
5. Work with manufacturers and retailers that you can trust.
Typically, the best way to find equipment for your business is by combining online shopping with in-person shopping. The Internet makes it easy to research the types of equipment that are available and the companies that sell that equipment. However, there is no substitute for being able to talk to sales representatives face-to-face at trade shows or at industry events.
Try to combine online research with real-world experiences to get a balanced view of the various equipment options that are out there. In many cases, it is best to avoid excessively cheap equipment, opting instead for slightly more expensive equipment that is made by a reputable manufacturer or that comes with a long-term warranty. If you understand how to host an industrial auction, then you will have a better chance of getting a deal.
6. Plan for downtime when integrating the new equipment.
There is often a learning curve involved when employees start using new equipment. Be sure to plan for any downtime or initial delays. Additionally, plan plenty of time for training so that employees can learn everything they need to know about the equipment right out of the gate. This can help get your company on track more quickly, enabling you to enjoy the benefits of the new equipment right away.
7. Figure out how to pay for the equipment.
One of the hardest parts of buying equipment is figuring out how to finance it. Spend some time evaluating the different financing options that are available so you can decide which choice is right for your business.
For instance, if you decide to purchase the equipment outright, you may be able to get extra money included in the loan to cover the cost of transporting the equipment to your place of business, installing it, and training your employees on how to use it.
If you lease the equipment, on the other hand, your monthly payments will generally be lower. At the same time, however, you don’t have the advantage of owning the equipment outright. If you decide you want to buy it, you have to wait until the lease is up before you can complete the purchase. Even though the purchase price at the end of the lease may be lower than the original price, when you add in the cost of your lease payments, it could wind up costing you more.
For short-term projects, renting the equipment rather than buying it outright may be the best option. Renting gives you access to the equipment that you need without requiring you to make a major investment.