There are few things more exciting in life than starting your own company, besides perhaps the birth of your first child! However, there are also few things as stressful as launching a startup because there is just so much to do and so much to consider. Among the most worrisome aspects is how to cut costs without interfering with quality and profitability. When it comes to buying the equipment or machinery you’ll need for your startup, you’ll want to seriously weigh the pros and cons of both leasing and buying. Let’s take a look at a few things which could help make the decision a bit easier for you.
How Often Will the Technology Need to Be Updated?
If you need a machine that relies on advancing technology, it might be in your best interest to lease that machine. By so doing, you will probably get those updates as part of the lease package deal. When buying a machine you may have a time period in which updates are included but after the ‘warranty’ period, you are on your own when it comes to making those updates or being left behind.
How Limited Is Your Budget?
Sometimes it’s cheaper to lease or buy a pre-owned machine than it is to buy a new one outright. As a startup, you may not have stellar credit yet so your payments may have higher interest rates when buying new equipment. On the other hand, leasing may also require you to have sufficient credit, but usually, you can slide by a bit easier than when owning a machine. After all, when it’s leased it is still the property of the manufacturer or distributor. If you are working with a limited budget, it might be better to look for pre-owned machines that are a fraction of the cost when available.
Are There Pre-Owned Machines Available?
This leads us to another important consideration. Are there pre-owned machines available? Let’s say your startup is a machine shop that will specialize in the manufacturing of medical equipment. One of the most important pieces of equipment will be a swaging machine. These form smooth conical shapes with precision and are best suited when manufacturing tubes, catheters and stents, for example. Swaging machines must be of the highest quality and completely guaranteed like those from Empire Machinery. Whether you can find them pre-owned or buy them new, pre-owned would cost less but would they be of suitable quality? Some from reputable companies are warranted, but can you trust an industry ad placed by a machine shop going out of business?
Whether or not you lease or buy equipment, remember that buying is really often the cheapest route in the long run. Leasing sounds like a good deal but that buyout option might be inordinately high, adding thousands to the end cost. Usually, it depends on how much working capital you have and whether or not a particular machine will need regular updates. The choice is yours, but whenever possible, owning is always the best choice. Your company – your machinery! It’s that simple.