One of the considerable aspects when opening a new business is to decide to buy or rent asset for business activities. It is very critical since it will influence your business profit.
Taking the decision to buy or rent asset should be considered thoroughly. Currently, most businesses rent equipment such as computers, copy machines, and heavy equipment to support its business activities. The business needs and the type of office equipment are the basis to decide in buying or leasing.
If you manage your own business and only need simple supplies, eg one computer, printer, and scanner, then it is better to buy them. When your business starts to grow and plans to recruit some employees, there will be additional working equipment needed. Otherwise, it will be wiser for you to rent the equipment. For a new business, renting equipment will be more efficient to encounter the rapid technology developments today.
The other benefits of renting are it provides lower expense cost compare to buying new equipment, fixed funding rates, saving working capital, and get the latest work equipment. Although renting offers many benefits, but you should also anticipate the loss. You have to pay higher for the long term and attach to certain contract on particular equipment type within a certain period. For industry-related businesses, where heavy equipment is required in large installations, the decision to buy assets will be better than renting. If you rent the building or equipment, when the rental period is over and not renew it, then you will spend more expenses to remove the heavy equipment. If you decide to rent it, then you have to rent it for the long term.
When you decide to buy assets, then can use them freely. For example in terms of machine usage, support then you are free to use or modify it as needed without asking the owner’s approval. Some business owners consider that it would be better to use the capital and profit to purchase equipment or marketing purpose supports their business development.
The most important thing should be considered before hiring decisions is to study the agreement contents in detail, learn the rights and obligations of the owner and the lessee. You can not suddenly cancel the contract unilaterally. This will give a negative image for your business credibility and charged with various compensations.Therefore, decide thoroughly fully before deciding to rent or buy.
