Alternatives To Buying Expensive Equipment
A reader writes: “We are just getting started and do not have the capital or credit to purchase some of the more productive (expensive) pieces of equipment. Do you have any suggestions?”
It appears that you are trying to think outside the box to deal with challenges facing many new start-up companies. First of all, please make sure you conduct an ROI (Return on Investment) on all anticipated purchases and upgrades. Does the cost of the equipment save enough in labor costs to justify the expense? If not, then you may be over-reaching.
My first suggestion is to consider renting or leasing on a case-by-case basis. For years, I never owned a pressure washer since it was only used infrequently. I found that I could actually go down to rental store and check a new/well maintained unit for a few hours or days to perform the needed tasks. I then returned it and did not have to concern myself with storage, maintenance, wear and tear since I never owned the item. I expensed the rental out and did not worry about depreciation. Renting or leasing can be a great alternative.
People today share the costs of airplanes, boats, RV’s and other items that they only need to access a few times per year. An alternative is to consider partnering with other similar companies in your area (or the next town where you do not provide service) and go together with a “time share” concept that allocates use based on the number of days you are eligible to use it. I am sure that there is probably some websites dedicated to bringing people with such a need together. One risk, of course, is that the other partners may not maintain the equipment or cover their costs as agreed.
If you generate enough business to justify owning a piece of equipment outright then you can make a purchase and consider “leasing/renting” it out to share the costs as you grow. Your comments and feedback are always appreciated. I hope to hear from you soon. Until then, keep it clean…..
Mickey Crowe has been involved in the industry for over 35 years. He is a trainer, speaker and consultant. You can reach Mickey at 678-314-2171 or CTCG50@comcast.net.