There are many upfront costs to starting a business. Acquiring equipment is often one of the biggest costs for many startups. Here are a few ways in which you can make starting a business more affordable.
Buy, finance or lease?
Few business owners have the funds to buy equipment in cash, although this can be the cheapest method in the long run. You could consider taking the time to save up money, but this could take a while when saving up for expensive equipment and may not be ideal if you want to get stuck in as soon as possible.
Buying equipment on finance is a common option. This allows you to pay for expensive equipment in instalments over several years, although you’ll likely have to pay interest on top. It’s worth shopping around in order to find the lowest interest rates – this guide at Simply Business compares a few options.
Leasing equipment is another option. In this case, you don’t physically own the equipment – you simply pay a monthly charge to rent it. At the end of your lease, you have the option to upgrade to newer equipment, which can be a bonus. Some lease companies may not even require a deposit. You could pay more in the long run however than any other funding strategy and don’t have the freedom to sell equipment.
Shop around for discounts
You can often save money on business equipment by taking the time to shop around for discounts. A few places where you can find great discounts include:
- Clearance sales: Clearance sales as found at ScripHessco can be a great place to find huge discounts on business equipment. This is a great way to save money on brand new, good quality equipment.
- Seasonal discounts: Certain equipment may be less popular to buy during certain seasons such as desk fans in winter. Such equipment is also likely to be cheaper out of season as a way of attracting customers during these dry periods.
- Used equipment: Used equipment is often a lot of cheaper than new equipment. Such equipment can be in poorer condition and you may not be able to get a warranty, which is something to always factor in. It’s best to buy only from trusted sellers with good reviews.
Factor in the running costs
While there are lots of ways to save money on upfront costs, this can sometimes result in higher costs in the long run. For instance, buying a used commercial coffee machine on finance could save you a lot of money initially – but such a machine could require more frequent repairs due to its previous usage, plus you’ll have to afford the loan repayments and interest charges each month.
Energy-efficiency is also something to consider when buying old machinery. You could find that an older machine consumes more electricity and increases your energy bills. Newer machines tend to be more energy-efficient and could save you money in the future.