For most business owners, equipment acquisition happens in the break/fix moment. Recent research points to more than 65% of all small business owners replacing equipment only when absolutely necessary. But with the significant price of this equipment and the enormity of downtime expenses, is this the right approach?
The Downside of Waiting Until You Have to Replace Equipment
Running an asset “until the wheels fall off” or close might be a very expensive strategy. Maintenance expense can be a monster, but downtime is the real killer. Most business equipment is a source of revenue. If it isn’t a source of revenue, it’s still counted on for operating efficiency. Hours or days of downtime in these circumstances costs big bucks, not just in lost productivity but in rental and other real-dollar costs.
Understanding Your Equipment
If running equipment as long as conceivable is not an option, when is the right time to replace equipment? The answer depends on the equipment and how you use it. To avoid some of the real pitfalls of aged equipment and its downtime, you have to first look at each class of equipment you need and how you use it. For technology, the cycle may be two years and for some construction equipment it may be 15 years. But we’ve seen trucking companies that replace tractors every 24 months and replace laptops every three years. It all really depends on the unique nature of your business.
A Better Way?
A lifecycle management approach to acquire, finance, manage and dispose of your commercial equipment just might be an attractive alternative for you. Working with a combination of your equipment sales partners and a strategic finance partner, you can actually develop a program – customized for your company – that provides the best way to acquire equipment affordably while maximizing uptime and staying on the cutting edge of technology.
At LEAF, we help business owners acquire equipment with competitive financing that is simple and fast. We can help you avoid the expense and fire drill of the break/fix moment with an affordable approach to acquiring new equipment. If you would like to learn more, contact us today.