If you're in the manufacturing industry, the chances are that you're always looking for ways to save money. Buying equipment, especially the large ones, can be pretty expensive. If you're looking to save money on your next purchase, here are a few tips:
1. Look for used equipment
Although going for second-hand equipment may seem like a less appealing option, it can save you too much money in the long run.
You can find used equipment through online marketplaces or by contacting local suppliers. If you're unsure where to begin, choosing a dealer instead of looking through Craigslist forklift listings can be a great way to find reliable used equipment. There are platforms out there that can link you with reputable dealers, so it's worth taking the time to do some research.
Another great way to get quality used equipment is by attending trade shows and auctions. These events are an excellent platform to network with other industry professionals and find deals on gently-used machinery.
When you're shopping for used equipment, always make sure to inspect it closely and get to know the amount of work that needs to be done on it. You don't want to end up spending more money, in the long run, fixing up a piece of machinery that you could have gotten at a discount.
Finally, remember that buying used doesn't mean settling for less-than-ideal conditions. By taking the time to research, you can find quality pieces of machinery that will help you save money in the long run.
2. Don't Be Shy, Negotiate!
While it may seem a little daunting, don't be afraid to negotiate the price of your equipment. Many dealers are willing to strike a deal and come up with a fair price. If they're not, there's always another dealer who will be.
If you're unsure how to negotiate, bring along a friend who knows more about it.
If you're not sure that the equipment is priced fairly, get an independent appraisal of its worth before buying it. You can also check out online listings for the same item and see what they are being sold for elsewhere.
3. Look for Tax Breaks
Taxation is one of the many expenses that companies in the manufacturing industry incur. However, there are ways to reduce this cost. For example, some states give tax breaks for investing in new or upgraded machinery. It's essential to research what is available in your area and take advantage of these incentives whenever possible.
By taking advantage of tax breaks, you can save a significant amount of money on the cost of new equipment. This can help your business stay competitive and grow in the future. It’s always a good thing to save money in the long run.
4. Compare Prices
When shopping for equipment, it’s essential to shop around for the best price. Check out similar equipment on different websites and compare prices. Many great sites offer free quotes from multiple suppliers, which will help you find the lowest price possible without having to spend hours or days researching yourself.
5. Regularly Maintain your Existing Equipment
Many times, business owners in the manufacturing industry try to save money by not regularly maintaining their existing equipment. This is a big mistake. You can quickly run into costly repairs and replacements by not properly caring for your machines. Instead, set aside some money each month to take care of minor problems before turning them into bigger ones.
Depending on the nature of your business, leasing equipment may be a better option than purchasing it outright. Leasing is often cheaper than buying when the cost of interest and depreciation are taken into account over time. It's not uncommon to spend years paying off an asset before you've owned or 'paid for it in full - if at all!
Leasing can also help smooth out cash flow issues since payments don't need to coincide with income (and, therefore, sales). If this sounds like something that might work for you, you should work closely with your accountant, who will consider factors such as tax deductions; how long assets last, financing rates, etc. And remember, leases aren't only available on expensive items such as trucks and machinery but also smaller items such as computers and tools.
In the manufacturing industry, the cost of equipment can add up quickly. This is particularly true for small businesses, where a lack of capital makes it difficult to purchase new equipment on a whim. Luckily, mentioned above are ways to save money while still getting what you need out of your equipment investment.