All business owners will understand the feeling: Times are slow, you’re in a downturn. You need to purchase new machinery, but you’re conscious of not overextending your capital. You’ve shopped around and found a well-known and respected brand’s product, and you’ve found an alternative, lesser-known brand for a fraction of the cost. What do you do?
Now, we’re not suggesting that cheaper equipment is necessarily inferior—simply that buyers should be aware of sacrificing reliability for short-term savings. The horror stories we’ve heard around the water-cooler about ‘old mate’—who bought himself a $100k dozer (saving himself $150k for a more reputable version) only to have it fail on him 3 months later—are enough to keep us up at night.
The minefield of machinery purchasing can be navigated, however, by considering a few important factors before you outlay large amounts of cashola.
Do your research
If you’ve never heard of ‘Joe Blow’s Awesome Forklift Brand’ then it’s perhaps a good time to go hunting around for someone who has. Online reviews for products of all kinds are prolific these days. Using your favourite search engine, punch in Joe Blow’s details and find out what others are saying about his forklifts. Read the reviews thoroughly, and find out if there is a consistent theme of feedback. For example:
Sarah writes: I bought a Joe Blow forklift last year. Within a month, the front left wheel fell off. Has been replaced 4 times, keeps falling off.
Bruce writes: I love my Joe Blow forklift. Although, I did once have a wheel fall off. Once it was replaced, it was good to go again.
Peter writes: NEVER BUY A JOE BLOW FORKLIFT – YOUR WHEELS WILL FALL OFF.
Nancy writes: I have had better forklifts, but this one does the job. I do wish it had cup holders though.
It would seem that Joe Blow’s forklifts have a recurring issue with wheels falling off. Rather detrimental to productivity, we’d say. Now it’s time to investigate some other factors, before you decide whether this is an issue for you. (Although, let’s be fair, the lack of cup holders might be a deal-breaker. Aren’t you lucky you did your research?!)
What kind of warranty is offered by the manufacturers you’re considering? Warranties vary wildly between different companies, and even between each of their products. Reputable brands who have confidence in their products more often than not, will have generous and transparent warranty policies. Be sure to enquire as to whether the warranty is valid for your country! This little detail catches a lot of buyers out—you’d be amazed how many firms are happy to sell you a product, and yet are conspicuously absentee when it comes to providing warranties outside of their country of origin.
Ok, so you’ve got your warranty sorted, and you’re happy with the terms and conditions. Great! Next, and just as importantly, does your manufacturer have a local support network for servicing and repairs? Having a warranty is great, but not if it means waiting for six weeks for a part to be sent away, repaired and sent back again. That’s pretty costly in downtime alone. Choosing a dealer or manufacturer with a local presence and a network of repairers is crucial. Check their turnaround times on repairs, and also check that servicing your machinery within warranty guidelines is feasible—or else that warranty might be no more than a nice, thick piece of tissue to wipe away your tears as you realise you’ve been duped.
The reason you don’t buy a 1957 Triumph TWN Cornet? PARTS! (Who are we kidding…you’d buy it anyway, because you’re a bad-ass, but you see the point we’re trying to make?)
Any time you tell your mates that you’re about to buy a new car, they’ll start waxing lyrical at you about how hard parts are to find, and how expensive the servicing is bound to be. Likewise, this is an issue with your machinery. If your warranty and servicing are up to scratch, you then need to investigate the turnaround time for parts. Many manufacturers will have a network of dealers who offer servicing with a 24-hour period of your request. That can save you some serious downtime. Speak to your dealer about parts availability, and once again, check out those reviews.
Renting and/or financing
Finally, if cash is something you’re concerned about, why not consider renting or financing your equipment? Our article Equipment Finance Tips from Industry Expert Sean Fowler has some great, no-nonsense advice for those who are considering financing heavy machinery.
Renting should include servicing of your equipement, which can save you a lot of money. Not to mention, the rental agency is more than likely obliged to replace your item when if it stops working (check the T&Cs as usual).
In short: saving your capital for leaner times can be a good strategy. Financing or renting can keep your cashflow in the green, and can be an affordable option for many.