5 Questions to Ask Before Investing in New Equipment

Is it time to upgrade the equipment in your machine shop? The New Year is a natural time to think of adding capacity and versatility to your shop with a new piece of machinery.

Investing in a new piece of equipment is a big step. Whether you’re thinking of buying a new hydraulic press, accessories or tools, you’re talking about a major use of your business funds.

According to the experts at the Business Development Bank of Canada, doing your research before making a major purchase will save more than money. It can prevent the frustration and downtime needed to fix an acquisition that doesn’t meet your precise needs.

To help you make before buying a new piece of machinery for your shop, here are 5 questions to ask yourself.

 

#1. What specific business demand does this equipment handle?

Will the new equipment speed up your workflow? If so, how much? Are you replacing a worn-out piece of machinery that is a requirement for your customers? Is your goal to stay competitive?

 

#2. Are your customers asking for the new capability?

Do you have a definite potential customer in mind, one willing to pay for the service the new hydraulic press or tool allows you to offer? If your current customers are already asking if you offer a specific service, you know there is a demand in your area.

Are your competitors already offering this capability? If so, spending the money might be the best way to attract attention in your marketplace.

Is the demand already there or do you need to educate your customers first? If people are asking now, you can get jobs quickly and your investment will pay off quickly. If you have to educate the market about the possibilities for the new service, plan to see a return on your investment in the intermediate or long term.

 

#3. Does the new equipment work with the rest of your machinery?

If it fits in seamlessly, great! But you might need to move heavy equipment to get it to fit. Be sure to factor in the cost. Work through the new job flow process to figure out how much tinkering is involved to get the new machinery to blend in your current job flow.
 

#4. Do you know the lifetime cost of ownership?

Work with your accountant to figure out your lifetime cost of ownership. Add up the cost of the machinery, taxes, installation, training, and maintenance and repair.

 

#5. What will happen if you wait 12 months?

Will you be in a better position to afford the machinery if you wait a year? Or do you need it now to finish jobs or stay competitive?

Identify your ideal piece of machinery, but also look at lower priced options available, perhaps with fewer bells and whistles. Is it worth it to get a less expensive machine?

Work with your accountant to pinpoint the best way to fund your new purchase. Can you take advantage of tax incentives by getting it now, or later?


Press Master Is Here to Help

At Press Master, we want you to be successful. We will help you identify the right hydraulic press for your needs.

Call Press Master today for more information about the best hydraulic press and accessories for your machine shop.