Buying equipment is needed for some businesses to open and for others to expand. In other cases, buying the right equipment is necessary to remain competitive. Yet mistakes made when buying these often-expensive line items in your budget can cripple your business. Here are 3 essential tips when buying equipment for your small business.
Know the Final End Goal
Don’t buy equipment ad hoc. Instead, have an overarching vision for your business to be so that you can plan purchases in line with that vision. What do you need to buy to meet your desired production levels? What do you need to buy to improve the quality of your output or accommodate future growth? Then you only buy what you need to move toward your final goal, even if you can’t afford to buy a whole assembly line right now.
Nor should you buy what your rivals are buying simply because it is what the competition is doing; you may be going in a different direction, which makes copying others’ business decisions a mistake. So, know where you want to be so that you only buy what you need to get you there.
Do Your Research
It is surprising how many people do detailed research before buying items for personal use but simply take the salesperson’s recommendation when they buy business equipment. Instead, take the time to shop around. Identify all of your potential suppliers and determine what products are worth investigating further.
Compare suppliers on issues like post-sales service and lifetime operating costs, not just the purchase price. And don’t take the salesperson’s word for it regarding the equipment’s performance or issues. It would be wise to check out a review site such as Extensively Reviewed as well as getting a second opinion from buyers online before you make any purchase.
Research everything that will be impacted by such a purchase. Does this impact your safety procedures? Will it affect your ability to meet ISO or other industry standards? Find out whether or not you’ll need to train employees on how to use the new equipment and what you’d need to do if the equipment breaks down. It may be worth it to pay a little more for equipment if you get free training and an extended warranty. Or you may want to buy the more eco-friendly product to save on utility costs.
Understand Your Financing Options Before You Buy
There are several benefits of understanding your financing options before you buy new equipment. If you have the right financing in place before you go shopping for equipment, you’re able to negotiate with vendors because of your stronger position. You don’t have to take the financing they offer you. If you secure external financing, you can choose a payment plan that won’t interfere with the cash flow you need to run the business. Understand the pros and cons of leasing versus buying on credit or paying cash up front. Maybe you’d be better off renting equipment you could return if it will soon be obsolete or is only needed for a specific customer run instead of buying it.
Selecting the right equipment for your business is a major decision. Give this effort the time and attention it deserves. You can’t afford to make mistakes in this area.