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Hire vs. Buy: Gear for Your Trade Business

Running any business successfully requires you to be making a profit above all else. 

There are a number of ways you can save money for your trade business which includes lowering your outgoing costs, especially big purchases like gear. 

When it comes to buying new gear for your trade business, spending time to work out the full cost of gear ownership and utilisation can help you justify the spend, or point you towards equipment hire instead. 

In this blog, we will cover how to decide on hiring or buying gear for your trade business.

How to make your trade business more profitable 

If you aren’t sure where to start with creating a profitable business, here are a few things to consider: 

Keep your spending down

It’s really important to be mindful of your spending and only purchase when necessary. It can be very easy to keep swiping that company card, or adding purchases to a trade account without keeping the big picture in mind. 

Creating a budget for the year will help you to stay on track with what you can actually afford to spend in line with your expected income. 

Hire gear costs are easy to work into a budget and business plan, and will certainly keep your bank balance looking healthier. 

Understand your business costs

Though you may have help from accountants and administrators, it’s still really important that you know where the spending is happening and be managing money and the profit of your business in an active way. 

Keep track of all purchases, regularly look at the books, and keep an eye on projected gear costs for the future. 

It’s also important to make sure everything is being done legally such as income and taxes, and to use resources that cut down on the guesswork. 

Delegate work and outsource

Speaking of help, delegating finance work is an important part of keeping a healthy business. 

Ensure you have the help to keep everything running smoothly behind the scenes, so you can invest your time where needed. Having an accountant who understands the construction industry is a big plus and can keep your business on top when it comes to invoicing and taxes. 

Hiring an apprentice, or getting in lower-cost labour is another great way to increase profit, as you will be able to take on bigger jobs, and allocate your more experienced staff to appropriate tasks. 

Ensure your pipeline of work justifies the spend

A small or new business may not have enough work coming in to justify huge spending on new tools. 

Hiring tools in the interim is a great way to ensure you can take on jobs, whilst keeping money in the bank. 

Ensuring you quote correctly for jobs will help to make sure you don’t get into deep water with spending. 

How to decide if you should hire or buy gear for your trade business 

Some bits of trade gear are perfectly fine for buying whereas others can put a large dent in your savings. 

There are a number of things to consider before making the decision to hire or buy:

How often you will be using the gear

  • Is it for a one-off job?

    If it’s a one-time-use bit of gear, it doesn’t make sense to purchase. With hiring, you can easily work in the tool hire cost to your quote, that way the client is paying instead of you.

    A lot of tradies are completing a diverse range of jobs these days, so one-off equipment hire is a great solution. 

  • Do you use the equipment regularly?

    If you are using the gear regularly, you should compare the cost of buying vs hiring, but do remember that buying should also include upkeep costs.

    For example, you might use an excavator once a month on average, but do you have somewhere secure to store it? Do you have the time and money for ongoing maintenance?

    It’s also beneficial to think about what stage in the project you will want gear on-site, and whether it might be better to hire just at the time needed rather than carting everything in and taking up precious space.

    Upfront costs are only part of the picture, and hiring gives you a clearer idea of exact costs. 

  • Will you be using the equipment long-term?

    If you are using the equipment for the foreseeable future, you should consider how hiring vs buying affects your business long term.

    Consider when you would need to upgrade, the cost of insurance on the tools and whether you will need multiples in the future.

    Hirepool have you covered long term, by providing hires on gear for as long as you need them.

How many of your crew might need the gear at the same time

Hiring is a good way of topping up your stock without having to purchase multiples. 

For example, it might be feasible to buy one scissor lift for your business, but if you regularly have two crews needing that equipment at the same time, you may be having to put jobs off which would lower your earning potential.

The cost of the equipment

One of the first parts of deciding whether or not to buy equipment is to think about whether you can afford a large sum of money to go out now and in the future.

Some things to consider include: 

  • How many items of gear you would need to buy

    One item might be fine, but consider whether you will need more soon or in the future. 
  • How often the equipment is likely to need replacing

    A high-use item may need replacing more often, so it’s worth considering whether you will be able to afford that ongoing cost.

Other business expenses

Consider whether you have other expenses coming up that might affect your cash flow, for example taking on a new crewmember or buying a new company vehicle.

Hiring is not only a great long-term solution, but it can also help you get through patches where your overall expenses are too high to be purchasing more gear. If you plan to go out on your own, hiring is a great solution to get you started.

Time to complete equipment maintenance

Items such as machinery need regular maintenance, so always consider if you actually have time to complete that work. 

It’s also worth considering if you or someone in your team have the expertise to ensure the checks are done to standard, especially if the item has strict safety requirements. 

Hiring offers the benefit of skipping that job altogether, so you can spend more time working and bringing income to your business. 

Storage costs or space 

Having a large range of equipment is ideal in order to be able to take on a variety of jobs, however, paying for a large storage unit for everything may not be feasible. 

Consider whether you have space to store larger bits of equipment such as trailers, or scaffolding and how much security you need for the gear. 

Hiring means you can have the gear when you need it, without the cost of storing and the time needed to shuffle gear around for access.

Future work pipeline and unforeseen circumstances

If you are looking to expand your business you will want to ensure you have the range of gear to take on those jobs.  Scrambling to buy gear at the last minute can be costly, plus supply issues can cause headaches for jobs already lined up. 

If a job is canceled, you don’t want to be stuck with the gear you purchased and now don’t need. The extra time having to sell the gear and potentially at a loss, is another consideration. 

Hiring means you can adjust your gear needs as required, and keep your money for other expenses. 

Equipment needs at short notice

If a job comes up last minute, consider if you would have the capacity and funds to buy equipment at short notice. 

Hiring means you can get your hands on equipment that might not be easy to source for purchase. 

Allowing time for getting gear to a worksite

If you are planning to make a purchase for a larger item, consider if you have time to buy and collect the gear, including loading it onto a trailer and driving to pick it up. 

If you are very short on time, hiring is a great solution as Hirepool offers a drop-off and pick-up service for a lot of the gear, plus you don’t need to worry about assembly time. Trailer hire is also a great option.

Ongoing gear costs

The initial cost of buying gear is only part of the cost. Also, look at the ongoing costs for keeping that equipment running to a high standard. 

Always check the cost of replacement pieces such as drill bits, blades or sanding disks. 

Electrical equipment will also need to be tested and tagged on a regular basis, and those costs add up the more you have. 

Hiring means you can have the gear ready to go when you need it without the prep work, or worry of having to repair with potential breakage. 

Support and advice needs

If you aren’t sure what to buy, or how to use the equipment, hiring is a great way to get expert tradie advice rather than trying to figure it out alone and potentially buying something that isn’t quite right for your needs.  

The expert team at Hirepool will show you how to use the gear, and provide helpful tips to get the most out of the equipment. We also have a tonne of guides and instructions for use online, so you can reference them as you need to. 

How to manage your trade business gear 

Whether you hire, buy, or do a mixture of both, it’s a good idea to keep track of your gear requirements so jobs aren’t delayed and so you don’t have to turn work down.

  • Keep an inventory of stock

    Regularly check all the gear you have, check for missing items and replace or hire as needed.
  • Keep a log of future job requirements

    Check what equipment will be needed when, whether two jobs will need the same equipment at the same time, or whether you may need extra gear for a period of time.

    Consider hiring gear so you have everything ready to go when you start. It always pays to book gear online or check it’s at the branch before you need to collect it. Depending on the equipment you need, Hirepool may need to move it between branches or to your site which could take a day or so. Planning ahead means there are no delays when you’re ready to start.  
  • Check the quality of your gear

    Look at whether your current gear is up to scratch - is it worn, and not functioning as well as it should be? Could you benefit from a bit of modern tech? Make sure to check and maintain your gear regularly.

    If you can’t afford an upgrade, hiring is a good option to get the best of the best for your jobs. 

In conclusion

As you can see, there are lots of factors to weigh up when deciding to buy new gear vs hire for your trade business. 

Be sure to take your time and weigh up whether you'll get the return on investment from your gear before you buy. 

Whether you are starting a new trade business, or looking to expand your existing business, it’s important your range of gear complements what you are wanting to achieve, and sets you up for financial success. 

Thinking about hiring gear for your trade business?

Hire the equipment you need to keep your profits up and your jobs on track. Check out the Trade Hub for more tips. Visit us in store or online to see our full range of gear to help you get the job done.

 

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