Brake Lathe Buying Guide

Equipment Essentials – Brake Lathes

3 questions that you MUST ask yourself BEFORE choosing the right brake lathe:

Brake LatheA brake lathe is a piece of equipment that you can use to fix imperfections on the surface of a wheel rotor. Oftentimes, when people feel or hear vibrations and/or noises while driving or braking, what they’re actually experiencing is a rotor-related issue. And generally, these issues involve the surface of the rotor itself. Over time, with prolonged use or even from exposure to corrosive contaminants (like road salt), the surface of the rotor can become uneven.

A brake lathe can take a layer of metal off of the rotors to even them out and fix the flaws, which should enable the brake pads to ‘grab’ the rotor just like they did when it was new. ‘Machining’ the rotor (as it’s often called) can lengthen its life—thereby saving you time, trouble, and money. New rotors aren’t cheap—so lengthening their life-span definitely doesn’t hurt where the wallet is concerned.

A quality brake lathe can be a helpful and profitable step for any garage or shop owner—though choosing the best lathe for your needs might not be quite as easy as it sounds. There are actually two different basic types of lathes to choose from (on-car or off-car), and beyond that there are a ton of options to consider as you shop for the best model/brand for you.

In this blog, we’re going to discuss three questions that you really need to answer before buying. These questions might seem simplistic—but they may also help to steer you clear of some options that might not be the best for your situation.

Is the brand/model in question going to be quick to set up and run?

A brake lathe is considered a quantity-focused machine—and most of them are designed to be fast and easy to use. With that being said, some are definitely faster and easier to use than others—and this is going to be an important thing to consider.   To ensure you get the best selection of options and models, it is always wise to get multiple quotes from authorized equipment sellers.  Let’s be honest—buying one of these machines isn’t going to be cheap—so you need to think about recouping your investment. The more you can get done with it, the quicker that will happen—but it’s never going to happen if changing rotors and attaching tools is too time consuming.

Never buy or lease a brake lathe before making sure that it’s not going to take you a ton of time to do anything with it. If you’re running a garage, then you know better than most that time is money.

Should you buy an on-car brake lathe?

Thinking MechanicOn-car brake lathes offer some distinct advantages and disadvantages, though one may work better in your situation than the other. On one hand, they tend to be very accurate because they’re mounted to the rotor just like a brake caliper, and thereby don’t require you to remove it from the vehicle. On the other hand, it isn’t possible to just ‘turn’ rotors brought into the shop this way without a lot of extra work—so this choice can sometimes be a tough one.

Is it easy to maintain and keep clean?

One of the primary reasons for inaccuracy on rotor machining jobs comes from a failure to mount the parts correctly to the lathe. And one of the main reasons for mounting problems is a failure to keep the lathe and its parts impeccably clean.

Is the rotor in question easy to maintain? Would it be difficult to keep rust, metal particles, and other debris from messing with the process?

If you feel that a brake lathe has some design problems in this area, than make sure to test the theory by reading or watching some reviews before the purchase. The main responsibility here lies with the operator, of course—but some brake lathes may not offer a design that’s incredibly ‘intuitive’ in the maintenance area. This could cause needless problems that may not be worth dealing with—especially when there are so many brake lathes out there that are designed with this issue in mind.

Conclusion

These might not necessarily be end-all questions that will guarantee the right purchase—but they’re a starting point and should probably always be considered. For best results, do your research and explore your options before making the purchase. This will greatly increase your odds of buying a brake lathe that will work perfectly for your garage or shop.

 

Equipment Essentials – Auto Lifts

Equipment Essentials – How to Shop Smart For A New Auto Lift

An auto lift may be one of the most important purchases that your shop or garage ever makes. With more and more people choosing to get their cars repaired nowadays (as opposed to buying something new), it’s incredibly important that every automotive repair business be prepared for whatever might come through the door—and this all begins with a high-quality auto lift.

Auto LiftWhether you rebuild transmissions or change the tires, you’re likely going to find that an auto lift that’s powerful enough to get the job done will be an invaluable asset.

But how do you know what to look for? What should you buy, and what should you avoid?

In this blog post, we’re going to talk about three different things to keep in mind as you shop for the right machine for you.

Make sure that your lift is ALI/ANSI Certified

When it comes to safety, ensuring that you’re lift is capable of performing day-to-day functions without incident is essential! But how can you know this for sure?

As it turns out, the ALI (Automotive Lift Institute) is credentialed by ANSI, and offers a third-party certification program for automotive lift products. Basically, they perform tests and make sure that the lift in question meets all appropriate standards for safety and reliability—and lifts that pass their inspection are awarded ALI and/or ANSI certification.

As a general rule, you should probably never buy a lift that isn’t certified by the ALI. Basically all reputable lift companies make sure that their lifts are certified in this manner, and buying only lifts with the ‘gold sticker’ will ensure that you’re buying into something safe and reliable.

Success RulerCheck and double-check your space

Sometimes, it can be easy to make mistakes when estimating the amount of space that you actually have to work with in your garage. And when it comes to buying and installing a lift, it’s very important that you have enough space! Performing modifications or alterations to a lift can be costly, time-consuming, and sometimes impossible—so make sure that you measure, re-measure, and re-re-measure before ordering your lift. You should also check with the company that’s going to be installing it so that you can be sure that you’re measuring correctly and accounting for every possibility.

Look for a good warranty (preferably a life-time warranty)

Warranty Light BulbIt’s always a good sign when a company will guarantee their products for life—and when it comes to an automotive lift, this is definitely something to look for. Of course, if you’re looking to save some money, then you may come to realize that life-time warranties are a bit tougher to come by—so at least make sure that you’re getting as much protection as you can for as long as possible.

If you plan on using the lift for a commercial operation, then you may really want to consider getting something that’s guaranteed for life. It may cost you extra, but this extra is going to be well worth it if you end up developing serious problems years down the road.

Conclusion

In the end, remember that an automotive lift is a very standard and important piece of equipment. If this machine isn’t functioning properly, then you’re not going to be able to get much work done. And if you’re not going to be able to get work done, then you’re not going to make any money.  If budgets and/or cash flow are limited, many automotive equipment sellers offer affordable payment plans.  Equipment financing allows you to procure the equipment that is the best fit for your needs versus only purchasing the lift you can currently afford.

This could set you back and take earnings directly out of your pocket! This doesn’t mean that you have to buy the most expensive thing out there, but it does mean that you should put some serious thought and effort into the shopping process.

Paint Spray Booth Buying Guide

Equipment Essentials Series…

3 important things to think about before buying a paint spray booth:

If you plan on doing any automotive painting in your shop or garage (either commercially or as a hobby), then a paint spray booth is going to be a necessity. The paint itself is actually too dangerous to just ‘let loose’ into the air—so this piece of equipment can also help you to protect the rest of your shop from getting coated in paints of all different colors.

Spray Paint Booth  But a paint spray booth is more than just a convenience. It’s also (as we’ve already talked about) a safety feature and a way to increase the profitability of your business. If you can do your own automotive painting in-house, then you won’t need to contract it out for full-price to someone else. Instead, you can use it to increase your level of service to your own customer base and invent a new flow of income.

But how do you know what to buy? Where do you start? In this blog post, we’re going to talk about 3 important things that you really need to think about before buying a new paint spray booth.

Make sure that you’ll have local accessibility to parts

A nice automotive paint spray booth is a fantastic asset when it’s working—but what if it breaks down? Having the ability to get new parts quickly and with little effort is incredibly important. Contrary to what a lot of people may believe, paint booths are made up of a lot of moving pieces—and if even one of them goes out of commission, it could mean time-out until it’s fixed. This could impact your productivity and put you behind.

Service SignPart of this problem could be solved with a good warranty. If the manufacturer will guarantee the parts, then you can usually rest assured that you’re going to be taken care of.

Make sure that you can assemble it without a problem

Sometimes it can be easy to get caught up in the technical specs of a purchase like this—though it’s important not to overlook the more ‘functional’ aspects of it as well. Is the paint spray booth in question going to be easy to assemble for you and your team? Are you going to need to hire someone to do it? If so, how much will it cost?

Having enough room available to assemble it is also something to factor in. Always measure and double-check to make sure that you’re going to have enough room left after the job is complete. One of the worst mistakes you could make in this situation is to order a paint spray booth that’s too large for your building—especially if you don’t realize what you’ve done until you’ve already started to set it up!

These are all things to keep in mind as you shop for the best booth for your garage.

Make sure that the vendor has the right credentials from the proper testing laboratories

One thing about paint spray booths that is absolutely essential to keep in mind is that they need to meet certain safety criteria. There are a lot of codes and federal regulations that you have to abide by, both to ensure safety and to qualify for all of the right permits—so keep this in mind as you shop and look at different spray booth makers. Don’t be afraid to ask questions, and steer clear of companies that don’t like to talk about the legalities.

Conclusion

Buy Rent SignWhile there’s a lot to cover with a purchase like this, try to remember not to get so wrapped up in the details that you neglect to think about how well the booth will work for your business. When you find the right equipment fit, don’t let the cost stop you from procuring a piece of equipment that can help you grow your business. If the cash price is to cash flow prohibitive then consider equipment leasing or a short term business loan.  Both of these financing options can make a new equipment acquisition extremely affordable.

 

 

 

Equipment Essentials: News You Can Use

3 Reasons For Why You Should Buy A Fluid Exchange System For Your Garage

A fluid exchange system is basically a system (usually consisting of a main apparatus with tubes that connect to your vehicle) that allows you to pull old fluid from your vehicle and replace it with new fluid. Some systems can also be used to ‘flush out’ the inside of your car or truck by running a cleaning fluid through it before replacing the old fluid with the new.

Garage MechanicFluid exchange systems are sometimes one of the last pieces of equipment that smaller garages or shops think about buying, mostly because they can seem like a waste of money when it’s possible to just perform said fluid exchanges by hand.

But what a lot of people don’t realize is that there are several good reasons to invest in such a piece of equipment—especially if you perform a lot of regular fluid changes or have a fleet of company vehicles to maintain.

Doing all of this work by hand can be time-consuming and labor intensive—which is why fluid exchange systems are becoming more and more popular. As the market gets more competitive and it becomes more and more important for businesses to eliminate wasted time and energy, people are beginning to realize that purchases like this can make a ton of difference.

Here are 3 reasons for why you should consider buying a fluid exchange system for your shop or garage.

They can save (and make) you money

While it might seem like a big investment up front, buying a fluid exchange system could actually have a significant, positive impact on your bottom-line—especially where labor costs are concerned. Some of the better systems don’t even require attention while they’re running through their cycle. You can really just set them up and let them do their job. Also, those that do require attention really help to speed up the process in-general. They make it easier to change fluids, thus resulting in less time spent on projects that require it. And when you’re paying your employees by the hour, time is money.

They make the entire process easier

Have you ever had problems with spilled fluid on a customer’s (or your) car? Have you ever Service Clip Boardwished that flushing transmission fluid could be simpler than dropping the pan and draining everything the old-fashioned way? Of course, some newer vehicles make those older fluid-swapping chores easier, but even in these cases there are still difficulties that no mechanic enjoys dealing with.

A fluid exchange system, however, makes the process incredibly easy. You can just hook up the hoses and run the system through the normal processes. Not only will you see an increase in your bottom line, but your mechanics will thank you for making their job easier!

They’ll make flushing a vehicle’s system a lot simpler

Changing fluids is good for your customer’s car, but flushing out the system between re-fills is a great way to reduce the build-up of grime on the inside. This can add miles to the vehicle’s lifespan and earn you a great reputation among your customers.

A fluid exchange system will literally make this process as easy as the push of a button (depending upon the exact type of system purchased, of course). With a fluid exchange system, you can forget about spending a ton of extra, valuable time on such a crucial step. This will also, in turn, probably allow you to make your rates for fluid changes more affordable as well.

Conclusion

Spend Save SignsSpending money on a purchase like this may be difficult for some smaller garages or if you have limited cash flow.  Many automotive business owners utilize lease financing or working capital loans and the promise of money-saved in the long run can help to make the idea more appealing and affordable.

At any rate, you should definitely think about investing in this piece of gear if you perform more than just one or two fluid changes per week, and much more so if you perform a dozen or more. You won’t believe how much time you can save with one of these machines! They’re truly an incredible improvement to an absolutely essential function that every garage is going to need to perform every day anyway—so why not make it as easy and as fast as it can be?

 

 

The Equipment Dealer Purchasing Guide

Even if everything looks good on paper, there are still a few questions that you want to ask your equipment supplier to make sure that you get the best deal possible on the equipment your business needs. When working with an equipment supplier for your business, the goal is a mutually beneficial business partnership. Once you have made your equipment selection, by asking these questions before you ever sign your name on the dotted line, you can save yourself the headache of working with a supplier that is just not going to be a good fit.

What are my payment terms?

This has to be one of your first questions, especially because at a higher price, you might not be able to afford the equipment unless the payment terms are suitable. You also want to see if you can negotiate the payment terms. Perhaps you are able to pay a little sooner than your equipment dealer would anticipate, does that lower the price a little?

Perhaps you can make a down payment for some of the equipment as well, would that reduce the overall cost? Most equipment dealers are going to want payment within the first 30 days, but you might be able to extend this to 60, possibly even 90 days. This could help improve your cash flow around the time of your purchase.

What are my total costs?Weigh all your cost options

Sometimes the lowest quote can be deceiving – especially if it does not include a host of “additional fees” that are going to be added later. Consider restocking charges for returns, fuel surcharges, or delivery fees. Those are going to add up quickly and must certainly be factored in when considering the overall price of your order.

For example, do you have to worry about renewing your warranty? Perhaps you have a one-year service contract upon purchase, but what happens after that year is over? What about additional services? Perhaps you have to consider training costs as well. Is training even available? Are these trainings delivered in person or online?

If you want to evaluate your Return on Investment (ROI), you need to be able to factor in all these additional costs. Perhaps a slightly more expensive option is going to cost you more money upfront, but your ROI ends up being far better because of additional benefits.

What happens during a delayed delivery?

In a perfect world, everything works out all the time, there are no delays, no mistakes, and everyone always has the product in stock. We do not live in a perfect world though. So what is going to happen if an order comes in late, what is going to happen if an item is out of stock (temporarily). Are you going to receive a discount for your inconvenience?

What if you NEED that equipment yesterday and the dealer is unable to provide you with it? Does the burden of finding a replacement fall on you or the dealer? The only thing that matters to you is that you get the equipment you need, but you need to know how to anticipate for this possibility.

When do I take ownership?

Until the issue of taking ownership causes problems, most business owners will overlook this factor. Do you take ownership after a certain grace period or as soon as it is delivered? With some equipment you can tell right away whether it works or not, with other equipment, you might need a few more days to ensure that it is in good working condition.

Especially when you are still in the negotiation phase, try to include a contract clause that would provide you with three to five days before you take ownership. This gives you a chance to determine whether the equipment is functioning according to your needs and specifications.

What might generate a price change?

When budgeting for future equipment purchases it is critical to get an understanding of your suppliers pricing policies. When people hear “price change” in reference to an equipment dealer, most of them will always assume that it is just a nice way of saying “price increase”. Some suppliers are going to raise their prices every few months/years, ask them what situations might lead to a price increase. Do they tie their prices to an industry index or to inflation? Remember when planning for the future, it is impossible to factor in the prices that are relevant today. You have to be able to factor in potential changes.

It is also important to ask whether you get a heads up about these changes, how long before the price increase happens do you receive a notice from the supplier? What if the costs for the supplier go down, does that benefit you financially, or do your prices remain consistent regardless of any financial windfalls for the equipment dealer?

Lock in your equipment priceCan you lock in prices

It is also good to know if you can lock in costs for a specific time-frame. With many different suppliers increasing their prices over time, it could be difficult to plan for your long-term financial future if you do not know how much your supplies are going to cost. Locking in a specific cost for a period of time will help eliminate that uncertainty.

What are their authorizations?

Does your potential supplier have authorized manufacturers? Have they obtained a number of different certifications? This not only means that they are “not just doing this for fun,” but it also means that they are able to provide you with technical expertise in relates to your product. If you have the choice, going with a certified supplier with authorized manufacturer relationships is often the best option.

Can you give me a liability insurance certificate?

In the event that their parts or products malfunction, you want evidence that they have adequate liability insurance to cover any damage/downtime, and you want it in writing. Even though it sounds like a hassle, make sure that the policy is being renewed by requesting another copy of the liability insurance certificate yearly.

Do they offer training?

If you are buying a $10,000 machine, you would like your staff to be able to use it properly. Does your supplier offer training for your new product? If so, is this onsite training or is the training done online? This can be a major difference depending on the type of supplies that you are buying.

How well do they know your industry?

This is an important question that purchasing managers often overlook – how well do these suppliers know your business category? Especially if you are buying products that you have very little information about, it is always good to have experienced suppliers think along with you.

Lease Vs. BuyWhat about payment options?

If you want to give yourself some financial leeway, you want to make sure that there are different payment options, other than cash, available that match your needs. Perhaps you can look into business loans or equipment leasing with or without an option to buy. This is going to depend on your business needs, but you should be able to find out if there are more favorable payment options available.

Parts and supplies

What happens when you need parts or supplies? Are these in stock? If they are not in stock, how long does it take before you get your delivery? There is nothing more frustrating than needing a replacement part right away, only to find out that it is going to take days, possibly even weeks to be delivered.

Who is my key contact and when can I meet them?

You know that while you value all of your employees, not everyone is the same. There is always a resource at your equipment dealer who might be a better fit for your particular situation than someone else. Remember that you deserve to know who your contact person is before you sign, especially considering that they will be a key to your success.

You do not have to meet your contact face-to-face, but it would be nice to talk over the phone and have a quick overview of this person’s bio. You may even want to ask for references on your contact if you believe that your project is critical and visible to your stakeholders.

Can you get me three references?

Now you do not want to start asking for references unless you are serious about doing business together. Just as you would not want to give equipment supplier information that is not relevant until you are going to move forward. If you were not ready to make a decision, most equipment dealers would probably prefer if you do not call their customers. This means that it is important that you know what you want to ask possible references.

You should also ask for a reference that decided to stop working with the supplier altogether. This strategy can give you some valuable insight that you might not get from otherwise happy customers. Perhaps they are able to tell you why they left. Perhaps they left because they went out of business, had no more need for the equipment, found the equipment dealer to be too expensive, or had some other reason not to want to business any more. This might provide you with some highly valuable insight and assist you in making the best supplier decision possible.

Reviewing Your Equipment Supplier’s Website

When it comes to finding the right equipment supplier, what appear to be relatively minor details can end up being warning signs for the future. You may just glance at the website that your supplier has and decide whether you like the layout, whether the graphics are pleasing to the eye. Yet there are other important factors that you have to pay attention to when reviewing your supplier’s website.

By using the information presented here, you will be able to review a potential supplier’s website quickly. This will not only help you avoid issues later on, but will also assist you to spot potential pitfalls that you will want to avoid.

Do they even have a website?

Website SearchYou might be surprised; there are some legitimate suppliers that do not have a website. Having spoken to some of them before, they suggest that most of their business is done locally and they do not need a website. Nonetheless, it cannot be considered surprising that those companies without a website are perceived as less trustworthy. It is just not a good sign if your potential supplier does not have a website.

If they do have a website, what sort of website do they have? Is this merely a placeholder (e.g. having an online presence because it is “expected”) or do they provide information to current and prospective customers? Your potential supplier having an online presence does not really mean anything unless it actually benefits you in some way.

Outdated information

Just because a supplier has an outdated website, it does not necessarily mean that they are not going to be unable to support your product needs. However, if you see that their latest update on the website is that they will be attending a trade show (back in 2012); it probably does make you a little hesitant about the relevancy of their website. A poorly managed website could also display signs of a poorly managed business. If they are unable to manage their site in a quality manner, is that a symptom of other more serious issues with the supplier?

Contact information

You may never have to contact your supplier about anything. If at all possible, you might just complete your order – be happy with the delivered product – process your payment – transaction is finalized. Yet it is important that you have ways to contact your prospective supplier before you ever decide to order from them.

You want to see if there is a listed telephone number and a contact form/email. Do not merely assume that contact information by itself is enough. Make the effort and contact them through these methods. Do they respond to the information on their website within a few hours or does it take days before you hear back? If you do get a response, how helpful is their answer?

Similarly, when are they available via phone? Are they available throughout the weekday during normal business hours, or do you find that when you call them, you often end up hearing nothing but a busy tone or just do not get a response?

Social media

Social Media IconsDetermine whether the supplier has a social media profile. Are they on Facebook, Google+, Twitter, do they have a blog of their own? If so, how active are they on these ventures? Do they provide information to their followers or are all the posts little more than self-promotion?

How many followers do they have? Finally, are they actively engaging their followers and addressing possible concerns, or are they merely just sending out gloating status update after status update?

Listing contacts/personnel

See whether the website actually has information about the key contacts of the company. While it might be comfortable to have the same contact whenever you do business with a supplier, it is still important to have other contact options if necessary.

If you do have a listing of the key personnel for the supplier, look them up online. Find out what type of information is available about these people online. This does not mean that you have to hunt down their Facebook address. It just means out finding out if they are mentioned online, either in a positive or negative manner.

The ‘about us’

There is one place on the website where the company has a chance to “gloat and promote” itself as much as it wants – their “about us” page. This gives them a chance to tell the reader why the company does what it does, what sets it apart from the competition, and where its passions lie.

Even though it is important that the company offer good customer service and good prices, it is also important that you can feel positive about the company you are in business with. Read the “About Us” section in order to get a good understanding of who the company is, where they came from and their vision…it is important to feel comfortable and knowledgeable about the companies you do business with.

Links to authority sites

How credible do you believe that the website is? Does it have lists of authorized manufacturers, certifications, service/warranty info, case studies/testimonials? Are you able to trace these back to ensure that they are genuine or are you just “taking their word for it?”

Tie-ins

Open For Business SignCheck to make sure that there is a physical location that you could go to if “worst come to worst”. The more physical locations there are, the better it is. Even though a single location is not necessarily indicative of a “fly by night” operation, having more than one available certainly increases the legitimacy and strength of the supplier.

Technical information

Pay attention to the accessible technical information that the website offers as well. There are few things more frustrating than having to wait for an email or a fax that might provide some solutions to a problem that you are having.

Having the information readily available is not just convenient; it can also mean the difference between hours of downtime and having the ability to start looking into solving the problem yourself.

The conclusion

As you can see, looking at the supplier’s website is not just about exploring the website functionality. It is also there to help you evaluate whether you believe that this supplier is going to be a long-term asset for you or if they might have packed their bags in the next few months.

Especially with larger, expensive purchases, keep in mind that you are also evaluating a supplier for their ability to offer ongoing support. If you think that their website is indicative of an inability to do that, chances are that you should think long and hard whether this is the right supplier option for you.

The Equipment Dealer Evaluation Guide

Even if everything looks good on paper, there are still a few questions that you want to ask your equipment supplier to make sure that you get the best deal possible on the equipment your business needs. When working with an equipment supplier for your business, the goal is a mutually beneficial business partnership. Once you have made your equipment selection, by asking these questions before you ever sign your name on the dotted line, you can save yourself the headache of working with a supplier that is just not going to be a good fit.

What are my payment terms?

This has to be one of your first questions, especially because at a higher price, you might not be able to afford the equipment unless the payment terms are suitable. You also want to see if you can negotiate the payment terms. Perhaps you are able to pay a little sooner than your equipment dealer would anticipate, does that lower the price a little?

Perhaps you can make a down payment for some of the equipment as well, would that reduce the overall cost? Most equipment dealers are going to want payment within the first 30 days, but you might be able to extend this to 60, possibly even 90 days. This could help improve your cash flow around the time of your purchase.

What are my total costs?

Dollar KeySometimes the lowest quote can be deceiving – especially if it does not include a host of “additional fees” that are going to be added later. Consider restocking charges for returns, fuel surcharges, or delivery fees. Those are going to add up quickly and must certainly be factored in when considering the overall price of your order.

For example, do you have to worry about renewing your warranty? Perhaps you have a one-year service contract upon purchase, but what happens after that year is over? What about additional services? Perhaps you have to consider training costs as well. Is training even available? Are these trainings delivered in person or online?

If you want to evaluate your Return on Investment (ROI), you need to be able to factor in all these additional costs. Perhaps a slightly more expensive option is going to cost you more money upfront, but your ROI ends up being far better because of additional benefits.

What happens during a delayed delivery?

In a perfect world, everything works out all the time, there are no delays, no mistakes, and everyone always has the product in stock. We do not live in a perfect world though. So what is going to happen if an order comes in late, what is going to happen if an item is out of stock (temporarily). Are you going to receive a discount for your inconvenience?

What if you NEED that equipment yesterday and the dealer is unable to provide you with it? Does the burden of finding a replacement fall on you or the dealer? The only thing that matters to you is that you get the equipment you need, but you need to know how to anticipate for this possibility.

When do I take ownership?

Until the issue of taking ownership causes problems, most business owners will overlook this factor. Do you take ownership after a certain grace period or as soon as it is delivered? With some equipment you can tell right away whether it works or not, with other equipment, you might need a few more days to ensure that it is in good working condition.

Especially when you are still in the negotiation phase, try to include a contract clause that would provide you with three to five days before you take ownership. This gives you a chance to determine whether the equipment is functioning according to your needs and specifications.

QuestionsWhat might generate a price change?

When budgeting for future equipment purchases it is critical to get an understanding of your suppliers pricing policies. When people hear “price change” in reference to an equipment dealer, most of them will always assume that it is just a nice way of saying “price increase”. Some suppliers are going to raise their prices every few months/years, ask them what situations might lead to a price increase. Do they tie their prices to an industry index or to inflation? Remember when planning for the future, it is impossible to factor in the prices that are relevant today. You have to be able to factor in potential changes.

It is also important to ask whether you get a heads up about these changes, how long before the price increase happens do you receive a notice from the supplier? What if the costs for the supplier go down, does that benefit you financially, or do your prices remain consistent regardless of any financial windfalls for the equipment dealer?

Can you lock in prices?

It is also good to know if you can lock in costs for a specific time frame. With many different suppliers increasing their prices over time, it could be difficult to plan for your long-term financial future if you do not know how much your supplies are going to cost. Locking in a specific cost for a period of time will help eliminate that uncertainty.

What are their authorizations?

Does your potential supplier have authorized manufacturers? Have they obtained a number of different certifications? This not only means that they are “not just doing this for fun,” but it also means that they are able to provide you with technical expertise in relates to your product. If you have the choice, going with a certified supplier with authorized manufacturer relationships is often the best option.

Can you give me a liability insurance certificate?

In the event that their parts or products malfunction, you want evidence that they have adequate liability insurance to cover any damage/downtime, and you want it in writing. Even though it sounds like a hassle, make sure that the policy is being renewed by requesting another copy of the liability insurance certificate yearly.

Do they offer training?

If you are buying a $10,000 machine, you would like your staff to be able to use it properly. Does your supplier offer training for your new product? If so, is this onsite training or is the training done online? This can be a major difference depending on the type of supplies that you are buying.

How well do they know your industry?

This is an important question that purchasing managers often overlook – how well do these suppliers know your business category? Especially if you are buying products that you have very little information about, it is always good to have experienced suppliers think along with you.

What about payment options?

Payment OptionsIf you want to give yourself some financial leeway, you want to make sure that there are different payment options, other than cash, available that match your needs. Perhaps you can look into business loans or equipment leasing with or without an option to buy. This is going to depend on your business needs, but you should be able to find out if there are more favorable payment options available.

Parts and supplies

What happens when you need parts or supplies? Are these in stock? If they are not in stock, how long does it take before you get your delivery? There is nothing more frustrating than needing a replacement part right away, only to find out that it is going to take days, possibly even weeks to be delivered.

Who is my key contact and when can I meet them?

You know that while you value all of your employees, not everyone is the same. There is always a resource at your equipment dealer who might be a better fit for your particular situation than someone else. Remember that you deserve to know who your contact person is before you sign, especially considering that they will be a key to your success.

You do not have to meet your contact face-to-face, but it would be nice to talk over the phone and have a quick overview of this person’s bio. You may even want to ask for references on your contact if you believe that your project is critical and visible to your stakeholders.

Can you get me three references?

Now you do not want to start asking for references unless you are serious about doing business together. Just as you would not want to give equipment supplier information that is not relevant until you are going to move forward. If you were not ready to make a decision, most equipment dealers would probably prefer if you do not call their customers. This means that it is important that you know what you want to ask possible references.

You should also ask for a reference that decided to stop working with the supplier altogether. This strategy can give you some valuable insight that you might not get from otherwise happy customers. Perhaps they are able to tell you why they left. Perhaps they left because they went out of business, had no more need for the equipment, found the equipment dealer to be too expensive, or had some other reason not to want to business any more. This might provide you with some highly valuable insight and assist you in making the best supplier decision possible.

How Stable is Your Equipment Supplier?

Considering Your Supplier Stability

When shopping for a new equipment supplier, buyers will often look at whether the supplier is able to offer good prices, good quality, and many other critical factors. However, it is equally, if not more important to be sure that the supplier is able to deliver on the commitments that they make to you and that they are financially stable.

Financial StrengthIf you choose the wrong supplier, it can lead to a number of different issues. This is not merely limited to an inability to get the promised solution and service, but having to replace a partner is not only cumbersome and time consuming, but it might cost you a great deal of money as well.

A warranty of five years is great, but what does it really matter if the supplier is out of business in six months? This is not just about losing a supplier; this is about no longer having the ability to receive technical support, perhaps even losing access to your warranty. These are situation that you want to avoid, if at all possible.

Why you cannot rely on basic information

The first thing that we have to do is realize the limitations of traditional historical financial data. Do not merely request your prospective supplier’s financial statement; ask for credit reports on a rolling basis (as frequently as the seller is able and willing to provide them).

Current financial information can be misleading however. Remember that it is often too late once the bad news creeps into a financial report. If you only look at periodic statements to determine your risk, you only receive a snapshot of the company’s health several months or quarters ago.

Assess Financial RisksTry to determine whether this company is gaining or losing customers. Be aware of the conversation that surrounds specific suppliers. If you want to know what companies are saying about their vendors, check the social networks.

The important thing to remember here is that you cannot and should not base your opinions on your emotions. Do not rely on references either. There is real data available if you are willing to do your homework, make sure that you obtain that data. That will help you make a rational and logical decision about what supplier is best for your business.

Important factors to consider

Aside from the aforementioned resources, there are some other key factors that you should pay attention to when comparing your potential suppliers. While none of these are necessarily indicative of a failing or flourishing business, they will be able tell you a little more about the overall strength of the supplier:

  • Years in business – Granted, a 10-year old company can go out of business just as quickly as one that has only been around for six months. Having said that, a more tenured business usually makes customers feel more comfortable, it means that the business has established itself and continues to operate. This means that it is doing something right.
  • Authorized manufacturers – Depending on the “seal of approval” that the supplier has, this means something. It means that a manufacturer has actually agreed to allow the supplier to represent them. Most manufacturers would not make a poorly managed company an authorized manufacturer. If your supplier is an authorized supplier, it is a good sign.
  • Number of employees – A supplier with 10 or more employees does not merely mean that it is an established business, it means that there is likely enough business to require multiple employees. Again, a one-person enterprise can work just fine, but if you are concerned about this supplier being here in the future, going with the more established option is a good choice.
  • Number of locations – The same thing that goes for employees goes for locations as well. It might be straightforward to “pack up and leave” with a single location, but if there are multiple locations, chances are that this is an established supplier.
  • Certifications – A certification, especially one that can take a while to obtain or costs money, means that the company is serious about establishing itself in the industry. Companies that have no certifications are not necessarily “bad”, but they have done nothing to establish themselves long term. Certifications also demonstrate that this supplier is competent in the equipment that you buy from them, they are able to train you in using it or service it accordingly.
  • Trade association memberships – The same that we just said about certifications can be said about trade association memberships as well. It shows that the supplier is serious about its business and wants to establish itself and it has been validated. This not simply a “hobby,” this is a professional organization.

The importance of scalability

Chances are that you start with modest orders, but what happens if your business is in a rapid growth mode? What if you make the decision to expand your business? Is your supplier going to be able to deal with that, or are they barely able to meet your needs right now?

Profitable PartnershipsGranted, this might not always be important for your supplier. Perhaps you are perfectly happy with your current size and you do not envision ever expanding. At the same time, this IS an important factor for those with big dreams. It is going to be frustrating if you find that you have to find another supplier (or change suppliers altogether) if you grow larger.

Even if you are happy with the current structure of your business, you cannot predict the future. Perhaps you have amazing opportunities that present themselves at a later date, you want to be able to have the option to grow if that opportunity does come along.

Check different sources

If you are unsure about your potential supplier’s financial future, you can check their credit report as well. For a relatively modest fee, you can gain access to information from financial reporting resources such as D&B, Cortera, and Experian.

Remember that while you might just want to check out a single one, there are differences between the three options that make it worth looking into more than one. For example, Experian does not collect any self-reported information directly from debtor businesses while collecting all of its information through third party data vendors or providers and a network of Accounts Receivable contributors. This means that it is not possible for a company to influence its own credit rating. You have to look for yourself and see which best matches your needs.

Even though they are not always unbiased, it is also a good idea to check out information that you can find online. Are business sources suggesting that the supplier is having financial difficulty? Are people complaining about delayed payments on social media? It might take a while to find this information, but it is certainly worth doing your homework if it means that you avoid going with the wrong option.

The conclusion

Granted, this seems like a lot of work, especially if you would prefer to have your vendor selected yesterday. Remember that choosing a vendor that will be out of business or otherwise unavailable within a few short months has lasting consequences.

It might be frustrating to look at the all the information listed here and compile the different factoids about possible suppliers. However, if you compare that to having your equipment break down only to find out that you no longer have a dealer that can support it, it sounds like an easy choice.

Equipment Acquisition: New Vs Used – Part 3

Equipment Acquisition: New Vs Used

Part 3 of 3: Pros and Cons of Buying New

In this, our third and final blog post in the ‘new vs used’ blog series, we are going to discuss the pros and cons of buying new equipment for your business.

New EquipmentA lot of businesses consider buying new equipment a first and preferred option, though there are admittedly some pitfalls involved. First of all, buying new is more expensive. For companies that don’t have a lot of money, this can be a negative. But on the other hand, buying new also offers a lot of positives.

Let’s get right to the pros and cons—starting with the biggest challenge associated with the ‘new’ option.

Buying new is more expensive

There really isn’t any way to sugar-coat it—buying new can sometimes cost twice as much as buying used. You’re looking at spending the maximum amount on your equipment if you utilize this option, regardless of the method of payment.

Once a piece of equipment leaves the factory and is purchased by a business, its cash value slowly begins to depreciate. This is why buying used tends to save business owners so much money initially.

Getting a bank loan to cover the costs of new equipment can be difficult

Bank loans aren’t always easy to obtain. They require a ton of paperwork, will require you to Bank Loansjump through dozens of hoops, and can take weeks or months to authorize. Approval is also dependent upon a good credit score—which is something that not all businesses have to work with.

On a somewhat related note, equipment leasing can be used to obtain new equipment without going to all of the trouble that bank loans put you through. In fact, equipment leasing can usually be obtained within a couple of days, allowing you to have your new equipment installed and running in little more than a week’s time.

The payments on a lease are a little bit higher, but a lease is also much easier to get. Plus, they allow even smaller businesses to acquire high-dollar gear for low monthly payments. With equipment leasing, you also usually get a $1 purchase option at the end of the lease term (depending on the type of lease that you get) that will allow you to own the equipment outright anyway—which is a win-win scenario that many businesses nowadays are taking advantage of.

Buying new might save you money in the long run

While buying new might seem like the more expensive option, you may find that crunching the numbers tells a different story. In all actuality, buying or leasing new equipment might really save you money, and here is why.

First of all, you get a better warranty when you buy new. Some used equipment does come with a warranty, but these warranties are almost never as good as what you get when you buy new.

Secondly, new equipment has not acquired the wear and tear that used equipment has. When you buy used, you are actually buying something that has already been through the grinder. You are investing in something that has probably given the best years of its life to another business. How long is it really going to last you? How long until you experience problems or breakdowns that you are going to have to pay to fix?

When you buy new, you know where your equipment has been

When you buy used, you often have no idea what you are investing in. You might be investing in something that fell out of a truck and had a few parts replaced—but how many other parts are going to give out as well?

This lack of surety is something that comes automatically with used equipment. But when you buy new, you usually get a good warranty and the peace-of-mind that comes from knowing that your investment has only recently come off of the assembly line. This means better reliability, a longer life span, better performance, and probably money saved.

Who should buy new?

Lease Vs. BuySome companies might simply not have the funds available to buy new. For them, new equipment leasing might be a fantastic option, though buying used can also end up being a profitable avenue. You can admittedly get some great deals on used equipment, though a lot of companies end up deciding that the risk is simply not worth it.

If your company is looking to buy new but doesn’t really have the capital on-hand, then they might want to look into equipment leasing as a viable acquisition method. It’s inexpensive, fast, and easy. Plus, as stated before, you can usually own the equipment after the term of the lease for only $1—which means that you’ll still own it after everything is said and done.

Of course, in the end, it all depends on your business and your current financial situation. Choosing to buy new or used might not be easy—but a little bit of thought, a good look at your business plan, and an evaluation of your future goals can all help you to figure out what will truly be best for your organization.

 

 

Equipment Acquisition: New Vs Used – Part 2

Pros and Cons of Buying Used Equipment

This will be the second blog post in a three-part series in which we will discuss buying used vs buying new when it comes to equipment for your business—though in this post we’re more specifically going to address the pros and cons of buying used.

Old vs New EquipmentUsed equipment can offer a lot of advantages, but it is not without its share of negatives. Every business is going to need to buy equipment at some point, and sometimes buying used makes a lot of sense. But when is it a good idea to buy used, and when would you be better off buying new? Better yet, what are the biggest pros and cons of buying pre-owned tools, machinery, or equipment?

These are the questions that we’re going to be addressing in this blog post.

Buying used is less expensive

Used equipment is generally going to be less expensive than new equipment—and for good reason. Used equipment has already depreciated in value at least a little bit due to wear and tear. It might also be a little ‘behind the times’ technologically speaking, though this isn’t always a big deal.

Machinery with an older LED display, for example, might not have any serious advantages over Money Saving?a newer piece of machinery with a full-color LCD computer display. If both of them will do the job and do it right, then you might be able to skip the ‘luxury’ of the newer full-color screen in order to save money.

As a general rule, buying used is going to cost you less—at least in the beginning.

You can procure used equipment with affordable financing options

Sometimes, buying used is inexpensive enough to prevent you from having to bother with payments, loans, or financing at all. When this happens, you can pay in cash and own the piece of equipment outright without any additional or recurring costs (aside from maintenance and upkeep costs).   This is especially good news for businesses that are credit challenged or that can’t get approved for a bank loan.

Some used equipment can still be rather costly, especially some types of construction or industrial equipment.   In these cases, many equipment financing companies have more liberal financing policies that your typical bank.  Instead of utilizing valuable cash flow, extended payment terms are available to make even used equipment purchases more affordable.

 Buying used can be risky

Some people and/or businesses buy used equipment because doing so can offer a better bargain—but it can also come with a risk. Since you aren’t the first person to have owned it, there is a possibility that it was not always well-taken-care of. The previous owner might be able to tell you a lot about where it came from, how it was used, and what you can expect—but sometimes it’s nearly impossible to get this kind of background.

So what do you do then?

Unfortunately, there is often nothing to do but to choose whether or not you are willing to take the chance. Sometimes, buying used is a ‘roll of the dice’. You’re never quite sure how long it is going to last, how much it could cost to repair, or how long it will be before you are forced to buy the same thing again.

Another note on ‘Refurbished’ equipment:

It should be noted, once again, that buying refurbished equipment will usually negate this issue. Refurbished equipment is equipment that has been thoroughly re-vamped to be basically ‘like new’, and almost always comes with both a warranty and a condition report that fills you in on where it came from and what was done to it to restore it to its factory condition. Refurbished equipment might not be as inexpensive as used equipment, but it is often a less expensive option than buying new and should always be considered when you are getting ready to make an equipment purchase.

Used equipment does not come with a warranty

Some people tend to care more about warranties than others. I’ve known people who loved to take their chances on used gear, and I will admit that I have seen them get some incredible deals. But I have also known people who have taken chances and gotten burned when their purchases broke down a week or a month later.

Risk MeterAnd of course, one of the worst things about buying used (especially if the tag reads ‘as is’) is the fact that you don’t usually get a warranty. If you buy used equipment and it doesn’t come with a warranty, then you’re going to be personally responsible for either repairing or replacing it if something goes wrong.

Again, refurbished equipment will not give you this same problem. Refurbished equipment usually always comes with a warranty.

Who should buy used equipment?

If you run a small business and don’t have a lot of start-up capital, then buying used can get you started for less money up-front. You might also be able to buy used if what you are buying is not going to be a critical part of your daily processes. If it is a tool or a piece of equipment that you don’t use on a regular basis, then it might make sense to buy it used so that you can spend more on new gear that you will be using day-to-day.

You could also benefit from buying used if your organization has a maintenance department that could potentially perform its own repairs on the item. This could save you money and reduce risk on your end.

Make sure to check back for part 3 of this three-part blog series.