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.
Is Social Entrepreneurism Right For Your Business?
Social entrepreneurism is used by for profit entrepreneurs and also not for profit startups. It’s popular and a considerable number of ‘for profit’ companies are also incorporating social entrepreneurship into their business strategies as a way of giving back to society.
However, social entrepreneurship isn’t clearly defined and thus it’s meaning mis-interpreted, and misused particularly in marketing initiatives.
Let’s look at it in more detail and examine the advantages or disadvantages of launching a social enterprise.
What Is A Social Enterprise?
A basic definition of social entrepreneurship is an organization which operates in order to identify, create and implement solutions to social problems. Of course, the wide-ranging nature of social problems means that social enterprises can be focused on hundreds of areas.
Whether it focuses on poverty, homelessness, health or the environment, a social enterprise typically aims to promote a cause, alleviate suffering and/or resolve serious problems which are affecting communities, countries or the population as a whole.
Why It’s Popular
Social entrepreneurship has really taken off in recent years and companies which align themselves with positive values appeal to customers. Those among us who are more discerning about where we chose to shop and what we buy, will chose the ‘feel good’ that comes with knowing our purchase can indirectly improve the conditions of those less fortunate.
If you’re a purchaser who often feels guilty for buying for yourself, then knowing your purchase is not solely about you is all you need for guilt free pleasure. Plus the feel good experience, motivates you to share it with friends, family and followers in social media. It’s a reason to buy from the same company, time and time again, and every business wants a repeat customer.
Should It Be Where I Focus My Business?
Labelling yourself a social entrepreneur can be a savvy business decision. However it’s also a responsibility that you must fully commit to, as it requires a bonafide desire to make a difference.
Commit To It
Dedicating resources and some of your business profit to social causes is not for everyone. A halfhearted approach may backfire too if your business fails to follow through in any way.
We know how fast a business can be destroyed through carelessness. Who doesn’t remember Ratner’s fall from grace and it’s reputation irreparable.
Consumers are becoming accustomed to a whole host of organizations identifying as social enterprises and the media spotlight means self-proclaimed social enterprises do need to back-up their claims with clear goals, actions, and results.
Positives Of A Social Enterprise
Becoming a social entrepreneur can have many benefits and it can be extremely rewarding.
By identifying a worthy cause which needs exposure so it receives the support to make a difference to people’s lives, your business can help to alleviate a genuine social, culture or environmental problem.
Regardless of the size of your organization, knowing you’re helping to resolve a harmful issue can be rewarding on a personal and professional level.
Free PR, Discounted Marketing & Advertising
Perhaps more cynically, incorporate a social enterprise objective into your organization can garner positive PR.
Aligning yourself with a worthwhile cause can lead to free or reduced-cost advertising, and it can certainly help to gain support from similarly-minded individuals.
In some cases, social enterprises can benefit from tax breaks too so there could be a financial incentive to take a professional interest in social issues.
If your organization operates as a non-profit or eco-friendly enterprise, there may be certain grants you’re entitled too as well, not to mention PR-friendly awards you could be eligible for.
With so many benefits surrounding social entrepreneurship, declaring your organization a social enterprise may seem like a no-brainer. However, there are some disadvantages which can arise from social entrepreneurship.
As well as meeting your legal obligations as a company director or owner, you may need to fulfil additional requirements if you’re operating as a social enterprise. There are often strict guidelines which must be adhered to if you claim to operate for the benefit of cause and you’ll be expected to back up your claims with evidence.
Are There Conflicts Of Interest Between A Social Enterprise Versus A For Profit Business?
Not necessarily. A non-profit organization may run as a social enterprise but this doesn’t prevent for-profit businesses from incorporating social entrepreneurship into their for-profit business strategy.
Inevitably, a percentage of your revenue will need to go towards a particular cause if you claim to be supporting it but this doesn’t prevent your company from continuing to make a profit as well.
As the number of social entrepreneurs continues to grow, the definition of social entrepreneurism continues to evolve. Whilst there are a number of considerations to take into account before declaring yourself a social entrepreneur, adding a social enterprise element to your business or launching or non-profit organization can be beneficial for you, your business and your chosen cause.
What You Should Know Before Hiring an Independent Contractor
Are you thinking of hiring independent contractors?
Hiring contractors is a budget-friendly way to help support your small business. They allow you to get your business done and grow your company, without the legal and financial hassle of bringing on full-time, salaried employees.
Freelancing is taking off as more and more people want freedom in their work schedules. So there is plenty of talent out there to help your business succeed.
But hiring an independent contractor can be tricky, so don’t make any offers before you do some research and know what you’re getting into. Keep reading to learn more about what you need to do before hiring an independent contractor.
Five Steps to Hiring an Independent Contractor
Independent contractors and freelancers can help your business thrive, but you shouldn’t hire just anyone. Certain forms need to be filled out, and there are unique rules when tax time comes around.
If you’re new to working with contractors, here are five steps you’ll need to take before bringing on independent contractors:
1. Always Check Credentials
There are a lot of great contractors out there, but make sure you always vet your candidates before you make any official offers. A lousy contractor could cause some legal trouble down the road.
Always ask for a copy of their resume and to see past examples of their work. You likely wouldn’t hire a full-time employee without meeting them, checking their references and making sure they’re legitimate.
2. Fill Out The Proper New Hire Paperwork
Just like full-time employees, contractors have paperwork that needs to be filled out before they can start legally working for your business. Make sure you have a W-9 form filled out for them. This form is the contractor’s equivalent to a W-4.
3. Make Sure You Sign a Contract
Before your contractor does any work for you, you should have some form of contract or work agreement in place. This will keep you safe legally and hopefully prevent any disputes later on.
4. Paying the Contractor
Paying your independent contractor isn’t that complicated. You can either have them charge you hourly or agree on a flat rate per project. The exact price and method of payment should be agreed upon before the project starts and laid out explicitly in your contract that you both sign.
All you have to do is make sure that you accurately record every payment that you send to your contractors, and pay stubs is an easy way to do this. You can generate pay stubs online by going to a website like https://www.thepaystubs.com.
5. Give Them Proper Tax Documents
If you pay your independent contractors more than $600 in a year, you’ll need to give them a 1099-MISC form and include the total amount that they were paid. They will need this form and information to properly file their taxes.
Learn More About Running a Small Business
Hiring an independent contractor might seem complicated, but it’s easy to do if you remember a few simple things. The extra help will mean that you can focus on doing other things and helping your business succeed.
Check out the rest of our website for more helpful business tips. We have articles ranging from finance to marketing and sales!
Contributing to a Healthier Planet Through Event Sustainability
Have you ever thought about the waste that big events leave behind? When there is a concert, a big game in town, or even a corporate event, like an expo, have you ever thought about all the plastic used, like drink bottles, eating utensils, plates etc. You’d be forgiven for not considering it, however, now more than ever, it’s a question being asked.
Society is putting some thinking on the environmental impacts of events, alongside their societal, economic and sometimes – depending on the type of the event – political impacts, and the development of standards such as ISO 20121 proves precisely that.
Even though events planning and management might sound like a fairly contemporary idea and business activity, it is in fact very old. Since early humans started to get organized into groups, the idea of rituals was born, and thus the organization of “events” took place. Then, when the society started to get hierarchized, royalty would have extravagant weddings, birthdays, celebrations, funerals and so on.
In other words, even though perhaps the nomenclature did not exist as such, events were planned and organized from a long time ago.
With the evolution and the sophistication of societies, events planning took a whole new dimension and it got more complex.
One of these dimensions is also the environmental footprint that events, especially big ones leave behind. This matter was materialized in all its seriousness in 2012, during the London Olympics, when the Organizing Committee implemented the freshly developed ISO 20121 – the first international standard on sustainable events.
The standard was developed by ISO during the time of the London Olympics because sustainability was a central idea in London 2012.
While the International Organization for Standardization (ISO) has a myriad of standards concerning the environment and environmental management, such as:
– ISO 14001 – Environmental Management System;
– ISO 50001 – Energy Management System;
– ISO 14015 – Environmental Assessment of Sites and Organizations;
– ISO 14063 – Environmental Communication;
– ISO 14031 – Environmental Performance Evaluation and many more.
However, ISO 20121 is very specific to events, and offers guidance on how to organize an event with a minimum environmental footprint while enhancing productivity and efficiency, saving costs and increasing profit.
While being aligned with other management systems standards, such as ISO 14001 and ISO 9001, ISO 20121 is also a very good management tool to show social responsibility, or the “People” bottom line of the “Triple Bottom Lines”, famously known as the “three P’s of Sustainability”.
It is a very interesting approach to sustainability, because it does not undermine the importance of profitability, while putting the same weight on sustainability and social responsibility.
The TBL or “Triple Bottom Line”, or “Three P’s” stand for three bottom lines that a company should take into account, and which measure a company’s success: Profit, People and the Planet.
In an article on ISO 20121, the three P’s and the “Plan-Do-Check-Act” cycle, it is argued that an events management company can integrate these three and tackle a number of issues with one solution: implementing and maintaining ISO 20121.
Some of the more general benefits of implementing ISO 20121 for sustainable events include:
- Reduced environmental footprint
- Cost Reduction
- Increased efficiency
- Reduced energy consumption
- Increase labor productivity and motivation
- Improved image by proving to be socially reliable
- Possibility to integrate several management systems
Moreover, while the urgency and imminence of the effects of global warming and climate change are the main reason of investing in the implementation and maintenance of the ISO 20121, the latter is also a very good PR tool which can be used to display how responsible an organization that organizes events is towards the future of the planet and the future generations.
As environmental issues have never been paid more attention to, people all over the world, both in developed and developing countries are being careful and increasingly showing interest towards doing their part to contribute to the global effort of saving the planet.
In this sense, a company which showcases interest, to the point of investing time and resources in being environmentally responsible, to interjecting their input in this matter of cardinal importance, shows alignment with the contemporary values and principles of their clientele.
If we look at it closely, a company or organization which organizes big events implements a standard like ISO 20121 and commits to not polluting the environment through their business operations, is not committing to “clean” the environment, but rather to leave it as it is. It is rather a matter of balanced principle of non-interference than a heroic act of salvation.
About the Author
Julian Kuci is the Marketing Quality Assurance Manager at PECB. He is a graduate of RIT in Economics & Statistics and Public Policy & Governance. Julian holds a diploma in Transitional Justice from the Regional School of Transitional Justice and is certified against ISO 9001 – Quality Management and ISO/IEC 27001- Information Security Management.
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