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Is It Time for New Equipment?

Whether it is a new copy machine or a new oven for your bakery, buying equipment is a costly endeavor. There are many decisions to be made including whether or not you really need to buy or if it can it be fixed. Spending money unnecessarily is never good, but often it is necessary to spend money to grow, or even to just stay in operation. How do you know if you need to buy new equipment or wait a bit longer?

Are You Losing Profit?
Why do you want new equipment? Do you need it to handle growth? Then go for it! If the money spent is going to create new profit then not spending it is going to cost you that profit and the decision is a no brainer. You are in the prime of your business and this is a do or die risk. Take the plunge and allow your business to grow if everything else falls in to place.
Is your current equipment non-operational with no hope of salvage? Can the business run successfully without it? If not, then replace it. You cannot run a bakery without ovens or a monogram shop without a monogram machine, right?
Can You Fix It?
The question comes when you have working equipment but it is old, or in poor condition, or there is a question as to whether or not it can be fixed. If it works, the best bet is to let it keep working and put your money into other things. The exception to this is if it is inevitable that it is going to stop working, or could stop working, at any time. If that would disrupt business and cause a loss of profit, and funds are available, replacing now rather than later is probably wise. If it is currently broken and it is going to be expensive to fix, or it could keep breaking and needing to be repaired over and over, that is another time that it might be better to go ahead and purchase new equipment.
However, if your equipment is under warranty or the fix is an easy one that will keep it working for years to come, think long and hard before putting out cash or taking on debt for a new piece of equipment that may not be needed. 
Equipment Financing
Start researching business equipment financing now before you are faced with the need to use it. Know what is required of you to be able to access such financing and be prepared with good credit and collateral if needed.

This article was originally published by Biz2Credit

Published: March 17, 2015

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