Everyone in business knows that you have to have the quality, reliable tools to deliver the best service to your clients. Unsuitable, poor quality, unreliable gear results in lost clients and lost income.
There is an old saying "the poor man pays twice", so when we try to save costs by putting off decisions or going the cheap option, sometimes the outcome is not ideal and we spend more money to fix the problem or we lose business. Either way we end up 'paying twice' which comes out of profit and is not good business practice.
Is it time for a review? - Motor vehicles, software and machinery - the 'gear' a business needs to perform efficiently will vary by industry and location, but a consistent theme of a well run business is a regular review of these needs.
The start of the financial year can be an ideal time to do this, when targets and strategies are being set for the next 12 months, new work contracts are being established and some early tax planning is in progress.
An important factor in planning is making sure working capital is preserved - the engine room of any business.
Also take advantage of the simplified Depreciation Rules for small business which allow an immediate write-off for assets costing less than $20,000 (refer to Complete Business Newsletter April 2017)
There is no sense in using all your cash to buy an asset that will have a working life of many years, if you have no capital left to run your business, buy stock or pay wages.
What financing is available? - Facilities such as chattel mortgage, lease and rental provide a range of financing options that can be tailored to best suit the needs of the business. Additionally, strategies that should be considered include:
· Matching loan terms to the working life of the asset.
· Structuring payments to match cash flow including seasonal considerations.
· Acquiring an asset to be used for a specific work contract with options at the end of the contract to buy or hand the asset back.
· Having the flexibility to upgrade an asset when your needs change
Take the first step in making sure you and your business are well equipped to succeed in 2017/18, contact this office on (07) 5439 1600 and talk with our in-house Finance Specialist to help you with the right finance for this purchase, or get a free no obligation review of your entire finance position.