Being a business owner is a huge challenge. No matter what industry you are in, you have to balance a budget, research competitors, grow your market share, hire team members, and appeal to customers.
The construction industry is a massive field that is very intensive in terms of capital. The main reason that construction has such high capital needs is due to the cost of heavy equipment. If you own a construction business, then you know that your team uses a lot of heavy machinery and complex tools to complete projects, all of which can cost a lot of money to use.
You may often question whether it is smarter to rent or buy certain construction equipment. What is the most cost-effective way to answer this question? Let’s look at some of the benefits of both renting and buying equipment in Montana so you can understand how to optimize your business resources.
Benefits of both renting and buying equipment in Montana
Much of the decision whether to buy or rent certain equipment should come down to your company’s specialization. Is there a particular type of job that your team is very good at and tends to do frequently? If so, then the equipment that helps you with that type of job may be worth buying. For example, if you do a lot of concrete projects, then it makes sense to invest in concrete breakers for skid steers rather than renting them every time you have a concrete-related project. Plus, you won’t have to worry about downtime and availability if the company you rent from cannot provide those breakers right away.
Time is a very important resource for construction brands. When you sign a contract with a client to complete a project, there is likely an end date for that project to be completed. This means you have the pressure to get the job done within a certain timeframe. One thing that can disrupt that timeline or cause delays is not having the right equipment. This is another consequence of choosing to rent rather than buy. Renting puts you at the mercy of the provider. Maybe a particular type of equipment is unavailable at the moment and if you already owned that piece of machinery, it wouldn’t be a problem. Consider your timeframes for projects when deciding whether or not to buy equipment.
Maintenance is one of the larger cost differences between buying or renting. If you are strapped for cash, then handling the ongoing maintenance costs of all your equipment can be overwhelming. If you choose to rent some of your equipment, much of the maintenance burden falls on the provider rather than the renter. Other than simpler maintenance tasks that are required for daily use, you won’t have to worry about paying for larger upkeep expenses or repair costs. If you are looking to save money and do not have to use certain equipment all the time, then renting can be very advantageous.
Knowing What to Buy and What to Rent
Another factor in choosing whether you should buy or rent equipment is considering what you actually need. Depending on the classification of building materials that you work with, there might be some pieces of equipment that you need for every single project, which makes it more logical to buy. Also, there may be types of machinery that are only needed for one short stage of the project. These types of equipment might need to be rented so that you are not spending a ton of money to own those tools when you only use them for a short time.
When you are no longer working on a project or have completed the tasks required of a certain piece of equipment, what do you do with it? Not having ample storage space for your construction company in Montana may be the primary reason why you cannot own much of the equipment you use. When renting machinery from other companies, you have the benefit of keeping your storage space clear of extra equipment and simply leaving those tools at the job site until you are done with them. If you have lots of storage capacity, then buying equipment makes sense since you have a place to put it. If not, then you can rely on renting.
Weigh the Pros and Cons of this Critical Business Decision
As the owner of a construction company, the decision to buy or rent equipment falls to you. Buying could be a great investment if you need the same machinery for many of your projects while renting is logical if you infrequently use certain tools or do not have the storage space to own them. There are advantages and disadvantages to both approaches, and you will likely employ a combination of the two. No matter which path you choose, be sure to weigh the costs with the benefits to make a wise business decision for your Montana construction brand.