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Management

Business Equipment – Lease or Buy?

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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.

Absolute Control

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.

Awesome Deductions

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.

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Management

Business Tips You Need To Know As a Small Business Owner

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There are various strategies that business owners embrace to stand out in the market. From staying focused, getting creative, and finding ways to surpass competitors, these strategies boost businesses to greater lengths.

When it comes to operating a small business, you need to adopt a flexible approach as customers build trust with you. Thankfully, due to an upsurge of digital commerce platforms, it is much easier to get valuable business tips online. Let’s discuss some prominent business strategies you should consider for repeat success.

6 Tips For Growing Your Small Business

Make Realistic Goals

The biggest hindrance that pulls down businesses is lack of practical objectives. Sometimes, in the excitement of a new business, owners come up with huge, unattainable goals. The best approach to use is to break down your progress in a matter of months and years. For instance, you can forecast the number of followers you want to attain on your Facebook page after a month, one year, or even a decade. When you understand what you want to achieve, it is easier to navigate your business operations as you pursue it.

Concentrate on Your Strengths

There is a history of companies using different approaches to success. The strategy may work better with big companies that can afford diversification but may fail with small enterprises. As a small business manoeuvre through the growing process, it is wise to concentrate on one thing at a time.

Remember that each specialization costs money, for example, you will need to invest in marketing and advertising and if relevant, also branding and packaging. The best thing to do is to focus on a profitable niche and work around it for your breakthrough.

Understand the Legal Requirements

In any business, there are various government rules stipulated based on size, industry, and location. There is a high chance of facing heavy penalties if one fails to follow the rules to the letter.

The laws start from the business launch where you have to register with the state. You then have to pay your taxes on time and keep records. When you start hiring your employees, there is also a list of regulations that you must follow to protect both of you.

Keep in mind that as your business grows, some of your workers may violate some of these laws. For example, by illegitimate means, they may try to embezzle funds from your company. In such situations or any other instances that involve the law; your business will benefit from engaging a reliable lawyer to handle it for you.

Learn to Delegate

As you start running your business, you may find it convenient to handle all departments. However, as the business thrives, it is a struggle to balance everything without burning out.

When you are not in the right state of mind, you may not manage to push your business to the success you desire. As a result, your reputation may get affected as you head to losses. That’s the worst mistake for any type of business and especially a growing one.

As a business entrepreneur, you should introduce a tradition of effectively giving instructions to your juniors and partners. By using that approach, your business will progress well, even in your absence.

Surround Yourself with a Reliable Support System

As a business owner, operations may isolate you from what is happening around in the market. The main focus of keeping in touch with other business owners within your niche is to share in-depth information beneficial to all. From such interactions, you may learn the techniques they used to enhance their operations.

Sometimes, you can also seek advice on the best suppliers or vital documentation processes when branching out. Do not fear to share your failures with dependable people who can help you out. It might not be easy to get time to network, but if you manage to maintain trustworthy contact, your business will thank you for that.

Strive to Satisfy Your Customers

As much as you invest immeasurable time and money in your business, without customers, everything is a waste. A happy customer will always come back and refer to others. For a satisfying experience for all, you should initiate fulfilling approaches in all departments. Start by coming up with a customer care desk that handles queries and complaints.

Take advantage of online platforms to reach out to your old and potential clients. You can also get out of your comfort zone and introduce creative and amusing ways to attract more clients. For instance, if you are running a hotel, you can give discounts on specific menus or introduce a happy hour.

Make it a habit to follow up on your customers and confirm their satisfaction with your services or products. In the end, your customer-focused approach would pay off as you significantly reach out to please them.

Did you enjoy our exhaustive guidelines on how to run your small business effectively?

Follow our future advice on how to enhance your business while avoiding grave mistakes within your industry.

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Management

Wise Words Before Starting A Business

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Preparing yourself for a new role business is vital. There is no room for ‘winging-it’ even when it’s your own company! First impressions matter most, so you’ll want to hit the ground running with the wisdom, education and right mindset to face off the many challenges that will come your way. To top it off, you will need to know how to navigate your startup during tough trading times like an economic recession or pandemic!

Rather annoyingly, no one set rulebook can help you with starting a business, and there’s no blueprint to follow as no entrepreneur’s journey is ever the same.

Despite all that, there are things that many business people wish they knew before embarking on such an endeavor. In this article, we give our wise words on can make the difference between taking the straight or winding road to success with a new business.

Money Isn’t Everything

While it’s possible to get by without sound financial acumen, it’s really not where you should want to be when you’re the owner of a business. Even if numbers don’t come naturally to you learn and appreciate the financial statement and other important metrics like profit and loss. When you are competent with the balance sheet of your startup, you can dig deeper and know exactly what it is going to take to make your startup stable. For example, cash flow is king – not capital. Many early businesses have been able to raise a sizeable amount of investment and grow the revenue, but despite this, these businesses have eventually failed.

Cash flow keeps the wheels turning in a business

With ample working capital derived from cash flow, you can focus on improving the business while your team works in it.

Strategic planning to avoid troughs and peaks that threaten your service levels and thus, business reputation is an example of working on the business.

Worrying about money is detrimental to productivity, and with great cash-flow, workers are paid, marketing continues, sales go up, and your business can go from surviving to thriving.

Get An Education

Just like with money – education isn’t everything, but it will give you the confidence to make the right business decisions. Business is no walk in the park. You will need to arm yourself with skills and in areas that are currently foreign to you. Formal tertiary degrees and courses, provide the foundation from which you can grow as a business manager.

Education provider, Victoria University Online say it takes less time to get an MBA when you do it online. These courses can either give you an overview of the business to enable you to be competent and confident with all aspects of the business. Alternatively, you can choose to study a specification so that you can get expert insight and understanding into a more focused department, such as finances and leadership.

It’s also a good idea to learn some of the key skills and characteristics that many businesspeople have, such as critical thinking, problem-solving skills, and good communication.

Shouldn’t Be Work All The Time.

It can be tempting as a business owner to put all your energy into making your business a success; however, putting in over 12+ hours a day can be detrimental as it may mean you’ll suffer from burnout.

Burnout will make you extremely unproductive and can force you to make bad decisions, so you must get that right work/life balance. Working fewer hours, or appropriate hours, will help you streamline your operations and make you more efficient, and a good way to do that is through various automated software.

Separate Yourself From The Business

Business owners at some stage look to move on, and thus they have an ‘exit plan’ to sell up. Knowing how to, and when to start to ease back, so the business is a valuable asset for sale without them in it is challenging, and this is when an exit strategist is required.

Your exit strategy should be part of your overall business plan and thus from the first day onwards you’re aware that you’re not the business but an employee and shareholder within it. Are you inspired to forge ahead with a startup? See our inspirational quotes.

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Management

4 Tasks That Your Business Should Outsource

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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.

Marketing

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.

Admin

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.

Legal

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

Human Resources

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.

Conclusion

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.

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