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Equipment Investments... Buy New or Used?


The pressures of competition, environmental regulations and the need to make a profit require a streamlined, cost-effective company. Equipment such as trucks, backhoes, and riding mowers are capital investments and an important component in cost-effective management. A large portion of business profits may be invested or designated toward major equipment purchase. Before a decision is made to acquire new equipment, there must be careful consideration of the allocation of present and future cash assets to cover equipment costs. The options for obtaining the equipment needed to perform planned work include subcontractor-provided, rental, lease or outright purchase. The volume of work and financial strength of a company may determine its options.

Other factors should be carefully considered before a specific equipment choice is made. Selecting the most suitable size and power of a piece of equipment has a significant impact on productivity.

The scope of work each business performs determines which machines are most suitable for that company. Experienced owners focus on contracts that are most profitable and base purchasing decisions on known productivity of machines they operate. Other sources of information on equipment productivity are manufacturers and trade associations.

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