Did you know that just over 36% of construction businesses survive five years or longer? That’s not a very high success rate even when compared to other small business sectors. Besides determining whether a job is profitable, the decision of whether to buy, rent, or lease equipment is one of the most important choices you’ll make. Here are some tips to help you decide which option is best for your company.
When to Buy
While owning your equipment provides you with quick and easy access, you need to determine if it’s the smartest option. How often you use a specific piece of equipment is the key to deciding if you should buy or rent. You don’t want to deplete your cash flow or use credit to buy an item that will only be needed occasionally. Buying makes good sense if the equipment is a necessity for most jobs. Purchasing used equipment is one way to lessen the financial strain on your business.
Benefits of Renting
The biggest benefit of renting is the flexibility it provides. You can rent equipment on a short-term basis without having to make a major commitment. It also allows you to try out the equipment and experiment with different brands before making a purchase. Although you want to grow your business; keeping expenses at a minimum is crucial when just starting out. Another reward of renting is it allows you to avoid the hassle of maintenance and repairs.
Why Should You Lease Equipment?
If you own a new company and don’t have the funds to purchase equipment, leasing is one option to consider. It generally gives you access to the latest models and technology without having to make a big upfront investment. The downside is you’ll end up spending more in the end. Many businesses that operate sporadically or on a seasonal basis choose to lease. This gives them access to the equipment when they need it without having the responsibility of ownership.