Buying and maintaining equipment is expensive, and as soon as you invest in a piece of machinery, it’s only a matter of time before a new version comes out, making yours obsolete or inferior. Due to the high costs involved in owning and operating equipment, many small business owners opt to lease rather than own. Many entrepreneurs make mistakes while hiring or leasing equipment for their business. We recently spoke to the world-famous Business Astrologer cum Astro Strategist Hirav Shah. to guide the emerging and also established entrepreneurs regarding this.
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With everything that’s happened this year, it’s natural to have questions about your business. Any confusion or difficult YES/NO Business decision requires an expert opinion. You may be eligible for a Business check-up with Astro Strategist Hirav Shah. to make sure your business strategy in terms of Brand, Sales, Marketing, Advertising, Mergers, Diversification etc…is still on track to reach your goals. Business Astrologer Hirav Shah.’s answers have proven to be game changers.
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Speaking on the issue of Equipment leasing, Hirav Shah. says, “Since the outbreak of the COVID-19, most companies have needed to reassess the way they finance their business, especially as it pertains to the way they use and acquire equipment. With many companies and businesses looking to preserve capital, the prospect of equipment leasing or partnering with leasing equipment companies has become increasingly desirable.”
He adds, “Many businesses are now considering equipment leasing or financing to save capital if they do not have the cash flow or the credit line to buy what they need upfront, something which has become harder as a result of the Coronavirus.”
Working with leasing equipment companies can be an incredibly beneficial process, however, with many more businesses now considering this approach, it is important to be aware of some common blunders made when leasing equipment for business purposes and what you can do to avoid them.
Here are the most common mistakes to avoid while leasing equipment for your business according to Hirav Shah.
1. Going with The First Equipment Leasing Company You Find
There is a surplus of leasing equipment companies out there, many of which have their specializations and industry knowledge. Finding one that has experience in your specific sector will help you avoid many mistakes on this list. As an example, if you are looking for medical equipment such as MRI machines, finding a trusted equipment leasing company that operates in this industry will be more beneficial than working with a general leasing company. Not only will they be able to provide you with better insights on the products you need, but they will also usually be able to provide better pricing. You should thoroughly research and vet all equipment leasing companies to ensure you get the most efficient, cost-effective service.
2. Not Evaluating Your Current Needs Accurately
With everything currently going on in the world right now, estimating your current and future needs is incredibly difficult. However, overestimating or underestimating your equipment needs can lead to expensive situations. If business slows down, which in many industries is likely, the return on investment on the equipment leased will quickly diminish.
To accurately estimate your demand and your equipment requirements, you will need to compare your current situation with your previous peak times, account for likely seasonal fluctuations, and discuss these matters in detail with your equipment leasing company.
3. Not Establishing Clear Lines of Communication
Communicating effectively is more important than ever with the world in a state of flux. Many supply chains have been affected, workforces have been decimated, and most people are now working in some form of remote capacity. This makes lines of communication very valuable for business productivity. Any level of inefficiency or missed communication can lead to project delays, missed customer orders, confused employees, and much more. By finding reliable leasing equipment companies who can communicate the ongoing changes clearly and effectively, you will be in a much better position to acquire the equipment your need at the right time.
4. Not Focusing on Lease Deadlines
One common mistake that many businesses make when leasing equipment for business purposes relates to lease deadlines. Some agreements require you to notify lessors of return decisions at the end of the lease, which if not done could result in a large payment. If notification is not within the agreed-upon time frame, the equipment lease may go into an immediate renewal period. It is important you are aware of the specific details of your signed contract, and that you communicate to your equipment leasing company when you know your intentions about renewal or release.
5. Inadequate Tracking
The way to know whether you need to update your agreement or acquire a new model will be entirely reliant on how well you track your equipment usage and productivity.
Monitoring results closely is vital to ensuring you get the best return on investment. Equipment leasing is the easy part, but maximizing your usage of your equipment is critical.
Track the overall impact equipment leasing has had on your business, including business operations, the regularity of use, maintenance needs, and employee usability, to help inform future decisions. The more specific you can be with your tracking and analysis, the better informed you will be when it comes to future equipment leasing needs.
In summary, there are many mistakes that companies make when they are looking to lease equipment, however, the most damaging ones have been mentioned in this article. Once again these are:
- Not Researching Your Equipment Leasing Company
- Not Evaluating Your Current Needs Effectively
- Not Establishing Clear Lines of Communication
- Not Focusing on Lease Deadlines
- Inadequate Tracking
Partnering with the right equipment leasing company is arguably the most important part of leasing as they will help advise and educate.