Often, one of the most challenging parts of managing a small business is to buy the necessary machinery and equipments. Especially, if you have to invest hard-earned capital into fixed assets before even making your first sale, it is all the more stressful, no matter how confident an entrepreneur you are. To make the right choices with machinery loan for small business, it is imperative to compare amongst sellers and carefully assess the long-term value of each machinery you buy. The following guidelines will be useful when it comes to the purchase of machinery with equipment machinery loan for your small business-
●New or used? Since you are just ready to launch a business in a bootstrapping condition, you may consider buying used machinery. Since it costs much lesser, it will reduce the startup capital investment. However, you need to be extra cautious when buying, especially with regard to checking the warranty, and the company reputation.
●Production output: you must factor in this aspect when purchasing machinery; additionally, a prudent move would be to compare the production output with expected utilities and price. Ideally, the machinery you buy should offer an optimum production output with minimum utility requirements in a reasonable price.
●Price comparison: This is another major factor as far as selecting the right machinery for business is concerned. If you get different prices for the same machine, try to find out the reason behind the same, and pay meticulous attention to every feature of the machine. However, always prioritize quality and value over price, even if you are availing machinery loan for small business.
●Manpower engagement: after all, you will need to pay for every man-hour that is involved in operating the machine. The long-term success of the business depends significantly on the several cost factors, and you have to identify how much you have to pay per unit production.
●Space requirement: before investing in a particular machinery with equipment loan, you must know how much space it will occupy in installation and operation. If you cannot provide the required space that it needs to be operated, there is no point in buying it.
●Power requirement and consumption: if a machinery or equipment needs a domestic phase to operate then it is good, otherwise you will need to arrange commercial electricity from the Electricity Board. It is not only time-consuming but also needs considerable investment.
●Warranty period: check it carefully before placing the final order along with the service fees structure after the warranty period.
●Installation and training: check whether there is any installation charge. Generally most companies provide free of cost installation service; however, it is better to clarify beforehand. Additionally, ask them to give an on-site training to your employees.
Before you start your purchases, it is of paramount importance to first create a list of the equipment needs and wants. You can go on updating and revising this list as your business grows as this list is going to be a continuous part of your business plan. A good idea will be to divide the list into two columns- the first with a rundown of all the mandatory equipments that are necessary for basic operations, and the second a “wish list” of items that can aid your business but are not quite must-haves.
Also, it is advisable to identify what you should outsource for financial or space constraints. Space is, in fact, a very important factor which will play a key role in making smart choices of equipment financing. You need to have accurate measurements of your workspace and accordingly, an idea of where equipment can be placed according to the dimensions required. A space planning tool like SmartDraw can be particularly beneficial when it comes to digitally designing your space. Using this, you can drag and draw furniture and fixtures that you need.
Last but not the least, if you are looking to save on equipment price, it is natural to be drawn towards the lowest price model. While this strategy may work for some cases, there are certain critical items which are worth few more bucks to avoid potential problems in the long run. Bajaj Finserv is always at your service with its flexible and convenient business loans, which can contribute significantly to the purchase of machinery for your small business.
Daina Martin is a freelance author and writes for a variety of online publications like Huffingtonpost,Sitepronews.com and etc.. She actively writes blogs and articles related to Eco-friendly resources,health and technology. When she’s not working, she likes to cook, dance and travel.