Productivity is an important component of every business operation because there is a never ending balance between the cost of operations and the income received.
All industries need both human resources and equipment for operational requirements. There is a popular expression "Time is money" and it sums up the truth that in business, money is being spent every minute. If something has to be done then it makes sense to use machinery that can do any job faster than a human. Naturally, there are some tasks that a person cannot do and in those situations, business leaders have some serious decisions to make.
When machinery or equipment is required, do they purchase the product as a capital item on the balance sheet or do they lease or hire the equipment as an operational expense?
An example would be a forklift. A forklift is a very useful item in a vast range of businesses. Retailers and wholesalers move stock around and in industry, raw materials and products are shifted throughout workplaces all the time. Should a business buy the forklift or hire one?
The first step would be to speak with a forklift specialist like Mars Forklifts which hires, sells and maintains a wide range of new and secondhand forklifts from the major manufactures.
Warmed with expert advice on the type of forklifts on offer, a business operator that needs one, can weigh up the options before making an informed choice.
It is the same with most equipment.
Some businesses can write off the outlays on new equipment in the first year and enjoy the benefits of having new products, which tend to be more productive. Other less wealthy businesses might lease equipment to assist with cash flow.
In some situations, suppliers could offer used but in very good condition, items for sale or lease on favourable terms.
There is no one size fits all decision on whether to hire or buy equipment. Every situation is unique and that is why it is vital to gather as much information from suppliers as possible and then, to get independent professional specific advice from qualified accountants before proceeding.