Do you like shopping? No matter how you feel about a little splurge, it’s different when it comes to your business. Buying new equipment can feel like a financial burden. However, keeping half-broken equipment functional is an expense, too. By the time you accept that it’s time to replace a soda fountain, backhoe, or server, you might have already sunk untold amounts of money into maintenance and repair.
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New Equipment or Used?
It’s tempting to replace your old service vehicle with someone else’s old service vehicle. After all, it works better than the one you currently have. But buying used equipment often eliminates the business benefits of using brand new items.
The first consideration here is how long it will last. A new computer, for instance, will almost certainly last longer than one that’s two or three years old. So you can expect that you’ll essentially need to buy that used item twice to get as much use as you would out of one new purchase.
This doesn’t apply to everything, of course. However, ask yourself how fast and efficient the used item is before considering it a good deal. Will it actually increase productivity and make the job easier? Or is it merely a marginal improvement over what you have?
If you’re buying office equipment, items like desks and chairs can absolutely be used. That’s because these items are often resold with little evidence of wear. They are important, of course. However, they’re not critical to the most essential operations of the average business.
Lease or Own?
If you need machinery, vehicles, or other expensive items, you might be tempted to lease them. This is not a decision you should make lightly. That’s because the best option will be unique to your needs.
Leasing can seem more budget-friendly. However, it adds up in the long run. Those monthly payments might be more affordable, but you’re paying interest along with them. Calculate the total you’ll be paying to lease your equipment for the designated period. Then compare to the cost of purchasing outright.
That said, leasing can be a good option if you want to upgrade in the next year or three. This can be beneficial to businesses that require the latest and greatest to stay in step with the competition. Just be sure that maintenance, which the leaser usually strictly controls, is reasonably accessible to you.
If you’d prefer to own but feel it’s out of reach, check out a commercial lender like https://equifyllc.com/.
Whether you lease or buy, replacing your business equipment brings tax advantages. In the case of leasing, your payments may be tax-deductible. Buying equipment can qualify you for certain incentives, as well. For example, business owners in the U.S. can claim deductions for depreciation.
You might dread spending the money initially. However, new equipment can save your business money. Items under warranty will take the worry out of maintenance and repair, for example. What’s more, newer, more powerful equipment can make jobs easier to complete, with better results. Finally, something brand new might be safer to operate than the old or faulty equipment you have now. Longevity, productivity, and safety are within reach when you update your equipment this year.