As a contractor who owns or manages a small construction business, you may wonder if it’s smart to continue renting your equipment or if you should start purchasing the large machinery you need. While it might be tempting to own a few pieces of equipment, remember the benefits of renting before you take that plunge. Unless your business constantly works with one type of machinery, buying isn’t usually the way to go for a small construction business.
Keep Track of Job Costs
When you own professional equipment, you have to factor in the wear and tear on those machines during each job. Otherwise, you might quote the wrong price or charge too little at the end of a job, only to face equipment deterioration and repair down the line.
The cost of your rental goes directly into how much each job costs your company to perform. Right from the beginning, you can offer a more accurate quote. If the job goes for longer than expected, those extra days of rent provide immediate sums to add into your calculations. Plus, accountants don’t have to estimate how much equipment has depreciated during tax season, since you rented and have specific numbers to put on your forms.
Don’t Spend When You Don’t Need Equipment
Like with any business, construction has its busy seasons and its slow seasons. When you’re in a busy season, renting gives you the freedom to engage the machines you need for the duration of your jobs. During slow seasons, you don’t have to pay for equipment you aren’t using. This helps your overhead and your operating costs, because you aren’t paying to store or maintain equipment that you don’t need.
Take Care of Maintenance
Possibly the best part about renting is that maintenance isn’t your problem, as long as you don’t damage the rental equipment while you have it. Maintenance costs are built into the prices that rental companies charge, and you send the machines back long before they start showing signs of deterioration. It’s up to the rental company to repair and replace their machines. You simply go back when you need another rental.
Avoid Storage Issues
Image via Flickr by Eric Kilby
Storing construction equipment is no small feat. Paying for that storage space, whether you rent it or own it, costs your business considerable money. You need to watch for problems like leaks, harsh weather conditions, and temperature drops that could damage delicate machinery. A rental company is far better equipped to do this than you are. Plus, the more machines you have, the more storage space you need, and the bigger the headache becomes for you.
For most small construction businesses, renting equipment has more benefits than buying does. Ultimately, your books will tell you the right route to go, but unless your business is expanding so rapidly you’re renting the same equipment for months on end with no break to return it, renting is still the way to go. Save your money for other things, like hiring great employees and advertising your business.