When acquiring equipment for your business you have two options: hire it or buy it. Both have their pros and cons – the right option for you may depend on your company’s unique circumstances and the type of equipment.
Here are just a few questions that could help you to determine whether you should hire or buy a certain item of equipment.
How often will you use it?
Usage is a big factor to consider. If you’re only planning to use equipment once, you’re much better off hiring rather than buying something that’s just going to gather dust. However, if you’re going to be constantly using that equipment, hiring each time could be too much of a hassle.
A good example could be a van. If you only need a van for a one-off job, van hire could be a better option. If you’re constantly going to need a van for every job, buying could be a worthwhile investment.
What is your budget?
The decision to hire or buy can also depend on your budget. Buying equipment requires paying larger funds upfront, whilst hiring doesn’t require you to have lots of funds. That said, you may pay more in the long run for continuously hiring equipment than you would buying it (which goes back to the point of only hiring equipment for infrequent use).
For instance, if you’re likely to need to do some printing, but don’t have much money to spend on a printer, you may be better off outsourcing one through a printing company. Buying a printer may be a better option however if your have the funds available and are going to print documents often – hiring a printer every time could add and cost you more, even with the added cost of supplying paper and ink.
Is financing an option?
Of course, there is a way to buy equipment and spread out the cost and that way is financing. This could allow you to still own the equipment without having to pay the full amount upfront. You may pay slightly more in the long run due to interest charges, but it could work out cheaper than hiring.
Financing does require you to have a good credit score and the ability to pay back your debts on time. A low credit score may make it difficult to get accepted for finance schemes and those lenders that do take you on may hike up the interest rates. Meanwhile, missing payments could also result in extra charges.
Will you be able to maintain it?
When you buy equipment, you need to be able to maintain it. With complex equipment such as industrial manufacturing machinery, this may require extra training in order to know the necessary maintenance. That said, this could give you the freedom to fine-tune and alter machinery to your specific needs.
When hiring equipment, you can’t alter it in any way. That said, you don’t have to worry about maintenance – with the exception of some lease companies, maintenance is likely to be the responsibility of the hire company. This could save the need to train staff in maintenance.