Managing a business is difficult, due to having to balance a range of issues. For one thing, we need to be able to manage how we spend money on equipment we consider important. By understanding this, we can make better financial decisions, thus helping our business.
Buy or lease
In order to offer our services or products, we will require equipment. The issue is that this can be incredibly expensive. The ideal is that we manage to make enough profit from our products in order to, basically, earn back any money we make in our expenses. But sometimes, we’re not yet in the position where we earn enough to make this ideal into reality.
Yet this still doesn’t negate the fact that we need to use equipment. This brings up the question of whether we should rent or buy equipment. First we must know what we need: computers, printers, networking appliances and so on. All of these fit into our understanding of equipment. Second, we then to decide which should be purchased or rented.
As Entrepreneur highlights, deciding this can be difficult. Each offers advantages and disadvantages. Leasing, for example, automatically means using the latest equipment, predictable expenses and allows us to keep up with competitors. But there are disadvantages, such as paying more in the long run. Purchasing makes it ours, though it also means paying more upfront and also maintenance costs.
Borrowing and lending
We should also be considering equipment finance. This allows us to both acquire the necessary equipment but also pay a manageable monthly expense. We know precisely how much we are spending, because we’ve negotiated a borrowing policy.
We could also get help from friends and family, as a personal loan, to acquire the equipment with finances – or perhaps borrow the equipment itself.
These days we should recognise that the landscape has changed. This means we get money in ways not possible before. One powerful example of this is crowdfunding, which let’s us acquire funds from individual investors to create the product they want. While these are not as large amounts as you would get from massive donors or investors, individual crowdfunding donors can eventually add up to a lot. We need effective marketing, however, to gain the interest of people who might not have heard of us before.
Plenty of businesses have managed to find success via Kickstarter, for example. But even more have found failure, due to being too ambitious or having terrible marketing. Having this under control is essential if we take the crowdfunding route.