Tools are vital for success whether you own a manufacturing firm or a logistics company. There is always a resource which can revolutionize the industry, and SMBS can’t afford to miss out. But, while the right piece of equipment can help the company, a bad investment may hurt the business’s bottom line. It’s a difficult balancing act and one that lots of owners get wrong on a regular basis.
What get the uninitiated are questions such as “do I rent?”, “do I buy?”, and “should I leave it for another time?” After all, business equipment is an investment and you want to ensure a healthy return. Still, there’s no reason to hesitate just because you have reservations. Every boss in the world has to trust their gut, and you are no different.
When your stomach just won’t do, there are alternative guidelines to keep in mind. Below is a selection of purchasing tips for small businesses.
What’s The Reality?
One thing you don’t want to do is buy a piece of equipment for the wrong reasons. Okay, the competition has the latest tool, but that doesn’t mean you should follow suit. Resources like machines are expensive and the outlay may put the company’s finances in jeopardy. Even worse, the tool could be a flop and may not transform the business’s processes as you imagine. Thinking about the reality is an excellent option and one that helps you to see the bigger picture. Will new resources make the firm successful? Will it improve productivity and output? When you can answer these burning questions, the decision becomes straightforward. A tip to keep in mind is to separate yourself from the marketing plan. Businesses have advertising campaigns that don’t tell the truth which can influence decisions.
SWOT stands for Strengths Weaknesses Opportunities and Threats and is applicable across the board. So, it is logical to use the method to help you come to a detailed and analytical decision. The key is to use the four topics to shed more light on the purchase. For example, will a new machine help you maintain your strengths within the industry? Will it turns weaknesses into positives, provide new opportunities and assist in avoiding threats? If the equipment ticks all three of the boxes it’s a sure thing and needs purchasing as soon as possible. Three out of four is a great hit rate, too, yet fifty percent is where it gets tricky. You will want to reconsider should it only impact one of the four SWOT analysis areas.
Phone A Friend
As an entrepreneur, you don’t have the faintest idea what the equipment will do and if it will make a difference. Like all savvy bosses, you listen to the experts and decide based on the information. Pulling the trigger without a second opinion is dangerous and ill-informed, which is why you should phone a friend. Peers and acquaintances in the industry should have a better understanding and will be able to point you in the right direction. However, be careful and always make sure you can trust their opinion beforehand. Otherwise, an unbiased consultant can shed light on the topic. They’ll look at issues such as capacity and employee usage and determine whether the purchase is justifiable. In the same way you use SWOT analysis, he or she will perform a cost-benefit breakdown. Hopefully, the results will be conclusive enough to come to an informed decision.
Don’t dismiss either out of hand as too basic or too advanced. Remember that the smallest changes can make the biggest difference in a business. Also, there are instructions for use and training programs for employees. High-tech and low-tech resources can range from a laser cutter to a new printer, and both have their pros and cons. What the owner (you) has to do is pick a range of low and high-tech equipment which covers the gaps in the firm’s processes. That way, the workers should have everything they need to maintain their output and efficiency levels. If possible, mix the two for the best results. A mobile device is a fantastic example of high and low-tech technology coming together to improve an organization. An iPad itself or a high-powered laptop is advanced, while the internal apps are quite basic. Still, both of them allow employees to work out of the office and maintain a steady work ethic.
With the latest gadgets at the firm’s disposal, it is possible to streamline operations and become a market leader. Of course, investing in the newest technology is one way to get a foothold in the market, but it isn’t the only way. Being innovative is another alternative which managers have to consider. Thinking of different and unique ways to use a resource could change the way you manufacture goods, for example. A slight change in the process can appeal to a new audience and boost revenue by a factor of two. Companies that develop green products and services are the prime example of innovation at work. By cutting down their carbon footprint with new tools, they can market the brand as eco-friendly. In today’s climate, consumers want items which don’t harm the planet. Big Data also changed the way companies do business by collecting customer info and using it to tailor their offerings.
Is It Safe?
The final and most important factor to consider is safety. Every person in the office or on-site shouldn’t have to fear for their lives while at work. As a result, the government has comprehensive rules and regulations that businesses have to follow. The first step is to ensure that the new equipment wouldn’t break company policy and endanger life. Obviously there is the element of harm, but there are also indirect consequences. Industrial items can give off chemicals which impact the lungs and lead to illnesses, and that isn’t secure.
Investing is complicated and fraught with dangers. So, thinking through the big questions and asking for help are two ways to limit the damage.