The prospect of a new firm is exciting. It’s all a clean white canvas from the point you receive your letter of incorporation. A new company represents the sheer will to succeed against all odds. It is the symbol of resilience and hope for brighter prospects. However, a new firm faces a myriad of challenges that often shape the trajectory of the new firm going forward. As is the case with any new start-up, equipment acquisition is prioritized as urgent. This article aims to explore the benefits a new firm would stand to enjoy and the risks it would avert through renting equipment.
BAD NEWS FIRST.
Being a new firm, money isn’t in plentiful supply. No profits raked in yet and piles of paperwork to deal with. Licenses, permits, staff salaries, basic furniture and the real nightmare that is equipment necessary to start operations pile up. Before you get your shiny new company up and running, government regulations, tax returns and tons of other legal paperwork may weigh you down but that’s basic inception.
The age old question on whether to rent, buy or lease equipment is ever so contemplated upon. Buying would seem like a really good idea at first but looking back at the costs should steer your mind off that direction. Leasing on the other hand would be a great plan but the issue of long term commitment is another kicker.
Probably the best choice for a startup firm. This method of equipment acquisition is favored by most players in the construction industry and allied fields. Asset financing allows new companies to acquire equipment necessary for their running. Most heavy equipment isn’t cheap to purchase or maintain. Renting it forms the best choice considering cutting running costs is of utmost importance. Here are some benefits of renting;
- Hefty costs associated with machine purchase are avoided through rental agreements. Most heavy equipment is expensive and heavily taxed. On top of that is the menacing need dictated by some policies that heavy equipment requires operating permits and licenses. Renting cuts down all these unnecessary costs. The rented equipment’s legal paperwork is the owning company’s burden not the renting party’s.
- You only get to rent the specific pieces of equipment that you need immediately you begin operations. Unlike leasing where hired equipment is likely to sit idle for a while, renting ensures that any equipment rented is immediately put to work. Therefore, any losses that might be incurred by speculating holding of equipment is avoided.
- Maintenance costs associated with the equipment are still the responsibility of the company that owns the machinery. You incur no further costs apart from the periodic fixed renting fees.
- Being a new company, you will need the very best equipment available. Efficiency and reliability will go a long way in helping you carve out a niche for your new company. Technology evolves fast and your choice of equipment ought to keep up.
Young companies face the risk of immediate liquidity upon start up mainly through excessive bleeding of funds. The main aim of a company is to make profits with as minimal operating costs as is possible. With time a small firm may expand and amass enough experience and financial standing to take on the big boys in the market.. In the meantime, equipment renting remains the perfect way to minimize risks facing a startup firm while delivering the necessary paraphernalia needed for operations. With time, your new firm will acclimatize to the market’s conditions and hopefully grow.
Written by Lindsey Rentals. Lindsey Rentals offers the best equipment rentals in Columbia, MO.