In businesses as in life, the guiding principle is ‘what you sow, so you reap.’ The nature of your initial and on-going investment in your small business will determine its eventual success or failure. Since small businesses have to make do with very little, what they make do with should be reliable, if not exceptional.
This applies to the type of staff you hire and the kind of equipment you use. It’s called an ‘investment’ for a reason One key investment that every small business has to contend with is equipment acquisition.
There are a number of factors that influence the choice of equipment–the so-called ‘tools of the trade’—each of which hinges on a proper understanding of exactly what ‘investing in’ something entails. What is an investment? An investment can be defined as a good that you buy or acquire today, not with the intention of consuming it, but in order to generate wealth in the future.
This definition implies that every good thus acquired must contribute in a specific, delineable way to your business’s goals—be they short-term, medium-term, or long-term. Factors to consider
- Feasibility: When procuring equipment, do your research. Talk to suppliers, employees, other businesses in your sector to get a sense of what type or brand of equipment is best suited to your purposes.There’s nothing worse than bringing something on board, only to find that it won’t function optimally in your work environment. Often it is professionals in the field who can guide you best when deciding which equipment to invest in.
- Readymade vs. customized: Building on the question of the overall suitability of a particular piece of hardware or machinery is the issue adaptability. You must determine which iteration of that type of equipment would best serve your business needs. If you are unable to find an exact fit in any of the existing models, you might decide that a particular piece can be adapted to your workspace with a couple of tweaks. You could choose to get it customized, instead of buying it as is, if the manufacturer has that option.
- Longevity: Establish the equipment’s shelf life right off the bat. How long has it been built to last? Planned obsolescence, or the period of time that an object is designed to function, is a critical factor in the decision-making process. Is it meant to last one year or five years? Can its use be prolonged under certain circumstances? In other words, is it a long-term investment?
- Lease or buy Once you decide on the type of equipment you want, whether you want it customized, and how long you can expect to use it, you will be in a position to address another critical question: should you lease or buy? If you find that you will only be able to realize cost savings two to three years into the future, you will need to account for depreciation. You might then find that it’s cheaper to rent or lease, rather than buy, the equipment outright.
These points are central to the kind of equipment you invest in, and the type of investment instrument you choose. If you do your research and explore both the benefits and drawbacks, you should be able to come to an investment decision that works for your business.