Buying new equipment for your business is often a good sign—when you have to buy a new piece of equipment to supplement your existing ones, then it may mean that your business is growing. Or, on the other hand, if you have to buy new and better equipment to improve your products and/or services, then it’s a clear sign that your business is heading in the right direction.
However, buying new business equipment is not always the easiest task. New equipment—whether it’s something big like a stainless steel laser engraving machine or something relatively cheap like a new office printer—will take a sizeable chunk out of your revenue, which can thus affect your cash flow. With that in mind, here are some do’s and don’ts to remember to ensure that every new purchase is done right:
Do #1: Wait for the right time
Most equipment suppliers drop prices at certain times of the year, such as right before a holiday or the end of a quarter. For example, many sales managers are eager to get rid of stock right before the quarter closes so that they can hit sales targets. If you contact them near the end of the quarter, they may be more willing to give you a significant discount on your purchase, which means hundreds—if not thousands—of dollars in savings.
Do #2: Negotiate
Even if it’s not the most opportune time to buy new business equipment, don’t hesitate to negotiate. If you ask nicely, most companies will be willing to give you a good offer and may perhaps throw in some free stuff with your purchase. The worst that they can do is say ‘no’, so don’t be afraid to ask.
Do #3: Consider refurbished equipment
Some refurbishing companies do such a good job at refurbishing equipment that they can be mistaken for brand new. Equipment from these type of companies have a good chance of lasting years or even decades after purchase—but with a much lower price than new equipment.
So, if you need a new piece of equipment for your business, consider buying from a refurbishing company. However, ensure that you do due diligence to avoid falling into a trap. Make sure that the refurbishing company provides warranties, employs licensed technicians, and has a good reputation—some companies don’t refurbish the equipment at all and try to pass them up as refurbished, often selling them at an unrealistically low price.
Do #4: Go green
Equipment with increased energy efficiency does not only help your business reduce its carbon footprint, but it also minimizes your energy consumption as well, resulting in lower overhead costs. Moreover, energy-efficient equipment also tends to be more durable due to its efficient design, which means fewer chances of equipment failure and fewer expenses on repairs.
Don’t #1: Fail to anticipate the need for new equipment
One of the worst mistakes that business owners make is waiting until the last minute to purchase a new piece of equipment. Not only does this increases your risk of downtime from making the switch (or having the existing equipment fail on you), but you are also in a disadvantageous position to negotiate since you need the equipment ASAP.
Don’t #2: Base decisions on price alone
When buying equipment, one of the biggest factors that you probably consider is the price tag. While price should heavily affect your decision, it should not be the driving force behind it. For example, an expensive piece of equipment does not always mean it’s good, whereas equipment with ‘too good to be true’ prices often don’t meet quality standards.
Along with the price, spend more than enough time mulling over these factors as well: the quality, the manufacturer, reviews from other customers, and the inspection results.
Don’t #3: Buy when you can’t afford it yet
Unless the need for new equipment is dire, it is generally more advisable to put off new purchases until your business is in a more stable financial decision. Otherwise, you could end up tightening your cash flow, which can easily affect other vital aspects of your business, or worse—have you end up borrowing money because you are strapped for cash.
If you do need the equipment ASAP but don’t have the cash for it, consider financing the purchase with a loan or with a payment plan from the manufacturer. Financing can increase your overall expense, but it can help you maintain a positive cash flow.
Every new piece of equipment is an investment for your business, but heeding these do’s and don’ts will help ensure that it’s a smart investment.