COVID-19 has created unexpected challenges, especially in the decorated apparel industry. With all of the uncertainty in the world revolving around health and the volatility of the economy, you might be asking yourself, “Is now the right time to buy equipment?” As your business pivots to meet a changing world, Beacon Funding has your back to help make informed buying decisions.
I talk to hundreds of business owners every week, from all over the U.S., and have learned key incites that may help you in your equipment buying process.
How Do I Decide If It Is the Right Time to Buy?
The decision to acquire new equipment should come down to your own business’ demand and financial stability. Before making the move to acquire a new equipment, read this article or watch the video to learn how to make an informed buying decision.
1) Adapt to 21st Century eCommerce and Then Assess Demand
The biggest trend I am seeing from successful decorated apparel shops is that the winners have an effective eCommerce strategy. Storefronts are limiting their operations and many more customers are shopping online. Businesses that do not adapt to that trend will lose out to businesses that do.
Your online presence should have a seamless user experience. Your website and social media pages should communicate your value and capture more viewers. There are books and videos out there that will show you how to do this, but if you are against adopting an eCommerce strategy, then read no further.
Some business owners tell me that their main customers (sports teams, schools, restaurants, etc.) are delaying or halting orders. That may be true and it is an unfortunate reality. However, you cannot rely on what worked in the past to earn you money in the future. Figure out how you can adapt your shop to 21st century eCommerce, and then scale from there. If you already have an online presence, then evaluate how you could make it better and reach more people.
Once you have a strong online marketing strategy, you are now ready to assess demand and scale. Will another embroidery or screen printing machine help you keep up with orders? What machines will improve your productivity and cut labor costs? Ultimately, you know your shop best and can determine what equipment will serve you, but don’t forget to use Beacon’s payment calculator tool to help crunch the numbers!
2) Determining Equipment’s Return on Investment
How do you determine if you’re getting your money’s worth on a machine? Use Beacon Funding’s breakeven calculator to help project what you can afford and set a good budget.
How a Breakeven Calculator Works
- Select your equipment type from the drop down
- Input the cost of the equipment you are looking to purchase
- The desired term length (36, 48, or 60 months)
- Click the edit pen next to the word “BREAKEVEN”
- Type the average revenue per job and click “MODIFY AMOUNT”
The results will calculate the amount of units you need to sell each month in order to breakeven on your equipment. Compare this to your average monthly sales to discover how this will impact your return on investment.
No one pays their employee’s annual salaries at the first of the year. You pay them every few weeks as cash flow generates. Why treat your equipment differently? With equipment financing, you could give yourself liquidity for other business needs and make payments on equipment that is earning you monthly cash flow.
Equipment Pricing: We Are in a Buyer’s Market
Equipment dealers are stocked with inventory and are offering advantageous pricing and options. Lenders are offering historically low rates. If your business is looking to add or upgrade equipment, look to financing to conserve cash and lock down a low monthly payment.
Some companies are also looking to sell their equipment as well. Reliable used-equipment can give you help your business get a faster return on investment. Good used equipment sells fast and you don’t want to buy some else’s headache. However, Beacon Funding specializes financing new and used equipment so you can decide what’s best for your business. You can compare financing proposals for new and used machines and then decide which option will best serve you in the long run.
Here to Help Your Business
By adapting to 21st century eCommerce, assessing demand, and your financial position, you’re well on your way to understanding if now is the right time for you to take advantage of the current buyer’s market. But you don’t have to go it alone. Call or email me anytime to discuss what equipment you’re considering and we can discuss the opportunity 847-897-2737 or firstname.lastname@example.org.
About the Author
Miles Hendrix, Senior Leasing Consultant
Miles Hendrix is a Senior Leasing Consultant at Beacon Funding. He studied business and philosophy at University of Idaho. When he’s not working he likes to fish, hike, and golf. Miles loves helping customers grow their business and achieve long term success.