Daily Archives: June 5, 2016

3 Things You Need To Think About Before Buying New Equipment

3 Things You Need To Think About Before Buying New Equipment

For most companies the purchase of new equipment is not a decision to be taken lightly. Machinery and equipment can cost thousands of pounds and while it may be necessary, it can also be a significant drain on resources. When making a decision about whether or not to purchase new assets, it is important to think about how the machine will be used and whether it will result in increased capacity or output, as well as whether it will be affordable over the long run. Take a look at these considerations you need to take into account when deciding to purchase new equipment.

1. Financial Situation

If your company has considerable cash reserves that can be spent on new equipment, the asset can be purchased outright so that it is owned by the company from the start. However, not every company is in this situation and many will have cashflow worries. The purchase of a new piece of equipment would result in money being taken away from other areas of the business, and may result in bills being unpaid or lower investment in other sectors. There are many asset finance options that help in these cases, which will assist in spreading the cost of buying the new asset over many months, leaving cash for the day to day running of the business. You should consider the financial situation of your business before deciding on whether to buy new equipment, and how to finance it.

2. Growth and Use

Consider how well the piece of new equipment will fit in with your business in the coming months and years. Do you see how you will use it, and how it will bring in more work in order to justify the purchase or hire cost? Put simply, will you use it enough to make it worth the purchase? Will it help your company in the long term and thus be a benefit rather than a drain on resources? On the other hand, if you have so much work you can’t see how you will handle it, it is worth looking at upscaling or multiplying the amount of equipment that you need.

3. Running Costs

You also need to take into account the running costs of a piece of equipment so that you understand how much it will cost you over the life of the equipment. Compare running costs with the machinery you already own, and against similar items, so you know the overall cost and how it will affect your business in the future.

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