When it comes to purchasing equipment we all would choose to buy top of the line, brand new products given the choice. Unfortunately finances and budgets are a very real thing – so real it keeps most of us from owning the luxury cars and electronics we’d like to have.
In the business world, budgets are a harsh reality when it comes to success. Financial statements required every year, and unless you’ve got a fund or financier of some type, you generally need to earn more than you spend.
There are other factors when starting a business though, like the initial costs of heavy equipment. This expense might not be made back immediately, in fact it can take a couple of years to earn your cash back on big purchases like this. That’s why it can be a good idea to limit the cost by going for a second hand purchase instead.
Today our focus is going to be on heavy machinery and equipment, where the difference between buying new and used can have even more of an impact because of the higher costs. Let’s take a look at the big 3 benefits of going the used route for large business machinery and equipment.
1. Limits the Initial Cost
Obviously there’s a cost difference between new and used equipment, with used being cheaper. For used construction equipment and other heavy machinery, this difference is even bigger because equipment costs so much more due to how big and complicated it tends to be. Limiting your start up costs can allow you to launch a business sooner and can also free up funds for other uses. These funds could be the difference between surviving and thriving, because every bit of funding matters when your business is new or growing.
2. Less Depreciation
Like most things, heavy equipment depreciates in value over time. This is because it is being used and worn down, while the marketplace continues to develop newer and better equipment with more features. Like cars, the value goes down a lot faster for new equipment than it does for used equipment, because there is a base value associated with the equipment so long as it can perform the job it’s meant for.
Above this, you can expect the equipment to lose a percentage of it’s value each year and a little more depending on how much use/wear it sees. Buying used limits how much value you lose because the biggest hits come when equipment is new. In fact, by selling at a smart time you could recoup most of your investment and replace your equipment with something a little newer/better.
3. Decreases budget requirements
Since the cost is lower, you have more choices in terms of brand, attachments, and even other pieces of equipment. Any cash saved on buying a necessary piece of core equipment can be used in other areas of the business or to add even more machinery – machinery which might not be necessary but which could either make your job easier or add value to your business and the services you provide.
Hopefully these tips help you save money and elevate your business — now and in the years to come!