When you are investing in any sort of equipment for your business, there is a lot to think about and consider. One of the biggest decisions that you need to make is whether you are going to hire the equipment in question or purchase it outright. There is no right or wrong answer; it all depends on your business and the item in question. With that in mind, we’re going to take a look at both options in further detail to give you a helping hand.
We are going to start by taking a look at the option of hiring equipment. When you hire a tool, machine, or vehicle, you simply pay a fee for the period of use. If you are hiring something for a lengthy period of time, this cost will typically be split up into manageable monthly payments. For a lot of businesses, this is the perfect option because they cannot afford the upfront expenses that are associated with buying something outright.
Hiring is also the ideal solution if you’re only intending on using the equipment on a sporadic basis. Take crane hire as a prime example. You may only need to hire a crane for building work. Alternatively, you could run a construction firm and you may already have a set of cranes and, therefore, you may need to hire one during busy periods only. In cases like this, it makes more sense economically to go down the hiring route.
Another benefit associated with hiring is that you are not going to be responsible for maintenance or repairs. If something goes wrong with the equipment you have hired, the company will replace it as quickly as possible so that you do not experience any further hassle or expense.
While there are a lot of benefits that are associated with hiring equipment, there are some cases whereby purchasing equipment makes much more sense. This includes instances whereby the equipment in question is essential to the everyday operation of your business and so it makes more sense financially to own the equipment in question.
A lot of people also don’t like to hire or lease equipment because they feel like they are essentially throwing money down the drain. It is the same reason why some people don’t like to rent properties; they prefer to purchase their own home. They feel like they are paying for something but not receiving anything tangible for their money. While it is understandable to feel this way, you can’t, of course, purchase literally every piece of equipment that your business is going to require, so it’s all about getting the balance right.
As you can see, there are pros and cons associated with both hiring and buying. It is all about figuring out what it is going to be right for you and the current situation your business is in. It certainly does not make any sense to purchase something if you’re not going to be using it enough to achieve economies of scale.