Starting a business can be expensive, especially if you need bespoke equipment to get the show on the road. Computers are not so expensive these days, but if you want to invest in some top-of-the-range Apple Macs to power your graphic design agency or you need lasers for a beauty salon, the costs will soon begin to bust your budget. The good news is that there are several ways you can save money and maintain a positive cash flow for your startup.
Haggle for the Cheapest Prices
Never pay what’s on the ticket, as there is always room for maneuver when buying expensive technology. Most retailers will offer some leeway in terms of pricing. The more expensive the item is, the more likely you are to secure a discount.
Before buying anything, always check the average price, so you know exactly what you should be paying, as opposed to what the retailer is expecting you to pay. Forewarned is forearmed. Be polite but firm when haggling over a price, and be willing to walk away if the vendor won’t budge.
Compare Financing Options
Some purchases will need financing, but if you don’t do your homework, you could end up being taken for a ride. Compare financing options when looking to purchase expensive equipment. There are likely to be numerous deals on the table, both from the vendor or the manufacturer and from loan companies.
Read the small print, check interest rates, terms & conditions, fees, and down payment amounts. There is no point in signing up to a deal that offers cheap repayments if it comes with a huge balloon payment in 12-months’ time.
Look for Used Equipment
Buying used is often a more realistic option for a cash-strapped startup. Used technology isn’t necessarily a bad buy either. Many companies such as Sentient Lasers offer guarantees on their used equipment, so if you need a cosmetic laser for your beauty spa, you have the peace of mind that comes with knowing any machinery you purchase is in perfect working order.
Buying is not always the answer, especially for very expensive purchases. Tech equipment depreciates quickly as new and improved models come along. Review your proposed purchases and consider the merits of renting rather than buying. For machines such as photocopiers, renting is usually a more cost-effective strategy for smaller businesses, as all consumables are provided and machines are repaired as part of a service agreement.
If you do decide to buy, don’t overlook the value of tax incentives for equipment purchases. Any technology equipment you buy for the business is classed as an asset, so you can claim a percentage of its cost and depreciation on your business tax returns. However, tax law is complicated, so it is worth speaking to your accountant to find the most cost-effective way to purchase expensive equipment.
It’s important to “work smart” when investing in expensive equipment. Tying up a significant amount of your working capital in equipment that is going to depreciate rapidly is not necessarily a good idea.