There are many different types of equipment, machines, and tools used in the construction industry. This makes sense, given that this industry involves numerous applications. Without them, operations will come to a halt. For this reason, contractors have to allocate a major percentage of their overhead expenses to procurement of devices that will make their workers’ jobs easier. A portion of the budget also goes to repair and maintenance.
This raises one of the most important decisions contractors have to make: choosing whether to buy or rent tools and equipment.
Renting: Minimising risks of improper expense reduction
In the hopes of reducing their facility-related overhead and operational costs, many construction companies in Australia implement strategies they think will give them the biggest savings in the shortest amount of time. For instance, they offer their services at a lower rate, but use cheap – both in terms of price and quality – materials. Not only is this unethical and illegal; it is also extremely dangerous.
Cutting back on your costs does not mean you have to compromise quality and safety. You can simply opt to rent high-quality equipment while you’re still growing your business.
Buying: Investing on some of the most important tools of the trade
Whilst hiring or leasing equipment can benefit your construction firm, you should not go with this option for everything you need. You should also spend some of your capital on buying your own construction tools, particularly if you are handling the same projects for different clients. For instance, you can start with the smaller ones: hand tools for sale. As you secure more projects, you can gradually increase your inventory without worrying about depleting your budget.
Proper budgeting techniques play a major role in your ability to expand your business. Buy when it makes the most financial-sense and opt to rent when you know your finances can’t handle big purchases yet.