Rapid Industry Changes and the Importance of Equipment Ownership

In today's rapidly evolving industry, keeping up with technology is crucial. Equipment in my industry changes drastically and quickly, especially with the advent of the microchip, which makes things smaller these days. I would recommend, if you can, purchasing your own equipment, especially if it’s expensive equipment, kind of like what I use, which is in the million-dollar range. There are just so many more benefits to owning your own equipment versus leasing it. Ultimately, owning the right equipment can give you a significant edge in the marketplace.

Making Smart Financial Decisions on Expensive Equipment

When it comes to high-cost equipment, making the right financial decision is essential. If the equipment is very expensive, and you have the opportunity, funds, or resources to purchase it, then I recommend that you do so. In your case, it’s about machine time versus leasing or purchasing. From a financing standpoint, you have a capital lease or an operating lease. In a capital lease, you're really purchasing it anyway; you’re just paying per hour. So, for your situation, you’ve got to buy it. I have to! The lease price that I’m paying is three or four times the purchase price. Carefully weighing the costs and benefits is the key to making the right choice for your business.

Tailoring Equipment Decisions to Your Business Needs

It's important to understand that different businesses have different needs. Every situation is different when it comes to leasing versus buying. I’ve known companies that do both. There’s not really a right or wrong answer. The answer depends on what is best for your business. If you're someone that’s paying hourly to lease time on equipment and your business has grown—maybe initially you only needed a few hours, and now you're using 40 hours—then you probably should buy your equipment. As your business evolves, so do your equipment needs, making periodic reassessment necessary.

Flexibility Through Leasing in Certain Scenarios

Leasing can be a smart strategy for companies that need flexibility. However, if you own a lot of vehicles and need to keep up with the latest versions for whatever you do, like roadwork or something similar, then it might be better to lease and turn them back in when you're done. Leasing allows businesses to stay current without the long-term commitment of ownership.