When it comes to starting a Laundromat business, should you be leasing vs purchasing laundry equipment?
Every craftsman in their trade dreams of the day that they’ll surpass their job and amass the funds to run a business of their own. From carpenters and electricians to engineers and fitness instructors, everyone wants to be able to take their skills to the next level and successfully start their own company.
As important as it is to have knowledge in your field, running a business involves quite a bit of marketing and people management. Everything in your business will boil down to finances: after all, your business cannot succeed if it’s not making a profit.
That means you need to cut expenses as much as possible while working to increase your profit, and that’s difficult. Generally you need to put money into your business to get good quality and bring in customers, so balancing how much you spend can be tricky.
In addition, businesses that are just starting cannot easily accomplish these goals because they are not making any money yet. Their business is still unknown and it will take time to bring in customers; plus, you have quite a few expenses to deal with before your business can be opened.
You need to acquire a location, utilities, furnishing, equipment, employees, and more. Paying for everything in your business is tough, and getting the best quality for your money’s worth can be even more challenging.
A Cost-Effective Start to your Laundromat Business
However, there are ways to set up your business so you save money and get the best start for your company. For instance, many businesses look into alternative ways to acquire their equipment for the sake of efficiency.
Paying thousands of dollars for mediocre equipment is not effective, which is why companies will look into both leasing and purchasing with a bank loan. However, for businesses like Laundromats that need quantity and quality in their equipment setup, which is the better option?
Should Laundromats be leasing vs purchasing laundry equipment when they first start up? The equipment setup always depends on what you need and how much you have to spend on equipment.
There are advantages to purchasing, even without a bank loan: any equipment you purchase for your business can be claimed as a business asset, giving you some funding for the purchase. However, the many reason business owners want to buy their equipment is through the benefit of ownership: they want to know that the equipment is theirs to do whatever they want with it.
The issue with this is the longevity; in other words, what’s the point of buying equipment that’s not even going to last you five years before requiring replacement? It’s one thing to spend a little money to buy equipment that can last your business a long time before requiring repair or replacement, but short-term equipment is not viable to own in any scenario.
Leasing vs Purchasing Laundry Equipment
It’s expensive to buy, it won’t last long before it starts giving you issues, and that’s just another big payment you’ll have to make down the road. Loans are always dependent on the situation but do have the potential to make things worse simply because a large loan will accumulate a lot of interest.
Even if you have a low interest rate, it’s recommended that you have a good way to pay off a loan quickly before you get a loan. If you get a loan you can’t pay off for a while, what happens if the equipment you purchased with that loan breaks down beforehand?
That’s just more of a debt you put yourself and your business in. In the case of leasing vs purchasing equipment, purchasing is an effective choice if you’re looking to buy smaller equipment that lasts longer.
However, a good lease can make starting a business much easier, especially when it comes to equipment that’s tough to afford.
How does a Lease Work?
You pay a flat monthly rate to get to use that equipment, meaning you can get any and all of the equipment you need without having to overspend.
Plus, leases are built so that way you are paying for the benefit of always having equipment, not to own the equipment. That means even if equipment breaks down, you’re covered with an equipment lease.
You can even get upgrades on equipment if you renew leases, giving you a permanent option to get your equipment. There’s no better choice when it comes to leasing vs purchasing laundry equipment; it all depends on your business.
But all companies do agree that leasing is a necessity in most businesses, especially when you’re just starting. In fact, many veteran businesses will lease their equipment simply because there are benefits to having good equipment in your business without the downsides of ownership.
To learn more about leasing vs purchasing laundry equipment, click here.