Purchasing new business equipment is an expense all business owners have to deal with from time to time. Sometimes you'll be replacing just one machine while others might have to replace all of the computers in the office.
Equipment purchasing processes vary depending on the company, but all businesses must ask a few questions before buying new equipment, especially since the costs can be overwhelming.
Here's what to ask before buying new business equipment.
1. Can You Justify the Cost?
Before you start spending money on everything from office equipment to generators, consider whether or not you can justify the purchase.
To justify the cost, you have to set your own goals and identify your company's needs.
You may also want to gather employee feedback to see how important new equipment is to your employees who use the equipment.
2. Do You Need New or Used Equipment
Many companies make the mistake of only buying new equipment because it's new or to impress new hires. However, many pieces of new equipment are similar to the older versions.
Of course, new equipment may also help improve employee performance, so it's important to see what new features you might be getting.
If you can't identify any new features that can actually help your employees or your business, you can likely get by with used equipment instead.
You can easily find refurbished equipment, which will give you the same piece of equipment but at a better price point.
This is ideal for small businesses that don't have extensive resources to purchase new equipment. With used equipment, the cost is lower, and customer support might be included.
3. Will You Have to Finance the Purchase?
Many businesses take advantage of financing offers from their suppliers. However, you may not want to put your business in debt just to purchase new equipment. If you'll have the funds available and it won't impact your business's ability to run optimally, then it's typically better to purchase the equipment instead of financing it.
4. Is it Better to Rent?
In some cases, it might be better for your company to rent equipment, but you may also choose to lease. While these options sound similar, they're a little bit different.
Leasing typically has lower payments, but you don't own the equipment, and you can purchase it at the end of the contract.
However, leasing might cost you more than buying the equipment if you can afford to purchase it in the long run.
On the other hand, renting is great when your business only needs equipment on a project basis.
It can also be useful if the equipment you use in your industry becomes obsolete quickly and the manufacturer consistently comes out with new versions.
5. Is Your Vendor Affordable?
Feel free to look outside your current vendors for better deals if you think you can find them. With a quick online search, you can find a range of equipment companies that allow you to rent or buy based on your unique circumstances.
In fact, you can even find certain equipment on Amazon.
Additionally, you shouldn't base your decision on price alone. Some vendors may have higher prices but offer better customer service.
If you're loyal to your current vendors, you can always talk to them about a better deal or better warranties.
6. Does the Equipment Meet a Business Need?
All technology in your business should have a purpose and be used. If you buy something just because it's the newest version of existing technology and it doesn't improve productivity, make your employees' work more manageable, or help you somehow, it's not worth it.
For example, you can use tax software to help you manage invoices better than having an employee make invoices that may have errors.
In this case, the software helps reduce human error and save time. If you want to ensure it meets your needs, try sending out a survey to your employees and see what new equipment they are interested in.
7. Does Purchasing Equipment Enable a New Source of Revenue?
If the equipment you want to purchase won't be used for your current business offerings, consider whether or not it can help you make a profit in some other way.
If the new equipment helps you offer a new service, consider whether the new service is something that will actually interest your customers.
8. Should You Wait?
Sometimes you want to purchase new equipment, but you don't really have to. In the next few months or even a year down the line, the cost of technology may decrease, and bugs with new software may be fixed.
If you don't need the new equipment immediately, consider waiting so you can take the time to do your research and see how you can get the best deal.
Then, you can use your budget towards other office renovations.
9. Will the Equipment Work With Old Equipment?
If your machines need to communicate with one another, you must ensure all new equipment will work with old equipment.
For example, if you buy a new computer, it might not seamlessly work with your company's tablets. If buying a new piece of equipment means you have to make other upgrades, consider looking for an alternative that allows you to use a new piece of equipment with your existing infrastructure.
10. Who Will Implement New Technology?
Sometimes new technology has a learning curve, so your employees will need someone to take charge and show them how to use it.
Additionally, employees hate change, so getting new equipment could spark controversy if it's not introduced and implemented correctly.
It's typically best to put a leader in charge of introducing new equipment to the team to ensure everyone knows how to use it correctly.
11. Will the Equipment Pay for Itself?
While it might take a little math, try to estimate your ROI and how long it will take for the equipment to pay for itself and help you earn more money.
Final Thoughts: Questions To Ask Before Buying New Business Equipment
Buying new business equipment is a big decision, especially because equipment costs thousands of dollars. It's always best to ensure you need the equipment before you make a big purchase.
Additionally, weigh the pros and cons of leasing and buying equipment to help you save money where you can.