Looking around, you notice the construction industry is a booming business. Nailing the dynamics on how to acquire affordable and efficient equipment for your construction company will keep you landing hefty checks from satisfied customers.
Renting or Hiring
The decision on whether to buy or to lease construction equipment for your business depends on the cost-effectiveness of each option. Most companies today prefer hiring to purchasing them.
If your work is on contract and you require specific machinery for a particular short-term assignment, you are better off renting it. A discerning business owner conducts constant market research to determine prevailing trends and develop projections for growth.
Your initial decision to hire could change to a purchase one if you find the potential for the availability of such contracts in future. Then, you would see that purchasing would be cheaper than hiring equipment needed for a long-term engagement. Besides, you stand to lose mileage on your reputation and productivity upon winning a contract only for your company to experience delays or interruptions due to unavailability of equipment you want to hire.
Building a network of the equipment supply chains offers options when the need arises for quick acquisition of any machinery. Judging from the project’s budget, you could decide to buy the equipment for convenience and sell it off later.
Additionally, equipment requires maintenance. Buying equipment for less frequent use and incurring maintenance costs on them will push up liabilities for your business. Even when you own various equipment, hire equipment for periodic uses when the need arises.
Some rental dealers do not conduct maintenance of equipment at the appropriate intervals, and this equipment could be risky for your operations. They could break down anytime during your operations and cause unnecessary delays and interruptions, or cause accidents that could brew more trouble for you.
Your Purchasing Power
For a logical approach, analyze the cost-benefit ratio and your cash flow. If you don’t have adequate funds and need to raise more, you might need to borrow. Your borrowing power determined by your credit score will depend on some factors.
One of these is your management of your credit card credit. In case of such an eventuality, get a professional to help you compare reviews of credit card terms to help you get one with friendly terms.
Purchasing options should consider the presence of some suppliers of construction equipment from whom you can get cheap but good quality equipment. Buying old but well-maintained equipment will help your company grow its capital base without breaking the bank or getting deep into debt.
Include related running costs of the fleet into your budget. Your equipment will need personnel, inspection, replacement of parts, and the hassle and costs of moving it from one site to another. In rental deals, the dealer handles all those incidentals which lower your overheads.
In the end, your business needs well-maintained financial records showing all input and output to decide on the viability of purchase or a rental deal. The records will help draw strategies to maximize profits. The records coupled with industry research will keep you at par with changing trends. Some years down the line, your currently optional equipment might turn out to be a cardinal part of your operations.
Keep an updated inventory of your machines to know when to upgrade, sell of purchase. Maintain records of maintenance activities and inspection reports. These will keep you informed on the state of your equipment. When you need to buy, consult accredited suppliers. Take advantage of maintenance offers on new equipment purchases, and discuss various payment options to get the best deal for your money. Invest wisely.