It’s the age old question, should you rent or buy equipment in your business? On the one hand, leasing can save you money in the short term. But in the long run, it could cost a lot more. There are a number of different factors that can impact this decision but before we look at these let’s assess the overall advantages and disadvantages of each option. We’ll start with leasing.
The Pros For Leasing Your Business Equipment
By leasing your equipment, you can keep your business up to date, efficient, modern and fresh. Since you haven’t committed to a purchase, you can update whenever you like. Think of this as getting a phone on a contract rather than buying one outright. On a contract, you can get a new phone once the contract expires and stay up to date with this tech. The same is true leasing equipment. Once the lease agreement expires, you can check the market to see if there’s any upgraded equipment that could be beneficial to your business.
No Charge At First
Since you’re leasing, you can avoid those heavy fixed costs of buying the equipment from day one. Let’s say that you’re using a cloud server. If you buy your own cloud server, you could be looking at thousands for installation charges alone. By leasing, you’ll only be paying around fifty dollars each month to use a server that is already set up and operational.
Go Beyond Your Means
Don’t forget, by leasing technology, you will be able to access more expensive, arguably unaffordable options. For instance, automated software is slowly trickling into every business industry, but it’s not cheap. Leasing out this tech., you can give you the upper hand over your competition without costing your company a fortune.
The Cons For Leasing
Unfortunately, leasing does tend to mean you pay more in the long run. Depending on how long you use the tech for, you could end up paying thousands for that cloud server, but it will be spread out over a longer period. You might not notice the expense, but it will be there, dragging your business down.
You might also find yourself paying for equipment that you no longer need. If your business model is flexible, it’s possible that you’ll reach the point where you no longer need the equipment you’ve leased out. But you’ll still have to keep paying for it until the lease ends.
Don’t forget, you’re also not getting any fixed advantage from the equipment. You don’t own it, so you won’t be able to sell it on and make some of the money back that you spent once you’re finished using it.
The Pros For Buying Your Business Equipment
Simple As Can Be
Buying is easy. Once you decide what equipment you want you find the supplier selling it at the right price and arrange an order. Leasing is a tad more complicated with paperwork that you need fill out and then there are the lease agreements. You’ll need to decide how long you can use it for, how you can use it and a variety of other factors that often come into play with these contracts.
Since you own the tech or equipment you’re going to be using, you can do whatever you want with it. You’ll also find that repairs are a lot easier because you won’t have to worry about waiting for the leasing company to fix it for you. Instead, you can get your business back on track as soon as possible if the equipment does break down and avoid downtime.
Since you own it, you can add your purchases to tax deductions. These can make those heavy costs we mentioned a lot easier and ensure buying equipment doesn’t drain your accounts completely.
The Cons For Buying Your Business Equipment
The disadvantages really do depend on the type of equipment we’re talking about here. For instance, there’s the cost. The cost of buying business equipment can be expensive, but it depends on how long you’re planning to use it for. If you know it’s going to be part of your business model for a few years it might be worth the high first fixed costs. But, it could still mean you need to take out an expensive loan, and that could play havoc with your credit rating.
Then there’s the issue with depreciation and outdated equipment. Certain pieces of equipment are going to depreciate faster than others. For instance, computers will lose nearly 25 percent of their value after the first year. That also means that you could be stuck using outdated equipment that cost a fortune in a couple years of time.
For this reason, there are a number of questions you need to ask yourself before making this decision.
What Are The Tax Benefits?
We have already discussed the tax benefits of making deductions on any equipment that you buy. But there are also tax deductions available for leasing. For instance, you can may able to put the entire first cost as a deduction when leasing equipment. But, it does depend on the specific equipment and the lease in question. As such, you will need to investigate this carefully.
How Often Does The Tech Change?
In the computer world, tech changes every month, but in the agricultural industry, it can take years for tech to advance. As such, in the IT industry, it might be beneficial to lease equipment and keep up to date with changes. While for agricultural companies, a long-term investment could be the best decision and that’s just one example.
What Can You Afford?
On top of this, you need to consider what is the more affordable option for your business. It’s possible that you have the money in your accounts to buy the expensive equipment. Or, you could have the credit rating to easily handle a loan. On the other hand, you might not be in a strong financial position and if that’s the case leasing is always going to be the best possibility.
Which Is Best?
Ultimately, you will need to take all these factors into consideration when choosing whether to lease or buy. Think about how quickly technology changes, how much it will cost and the other benefits that leasing or buying could bring for your business. What you don’t want to do is make a bad business decision with your liabilities especially if your business is in it’s infancy.
4 Tasks That Your Business Should Outsource
With every period of business growth, there is more to do. Often a growth spurt can take a business owner by surprise and leave them with too much to do, and not enough time to do it.
Existing personnel are expected to take on tasks and responsibilities outside their comfort zone, and maybe you too need to upskill in areas you’ve got little hands-on experience, just to get the job done. What a recipe for ‘mountains of stress’!
Almost half of all entrepreneurs are taking too much on, and Gallup Wellbeing Index says it the women who are reporting their stress more than men. Hence, it’s hard to say which gender is better at delegation.
While there’s no single solution, mainly if the growth spurt is unpredictable, outsourcing tasks to third parties can lessen the strain on management. You may not need to use third party providers and being locked into lengthy service contracts instead look at a more flexible workforce.
Delegating appropriate tasks to freelancers or external teams allows you to focus on doing what you do best – and what makes you happy. This is leadership.
Managing everything in-house is unrealistic for most businesses today. However, some tasks require your special touch. It’s those that are too tedious, complicated or expensive that you’ll benefit from outsourcing. Here are four such functions.
There are several reasons to outsource marketing. Working with the right agency can give you a fresh perspective that’s backed up by professional insight. It will also be easier to scale up your efforts, not to mention lower overhead expenses.
Moreover, you can gain access to the latest technologies to improve efficiency and achieve more significant results, and this is especially valuable for smaller businesses that aren’t familiar with current digital trends in marketing. You can gain a significant competitive advantage by implementing a digital strategy that’s developed by experts.
In a whitepaper by Harris Poll, staff spend an average of 40% of their day handling administrative tasks. Most of it involves repetitive, menial activities that can be done by someone else for a fraction of the price. This includes data entry, document management, travel arrangements, inbox organization and proofreading.
Thanks to websites like Upwork, Fiverr and Guru, you can easily find a freelancer to do these things for you. The key is to pick someone who you can rely on to do the job right. This guide details where to start in the selection process.
As you may be aware, in-house lawyers aren’t cheap. But if you want the peace of mind that comes with knowing your business is compliant with all relevant rules and regulations, you need to have access to legal expertise. This can spare you the (much higher) cost of running into a lawsuit or another unforeseen legal issue.
These days, you can access legal services through online marketplaces like Avvo and UpCounsel, while Rocket Lawyer and LegalZoom provide legal documentation
Every new employee increases your human resource responsibilities exponentially, so it’s a good idea to consider hiring outside help. Plus, several risks come with being unable to keep up with the demands of human resources, such as failing to make payments and file documents on time, not to mention hiring the wrong employees.
Outsourcing to a provider can ease the load and reduce your risk. Depending on your circumstances, you might not need to ship off everything. For example, a payroll company can process compensation while you handle the rest.
Businesses need to be more nimble to survive recessions and staff up when business demands it. Also, make sure you’re not overloading yourself with mundane jobs. Think carefully about the tasks that take up most of your time and outsource some jobs.
5 Ways Your Business Can Slash Expenses Now
When you feel the time has come to slash business expenses to reduce overheads, then there are plenty of different approaches to achieve this goal. Needless to say, when there’s been too little attention on spending less up until now, they’ll be greater opportunities for savings. However, don’t despair – there are always a few ways to make it happen.
Here are five ways that your business can save money.
1. Purchase Recycled Office Furniture
Whether you’re wanting to replace tired desks or chairs that are now proving unstable or a new office is being equipped, it’s necessary to set the office up with what the staff needs.
While companies often only look at buying new furnishings, there is another option, and that’s used office furniture, including workstations, chairs, desks, tables. Near new workstations, for example, are a good purchase for startups with a limited budget. With more than half of all new businesses going to the wall every year, many of these companies sell off their office equipment and chattels making it a far more affordable option for businesses keen to improve their carbon footprint. Used office furniture from reputable suppliers is high-quality and often comes with a warranty.
2. Optimise the Marketing Plan
Instead of marketing across many different channels and seeing varying results with each one, try narrowing the marketing strategy down. Examine the results to determine which channels and marketing campaigns have delivered the most customers at the lowest customer acquisition cost. In case that’s unclear, the customer acquisition cost is based on the average amount that it was necessary to spend to secure one new customer.
Once you know this information, it’s possible to tweak advertising plans to only spend on the most profitable campaigns from a customer acquisition standpoint. This optimises the current marketing approach to reduce the total marketing spend while delivering the same results.
3. Reduce Recruitment Costs
Look for ideas that will cut down on recruitment costs.
For instance, ask existing outperforming staff for a recommendation of a friend or colleague who might be interested in joining the company. Also, see if there’s anyone that you’ve been impressed with who could be invited to come on board.
When you’re using recruitment consultants, get the best deal in terms of what they charge. Check around on different job boards for the industry and other alternatives. See if you can do some of the recruitment work in-house to avoid the often-extortionate recruitment fees by putting in a bit of legwork.
4. Improve Systems and Limit Staff Meetings
Most workers aren’t that productive. Repeatedly, research has shown that office workers tend to grind for half the day and lose the other half to inefficient processes and procedures, overly long meetings, excessive breaktimes, gossiping, using social media and the internet, and more.
Breakdown each role so that there are systems and processes to follow. Remove all redundant steps to cut out the time-wasting elements. Also, have the staff members suggest better ways to get their work done, which often results in time savings there too. With meetings, go in with a plan, stick to it, set a time limit on the meeting, and get everyone back to work right after.
5. Be Greener
Use green technologies and ideas to save money on energy expenses.
Look at everything from energy-efficient light bulbs, dropping PCs down from performance modes to lower energy ones, and turn off what’s not being used all the time. Ask the staff for their suggestions on other ways that the company can be greener – employees often have amazing ideas in this area that can be implemented quickly.
There are a good many ways to save money as a business. Thankfully, it doesn’t mean it’s necessary to operate like a Scrooge either.
How Agile Training Can Improve Project Performance
Project management is a complex practice that requires the many stages of planning, execution, monitoring, and others. Usually, you work with a planned set of activities that are completed in a rigid sequence, with little to no room for changes. The ultimate goal is to achieve a particular result within a specific time while considering constraints.
Over the years, the agile methodology has become more popularly used in organizations. The approach has proven to be effective in improving project performance and responding to market dynamics compared to traditional forms of project management. However, given the differences between agile and traditional styles, agile training is crucial to making the shift in management practice.
Agile is About Increment and Iteration
Agile is essentially a mindset or framework that you can adopt in your organization’s projects. It is about breaking down work into smaller and more manageable pieces called user stories that are delivered in repeated cycles called iterations.
The rationale of the approach is to have shorter cycles so that you can continuously respond to changes and adapt to them rather than trying to deliver everything in one go at the end.
As its name implies, agile refers to being able to move quickly, especially in today’s volatile market. With such an approach, you can measure performance at the end of each cycle, so you immediately know how consumers respond. Although agile was initially targeted at software development, it has, over time, emerged as a global strategy that can be used in any organization.
Benefits of Agile Methodology
Nowadays, managers are embracing the agile methodology because the short iterations help lower risk and take action at the early stages. With an agile approach, you can expect to get a higher product quality since you are frequently testing it during the development stage. Since agile is flexible, you can make adjustments and developments incrementally to improve your product.
The agile method can also help you increase customer satisfaction since you can respond to dynamic and changing needs in the market. Likewise, being able to deliver products to the market quicker will merit positive reception from the consumers. Another benefit of adopting the agile approach is that the fast iterations will help you generate quicker returns on investment (ROI).
Agile Training is Critical
To successfully adopt the agile methodology, getting agile training is crucial. In the agile approach, collaboration among team members is critical, so ensuring that each member is well-versed with the strategy will help maximize its benefits. You have to train your team to be consumer-focused so that you are always addressing needs.
There are many agile training frameworks existing today, with one of the most popular ones being Scrum. The Scrum team typically consists of a Scrum Master, Product Owner, and developers.
The Scrum Master leads the team and ensures that the development team is effectively fulfilling its goals. The Product Owner then makes decisions for the projects, which include writing the user stories. Finally, the developers create the software and conduct continuous testing throughout cycles.
With the popularity of the agile approach today, you will find several training courses available to get you started. Courses typically tackle different project life cycle frameworks, essential agile values and principles, and the roles of each team member. Once you complete your training, you will become a certified practitioner, something that will surely give you an edge in the workplace.
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