The Pros And Cons Of Hiring Vs Buying Building Equipment
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Building Equipment
Whether you’re a one-person builder or a major national construction company, you’ll face the same questions and choices about whether to hire or buy your equipment.
There are pros and cons to both sides of the argument and it’s important to work out the usage ratios for the equipment that your business uses and what’s best for your unique operation.
We examine the benefits and drawbacks of hiring vs buying construction equipment to help you establish the most ideal way of meeting your equipment requirements and ensuring that you have the most profitable and productive resourcing solution.
When you buy equipment outright, it means that it’s readily available whenever you need it. This may be especially important in times of high demand. Another advantage is that the asset is on your balance sheet and may provide a tax benefit.
However, construction equipment does require a large initial capital outlay which is not always desirable, particularly in times when cash flow is tight and margins are being squeezed.
Have a look at the following list of advantages of hiring construction equipment and you can then make up your own mind whether equipment hire or purchase is the best option for your business.
COST-EFFECTIVE
With hiring, the fees are relatively low yet the benefits are substantial. You don’t have all the costs related to owning the equipment (such as registration fees, storage, maintenance, transport etc) and you’re able to put your working capital to better use. You also know what your hiring costs will be on a month-to-month basis, so budgeting is easier.
GREATER FLEXIBILITY
You only hire the equipment for the period that you need and you hire equipment that is right for a particular project, so there’s no wasted resources. With equipment hire, you have the flexibility to pick and choose what you want and when you want it. This can be particularly beneficial for those operations that experience fluctuating demand or which take on niche projects, explore new markets or do occasional jobs because specialised equipment can be brought in for relatively short periods of time.
RISK MITIGATION
Hiring is a way of mitigating the risk of investing significant amounts of money on a piece of equipment only to find that the situation changes (it could be downturn in demand, the loss of a contract, unavoidable delays in the project etc) and you are left with an expensive asset that isn’t earning its keep. In periods of uncertainty, and if you’re unsure of how much you’ll be using the equipment, it’s definitely worth considering hiring and mitigating your risk.
KEEPING UP WITH NEW TECHNOLOGIES AND AVOIDING OBSOLENCE
Once you’ve bought the equipment, you’re stuck with that technology. However, hiring gives you ready access to the latest machinery, so you can keep abreast of any new developments and pass on the benefits to your customers. Also, in many instances, building companies are able to hire better quality equipment than they could realistically afford on their own, which enables them to achieve better outcomes.
SERVICE AND MAINTENANCE
If you own your own equipment, you’ll probably need to know more about its inner workings than if you hired it. When companies hire equipment, many find that they only really need to know how to operate the machinery as the supplier handles all the maintenance, servicing and repairs. What’s more, if a piece of machinery is left idle for extended periods of time because there’s no demand for it, there is the risk that it’ll need servicing before coming back into operation. With hiring however, the equipment is in peak condition from day one.
TRY BEFORE YOU BUY
You may well end up buying your own building equipment, but hiring does give you a great opportunity to trial various makes and models without any major capital investment and long-term obligations to see which one works best for you.
Of course, the decision whether to hire or buy building equipment will depend on the nature of the work that you’re doing, your balance sheet, the level of flexibility that you desire, availability of storage space and so on, but be assured that when you hire from an established equipment hire company like Concrete Hire, you get qualified, expert advice and recommendations for the optimum solution for your individual business.
Concrete Hire has been in the business of specialised concrete equipment hire in Perth for over 20 years and has a reputation for high quality machines at affordable prices, backed by genuine and friendly customer service and attention to detail.
Concrete Hire is also the only supplier in West Australia to have its own dedicated service centre on site, staffed by fully qualified and licensed mechanics and electricians. This means fast, professional repairs and servicing including electrical testing and tagging of all types of concrete equipment, plus they offer discounted hire rates while your equipment is in for service.
For more information and a detailed list of all their concrete equipment for hire, visit www.concretehire.com.au or give Geoff a call on 1300 048 521.