With pros and cons to both approaches, it pays to evaluate your current situation and capabilities and your future plans then carefully consider which method of acquisition will be most advantageous to your business .Certainly, initial cost is a major factor in the decision process though it’s not the only one . There are several things to consider when it’s time to gear up.
Top on the list is your financial status. This is an almost obvious factor to consider .Do you currently have the capital to buy or is renting a better option for now? One should look beyond their current situation and project the costs over several months or years. Although buying may be a larger one-time financial outlay which can have financial implications on the company, the cost of renting can add up quickly, and over a long period of time which can end up costing you more especially if the equipment isn’t being used for the entire rental period. So when you rent, ensure you maximize usage of the equipment.
It’s also important to estimate the cost of equipment ownership versus that of renting .With ownership comes maintenance and operating costs, insurance and other fees such as government licensing. Those costs obviously vary from machine to machine. Renting on the other hand is generally an inclusive cost.
Of all the things to consider, project length or the frequency of jobs on the calendar could be the deciding factor in whether you rent or buy equipment. If it’s a short term job or you need a specialized piece of equipment for a one-off job, then renting may make more sense. The risk, of course, is that if the machine isn’t being used for the entire time it’s rented due to changes in the project schedule or unforeseen hold ups, then you’re spending money on a machine that’s sitting and waiting, not making you money. If you’re working on a long-term project or you’ve got several jobs on the horizon, then buying probably makes sense.
The big advantage of owing your own equipment is that it’s available to you 24/7 .With the concept of ‘if you own it, you control it’, you can react to unexpected changes in projects or project schedules, take on jobs at a moment’s notice and complete projects with less downtime. This might however be disadvantageous if the project will require more specialized equipment that might require you to outsource or rent the required equipment thus incurring extra costs. Therefore before you make a move, do the maths.
Managing your equipment is also something worth considering. If you have the skills and the time, you can save money over the long haul by buying some or all of your equipment and taking care of insurance, maintenance among other requirements yourself; if you don’t, you may be required to rent. The later will help know where it is, who’s running it, and you can schedule jobs and equipment accordingly.
Before you decide whether to rent or buy, you should consider acquiring a multi-purpose piece of equipment such as loaders, excavators, skid steers, forklifts and trucks that can be used for various projects .This can save you time and extra cost incurred on acquiring a totally new set of projects that could be winded up by a specialised equipment at once.