Businesses are constantly looking for ways to avail each competitive advantage. This is why they need to evaluate the pros and cons of buying vs. renting while ensuring they remain efficient and cost-effective. While buying equipment might make sense to large businesses with all the resources to spare, most small to medium-sized companies can benefit from renting, including enjoying the latest technology and not worrying about upkeep costs.
Outlined below are five reasons why renting could save your business money.
1. Save on infrequently used equipment
Buying items and storing them until they need to be used can be very costly for your business as it holds your cash flow. Before deciding whether to buy or rent, look at how frequently you use specific equipment. If you use it throughout the year, buying it would be better. However, if it’s an item you only need at particular times of the year, renting would be a great way to save money while allowing you to get the equipment whenever required. You can read more here to understand.
2. Lower upfront costs
Buying equipment for commercial use is a significant investment that requires a lot of money. A small business might find itself getting into debt to acquire the equipment. Thanks to the renting alternative that requires a lesser initial cost, you can get all the items your business needs to keep up with operations without overspending. This protects your cash flow and keeps you liquid while having more investment opportunities.
3. Seamless equipment upgrade
As technology continues to advance, some equipment features become obsolete over time. Buying means that when your equipment is eventually outdated, it’ll make you inefficient, resulting in losses. Renting lets you address this outdated technology concern by enjoying the latest equipment with updated technology. Even if you rent a piece of equipment that becomes obsolete within a short period, the obsolescence burden won’t fall on you, saving your business some high costs.
4. Eliminate disposal costs
Owning equipment requires a thought-out plan to maintain the asset’s value in the long term. When it’s time to sell the equipment, it’s up to you to ensure you get a good value from its disposal. Renting safeguards you from the costs of equipment resale, including avoiding the preventive maintenance needed to maintain its value, marketing the resale, equipment broker costs for facilitating the resale, and low-market values associated with a downturned economy.
5. Avoids storage costs
Owning equipment comes with paying storage costs when the machines aren’t in use. This can be pretty costly, significantly increasing your business’s overheads. Ensure you have a facility big enough for large equipment to ensure long-term storage to reduce equipment damage from inclement weather. The more equipment you have, the more warehouse space you’ll need, increasing costs. Renting helps you keep overhead costs down, including minimizing storage space requirements. When you rent equipment, you can return it immediately after you’re done with it. This eliminates storage area maintenance costs and the security to secure the equipment from theft.
The decision to buy or rent comes with its pros and cons. Consider picking the renting alternative to save your business money.
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