1. Assess your needs
Don’t make ad hoc, isolated purchases. First review your entire production process, set your goals and realistically analyze your ability to reach them. Ask yourself fundamental questions such as: How will the equipment you plan on buying accommodate future growth and production targets? Will it help you stay ahead of your competitors in a changing marketplace?
Hiring a consultant to help you at this stage may be a worthwhile investment.
2. Line up financing first
“Many business owners hesitate to upgrade because of concerns over financing,” Grenier says. “There are many financing options out there. You just need to find the one that suits your needs, before you go shopping.”
Having the necessary financing in place gives you the time to find the right equipment and the ability to negotiate with vendors from a position of strength. External equipment financing frees up cash flow for day-to-day expenses and you can pay down debt when your business has surplus cash.
Compare the financing proposals offered by different financial institutions, but don’t focus only on interest rates. Consider other factors such as what percentage of your purchase different institutions will finance, including related expenses such as shipping, installation and employee training.
3. Shop around
Take the time to research the quality of the equipment you plan on purchasing. Make sure it can be upgraded to meet future demands. Read online reviews, ask around and visit trade shows for hands-on experience. Don’t let price alone guide your choice of suppliers. Check out their reputation and after-sales service. Industry journals and associations are also a good source of information.
Extended warranties can easily add 30% to the cost of electronics equipment and opinions vary on whether the extra expense is justified for certain products. Visit independent consumer sites for the latest information before signing up.
4. Consider used or refurbished equipment
Many good deals are available online, but make sure the manufacturer’s support, spare parts and accessories are still available. Find out why the equipment is on sale and whether it meets current health, safety and reliability standards. Compare used equipment with newer models. Will they suit your needs? Are the latest features really necessary for your operations?
Also, save money by seeking uses elsewhere in your company for the equipment that’s being replaced.
5. Don’t wait until the last minute
Don’t run your existing equipment into the ground before replacing it. Consider the cost of sudden equipment failure in terms of lost production, customer inconvenience and damaged reputation. Replacing equipment under pressure also creates the risk of higher prices and costly mistakes.
6. Keep it safe and green
Research the environmental impact of your new equipment and make sure it’s energy efficient. Not only will you help save the planet, but you’ll save money as well.
A healthy and safe work environment makes employees and companies more productive. Ensure the new equipment functions safely within your existing premises and all operators are trained to avoid mishaps.