Lease versus own

Lease Versus Own

Lease versus Own

The foundation for success…

A common challenge for all businesses is how to pay for the equipment needed to perform their services. Even among experts and professionals, opinions will often vary. The one thing you must recognize is that each business is unique and there are no standards that work for everyone. Only you know what your capital reserves are and what type of reserves your business will require from month-to-month. While some businesses are more sophisticated than others, only you have access to the full spectrum of your financial position today and the forecast of what responsibilities there are to come. It is not only essential that you prepare yourself adequately; it’s crucial.

In the beginning, one of the first professionals you should confer with is a Tax professional. This person can view your company in its totality and then match your company’s needs with the proper tax plan. It is an accepted belief that proper tax planning is the primary step to a successful business. Upon properly identifying your needs, it’s now time to strategize your method of operation. To assist you with that method, we’ve compiled a simple list of the advantages and disadvantages of leasing equipment versus that of buying it. This list is generic but reveals the industry norms of features and benefits. As you review, apply these characters to your business and see how it measures up. Good luck!

Own

1. When you decide what equipment to use, you are of course purchasing it. The equipment is yours to do with as you please.

2. By purchasing the equipment, you have immediately created an asset to your company profile.

3. Depending on what your equipment is and how your company is structured; you may be entitled to certain tax benefits such as writing off the expense in the first year. (Check with a tax professional)

4. There are no payments. (You own it.)

5. Now that you own the equipment, you have the option to resell it. (At a lesser price)

Lease

1. The first benefit is that if you don’t have the reserves to purchase, a lease is a viable option.

2. If you were going to purchase with a bank loan, then the bank would likely require a 20% down payment. By leasing the equipment, the standard is that you are required one or two month’s payment upfront and that’s it.

3. Although you are leasing the equipment, it is still an asset to your company.

4. Even though you have a monthly payment, you also have the option to upgrade the equipment prior to it becoming obsolete.

5. When you acquire assets, you want assets that will appreciate in value not depreciate. With many equipment materials needed to function, they will depreciate after the first year of usage.

6. By leasing all of your equipment, you may be able to fully write-off up to 100% of your payments as a business expense. (Check with a tax professional.)

7. Most items can be leased such as phones, furniture and computers, not just heavy machinery.

8. Choosing a lease allows you the flexibility to maintain capital reserves for payroll and miscellaneous expenses that may occur.

9. There are numerous types of leases that can cater to your business profile and your company’s needs.

10. Lease rates are ‘fixed’ and range in term from 12 to 60 months.

As you can see, the features of leasing far outweigh that of purchasing or owning the equipment for many businesses. Eight out of ten businesses prefer leasing over that of buying. The list you just reviewed points out the key components to both options but with further investigation, you’ll find that leasing offers many more opportunities to fulfill your desires.

Please speak with an equipment leasing professional to locate the proper lease for your company. It’s good business!

J. R. Parler

JRParler@yahoo.com

Commercial Real Estate and Finance Specialist

How to thrive in times like these

How to Thrive in Times Like These

We usually have our weekly planning meetings in one of the coffee shops in town—for one thing, there’s better coffee—and we can usually find a couple of other business owners to chat with.

The «R» word is coming up a lot, of course. How bad will it be? What should we do? How worried are you?

Maybe surprisingly, in those coffee shop gabfests, we’ve heard some fabulous ideas and success stories along with the questions and worried looks. So this article is about how we can all cope, maybe even prosper, in Times Like These. Recessions are not new. Statistics show that businesses that continue promoting through recessionary times come out stronger than ever when the hard times are over.

We’ll show you how a simple step-by-step system will ensure your marketing dollars are working for you, and we’ll share success stories from other local businesses that you can adapt and use.

The First Step: Take care of your Ideal Customers and they’ll take care of you. Ideal Customers really trust you, value the experience they have doing business with you and look to your expertise to give them what they want. They buy a lot of your product, pay quickly and never give you a headache. They pay more, and they expect to! They are the lifeblood of your business, and right now they are being wooed by every one of your competitors with special offers, lower prices and extravagant promises.

If you do nothing else this week do this: write to each of the Ideal Customers who provide most of your profit to tell them how much you appreciate their business. Reassure them that you are committed to maintaining the high level of service they are accustomed to. Ask for a personal meeting with you or your sales team to discuss their needs. Remember, they are hurting too—be prepared to offer them something of value that will help them keep their Ideal Customers.

And know that in Times Like These, you have to go the extra mile to maintain these valuable relationships. But don’t stop there. Ask your Ideal Customers what publications they read, what TV shows they like, what kind of music they prefer, and perhaps even what kind of leisure activities they enjoy. Look for the commonalities among the answers and you’ll get an idea of the places where your advertising will work best because it’s reaching the right people. If you really want to be successful, you simply must strengthen the loyalty of your Ideal Customers and find more customers just like them.

Here is what we would like to hear you say every time you are about to start a new task in your business: «Will this help me keep my Ideal Customers?» If the answer is no—don’t do it!