When you are starting any type of business, buying equipment is one of the three biggest tasks and expenses you have. From the start, you need to choose the best in a price range that fits your budget, and sometimes this can be problematic if you are not an expert in the field. Also, sometimes it seems to you that you don’t have enough money to buy everything and then you think about alternatives.
But if you think that once you solve that task at the beginning, that you no longer have any obligations regarding the equipment, you are grossly mistaken. You always have to have new models to be competitive in the market. And a particularly big deal is buying heavy construction equipment. The business in which you use this type of equipment is incomparably more serious than, for example, buying a coffee machine to open a coffee shop. Since the prices of heavy construction equipment are very high, many entrepreneurs are considering whether it is better to buy them or rent them. Since there is no simple answer to this question, we will compare the pros and cons of renting to make it easier for you to decide.
1.Reduced initial investment
The initial investment can be very large, especially when it comes to something that involves heavy machinery. Since that is what you need, your initial investment can be up to several hundred thousand dollars if you decide to buy everything instead of rent. This is such a large sum that there is realistic possibility that you simply do not start your own business at all, but give up because that is far too much for you. If you still somehow raise money to buy everything, it will take you years and years until it all pays off for you. And until then, you will be in debt or working without profit which will be very challenging. If, on the other hand, you decide to rent all that, your initial investment will be 10 times lower. This then allows you much more business flexibility, both in making short and long term plans, because you are not indebted.
2. You can’t make a mistake in your choice
When you decide to buy, you surely research in detail if that is the right piece of equipment you need. But until you start using it you can’t know if that’s exactly what you needed. And then it’s too late. But if you rent, then if something doesn’t suit you, you simply replace it. Rental companies, such as Arnold’s Rental Equipment, always have a great offer and you can, after a few uses, return what does not meet your needs and take something else. And when you buy, the only option is to sell, and there you will surely lose part of the money.
3. You can accept any job
You certainly won’t buy very expensive equipment which is required for just one job. That is why it will often happen that you refuse jobs, because it is unprofitable for you to accept them because you do not have everything you need to do it. When renting, you will be able to accept any job, because you rent what you need for that particular job and that’s it. You will make money and create a very positive company reputation so customers will know they can always count on you, because you don’t turn down any job. This is literally impossible when you buy everything.
4. You don’t have to think about maintenance
Maintaining heavy machinery is a very demanding job, because due to the nature and scope of the work that heavy machinery do, breakdowns are common. And even if there is no breakdown, it must be maintained regularly, so that major failures do not occur, the repair of which will cost you a lot. This is so when you buy equipment, but when you rent it, then maintenance is the responsibility of the rental company, not yours. Also, they are insurance carriers, so they are liable for anything that could potentially happen, such as work-related injuries, which are not uncommon in these jobs at all. It’s up to you to do your job, and everything else is the responsibility of the company you rent from.
5. Always have the latest machinery at your disposal
When you decide to buy machinery, you will certainly not change it for at least 5 to 10 years, because it is necessary that this investment pays off before you buy something new. This means that most of the time you will work with equipment that is not the latest, but after a few years will be considered obsolete. This is inevitable, because if you constantly buy the latest, it would never pay off to you. If you want to have all the latest, then rent. Rental companies are constantly buying all the latest, in order to be competitive, so it is up to you to take advantage of that.
1.Long-term rental is not profitable
Rental is an ideal option for all those who accept most or all of the jobs offered to them and then move on to the next. Then the rent will be for a short period of time and it will be very profitable. But if, for example, you are constantly using an excavator, then it is better to buy one. Long-term rental is unprofitable, because it will be much more expensive than if you bought it, and in the end you will not have an excavator left that you can sell and even get back some of the money you invested in buying.
2. You run the risk of equipment not being available
Rental companies can’t have an infinite number of machinery, so it can happen that they don’t have what you need at the moment. It has already been rented and who knows when it will be available. This happens especially often in the summer, when it is peak. This can incur large additional costs for you, as you will pay penalties to the client for being late in getting the job done.
As you can see there are a lot of advantages and also a few disadvantages. And those cons are easy to avoid if you analyze your needs and make the right decision. Also, remember that you can buy what you use the most and rent the rest. So you will find the ideal balance that way.