Almost every business requires using some kind of equipment in order to operate efficiently. In some cases, you may only need a laptop or a smartphone. In other cases, you may need to acquire a whole range of machines and specialist tools.
Sourcing the right equipment is important. It needs to be fit for purpose and good quality, while within budget. Below are just a few considerations and tips that can help you to choose the right equipment.
What equipment do you need?
To start with, you need to create a list of all the types of equipment you need. This list is likely to vary depending on the industry you’re planning to get into. For some startups, you won’t need a lot of equipment – you may not need to buy any equipment to launch a yoga class or an accounting business. For other startups, you may need to invest in a lot of equipment – you may need to spend tens (if not hundreds) of thousands of pounds to acquire equipment for a new farm or a factory. You can find equipment lists online telling you exactly what you need.
Should you lease equipment?
The upfront costs of buying equipment can be high. Many startups instead choose to lease equipment. You can lease anything from computers to lorries. A good lease company will supply top quality equipment, with the option to upgrade your equipment every few years when your lease ends.
The drawback of leasing is that you don’t own the equipment. You can’t sell it or modify it (although you’re generally still liable for repairs). While you don’t have to pay much initially, it can also cost more in the long run with certain types of equipment. You also can’t lease custom equipment.
Should you buy equipment?
Buying equipment can be more expensive upfront than leasing, but it has its advantages. If you need customised equipment such as custom manufacturing machinery or a custom shop sign, then often the only way to acquire it is to buy it. Buying also gives you the option to sell equipment in the future, plus you can rent your equipment out to other businesses to make extra money. You can also modify equipment more freely such as marking tools to prevent theft. There are a few different ways to buy equipment. This is worth considering before you make any purchases.
Buy used or buy new?
You can buy equipment brand new off the shelf or you can buy it from a previous owner. Used equipment tends to be more affordable, however you need to be wary of the condition. If equipment is too heavily used, it is likely to have a lot of wear and tear, which could lead to reduced performance and safety. If used equipment looks old or worn, it could also have a negative impact on your professional image. For this reason, you need to thoroughly inspect used equipment before buying it. If you can’t inspect it in person before buying it, make sure enough images are provided. Always buy from a trusted seller.
Brand new equipment is likely to be more reliable. When it comes to medical equipment such as a medical fridge or surgical monitor, it’s often better to buy brand new as a matter of safety. You can guarantee that new equipment will look good and give you a professional image. However, such equipment is generally a lot more expensive than used equipment, so you need to be sure that your budget is able to stretch this far.
Buy outright or use a loan?
You may be able to buy some equipment outright. However, when it comes to equipment worth thousands of pounds, you may find that a loan is the only option (unless you have lots of savings set aside).
Buying equipment on finance allows you to place a small deposit upfront and then pay the rest in installments. Of course, the drawback of this is the interest fees that you’ll have to pay on top. It’s worth taking the time to shop around for finance options. A business loan from the bank may have lower interest rates, however it may be more difficult to get approved for if you don’t have a good credit score.
Can you outsource it?
In some cases, you may not need to lease or buy equipment. You may be able to simply hire equipment when you need it or you may be able to outsource professionals with equipment. For example, many offices outsource printing companies to do printing for them instead of buying or leasing a printer, just as many construction firms will hire a crane and crane driver. Outsourcing is a good solution for seldomly used equipment, equipment that you don’t have the space to store or equipment that you’re not licensed to operate.
How do I choose the right equipment? There are a few simple tips to consider when choosing equipment.
Know your needs
Equipment shouldn’t be too basic for your needs, nor too complex. Work out which functions you need and how heavily you’re going to use the equipment. Make sure that you’re not splurging on surplus tools. At the same time, don’t skimp on equipment – if you’re hiring employees, make sure that there is enough equipment to share between them.
It’s worth reading reviews of machines and tools to get a good idea of how users rate them. Try to stick to commercial products that have largely positive reviews. Similarly, check out reviews of suppliers to find ones that are trusted.
When buying equipment, it’s worth considering the environmental impact. Machinery needs to be energy-efficient – this will save you money on your energy bills and help save the planet by reducing your carbon footprint. When it comes to disposable equipment, try to consider recyclable options.
Certain types of equipment are likely to be more vital than other types of equipment. If you’re on a tight budget, make sure to prioritize the most essential equipment – buy this equipment first and make sure that the quality is high. Less important equipment should be bought last when you’re at the end of your budget.