Written by Ben Eppley |
Let’s preface this topic by saying that every situation is different. Choosing whether to buy or rent your cleaning equipment is based on your company’s individual needs, as there are pros and cons to both renting and buying. It pays to evaluate your company’s current situation and capabilities, your future plans, and to carefully consider which method of acquiring cleaning equipment will be most advantageous to your business. Simply stated, which decision is going to make your life easier? Are you prepared to make this decision?
We are not here to sway you one way or the other into buying or renting, but rather to help alleviate the stresses of determining the better option. Aside from factors specific to your company, here’s an overview of some general factors you should keep in mind before deciding whether to buy or rent equipment:
1) Financial Situation
Seems obvious right? But be sure to review your current financial situation to determine if you have the capital to buy the equipment you need, or if renting is a financially safer option at the moment. Also, look beyond your current situation and project your costs over several months or years. Buying may be a large one-time financial commitment, but the cost of renting can add up quickly as well over time. And don’t forget, when you own, you can see a return on your investment if and when you sell. Be sure to measure all of these financial options.
First, consider buying good quality used equipment. When you rent, you are often paying for the newest equipment with the latest technology. Purchasing well-maintained used equipment can be cheaper than buying new equipment, and may be more cost-effective than renting over the long term. Second, you could give your company some financial breathing room by financing your equipment purchases and maintaining capital.
2) Cost of Ownership
It’s also important to estimate the cost of equipment ownership versus the cost of renting equipment. With ownership comes maintenance and operating costs, as well as insurance and other government licensing fees which vary from machine to machine. Renting equipment, on the other hand, is generally an inclusive cost. However, given that a rental company has to turn a profit, you should consider the mark up on your rental fees, purchase price, and the cost of ownership.
Fuel cost is the common denominator in both owning and renting power cleaning equipment and needs to be considered along with your long term projection. Roughly one-third of your total expenses will be for the cost of fuel. Lastly, take a look at possible tax implications of buying versus renting equipment.
3) Length of the Project
Of all the things to consider, project length or the frequency of jobs is one of the most important factors in deciding whether you rent or buy equipment. For a short term job or one time use, renting may make the most sense. The risk, of course, is that a project may take longer than expected or that there may be a holdup where the equipment is temporarily not being used. A rented machine just sitting around is the same as throwing money away.
If you’re working on a long project, or if you’ve got several jobs on the horizon, then buying probably makes better sense, given that rental costs add up quickly the longer a job goes on. Our equipment can be used to tackle a number of cleaning jobs.
4) Equipment Availability and Usage
The big advantage of owing your own equipment is that it’s available to you 24/7! If there happens to be an unexpected project or schedule change, you’ll have the necessary equipment sitting in your back pocket. Take on jobs at a moment’s notice and complete projects with less downtime. Renting, on the other hand, has its cost tied to the length of the project. With proper planning, this can be a money saver, just so long as the project can be completed on schedule.
5) Inventory Management and Control
Finally, managing your equipment should also be considered. If you have the skills and the time, you can save money in the long run by buying some or all of your equipment and taking care of insurance and maintenance yourself. If not, don’t worry about it! That small extra cost will save you the stress of trying to figure all of that out. You’ll know where the equipment is, who’s running it, and you can schedule jobs and equipment usage accordingly.
For shorter term jobs, you may want to consider renting, but, as mentioned, buying provides you with added flexibility. Let’s say you project that you’ll need a piece of equipment for six months. If for some reason that job extends to a year, guess what – that machine is still there and ready for use. If the job ends and you decide you don’t need it, sell it again recoup some of your investment. You can have great ability to control your inventory, and even profit from equipment you don’t need anymore.
|Benefits of Renting||Benefits of Buying|
|No Maintenance Costs||Equipment’s Availability and Ease of Use|
|Cheap Initial Investment||Resale Value and/or Trade-In Value Can Assist in the Replacement of the Cleaning Machine|
|It’s a Low Risk, Short-Term Investment||Higher Up-Front Costs but it’s a Long-Term Investment that will earn you money over time.|
|You’ll Always Have the Latest Equipment and Technology||Tax Advantages|