Business Start-Up Strategy on Buying Equipment
Start-ups are not going to be start-ups forever. They will need to grow and become a full-fledged business or brand. But to do that, the operations must be carefully defined; this part of the business must be efficient while making sure that the output is of high quality. And to make that happen, you need to invest in the right equipment.
Many start-ups make the mistake of thoughtlessly buying equipment, believing that their investors will back them up. However, remember that investors will look for justification for such expenses. You will need to prove to them that your purchases will help you and them achieve the business goals. Whether it’s the newest iMac for your art director or a semi-automatic piston filler for your lotion brand, here are some of the things to remember when buying a new piece of equipment.
What are your objectives?
Because every purchase should be justified in the eyes of the investor, you need to make sure that the new equipment will meet the common objectives. Are aiming to increase your team’s productivity? Is it the equipment that your competitor does not have and will allow you to stay ahead? Is it all about upgrading? These are the most important questions that you need to answer. And if you could answer it well, then your investor will deem that your plan is sensible.
Know the financing schemes.
Pieces of equipment, whether for the office or for the factor, tend to be expensive. And since you are conscious about your start-up’s budget, it would not be wise to blow everything up on just one item. It would be wise to look at a seller’s available financing options so that payments will not be challenging for you. Are the payments going to be implemented on a monthly or quarterly basis? Will there be any discounts if you decide to buy it with upfront cash? And how much will the interest rate be in case you buy it through credit card?
Is it okay to buy or to lease?
Another concern you need to check out is an option for leasing. Sometimes, it is much more practical to lease a piece of equipment within a certain timeframe, knowing that some tools and machines are not going to be needed forever. But if you think that you will need this equipment permanently, it may be well worth to invest in it.
Shop for suppliers.
Some equipment brands and salespeople might have already done a credentials presentation, and they may be offering attractive packages and payment terms. Do not just go for the cheapest or those that give you offers that are too good to be true. You have access to a wide variety of suppliers online, so you might as well shop around for someone that actually understands your business needs.
Get it, get it!
While it is recommended that you analyze things carefully, you are not supposed to overdo it. Do not overwhelm yourself with lots of choices, as you will surely end up picking no one. When your criteria are met, do not hesitate to work with that supplier.