If you own a mailbox store or are considering getting into the printing business having upfront capital can be an issue. If capital is an issue, leasing is a possible solution. By leasing your print finishing equipment like printers, binding machines, laminators, or business card cutters, you have the flexibility that purchasing the equipment may not give you.
Running any business involves a wide range of expenses, but for a small print finish shop equipment may be the most important, and biggest, expense. The question then becomes whether to buy or lease that equipment?
Business owners can be faced with many factors in the decision including the upfront costs, variable costs, business growth and taxes.
Upfront Costs
If considering buying equipment, there will be a substantial upfront cost with the purchase versus leasing. If purchasing, the equipment choice has the be the right one. Let's say you purchased a uv coating machine and binding machine, but customers are requiring laminating? Leasing gives you the flexibility to finance the laminator.
While leasing may be more, it could also include a maintenance agreement that purchasing would not. The binding machine breaks, the leasing company could just replace it.
Fixed versus Variable Costs
Leasing does add to your monthly overhead. Buying machines means the price is set. Leasing does give you the flexibility to upgrade equipment if your business grows. If you have outgrown your pouch laminator and need a roll laminator, your leasing company can help you with financing the new machine.
Growth Factors
This is where the flexibility of leasing can really come in handy. Say that you are a small business and you have a contract leasing a laminator and a binding machine. You get the opportunity to a big job for a prestigious client, but it requires a UV coating machine. You can arrange to add leasing a UV coating machine to your contract. And if you'll only need it for that one job, you can lease it short term.
Leasing offers flexibility. You may decide to purchase core machines that are known to last forever. Or, you may lease the machines you know technology will upgrade in a year. Or, you may decide to work out a rent to own.
Taxes
Leasing provides tax benefits for the life of a lease. Purchasing gives you a tax benefit in the first year.
So, should a company buy or lease their equipment? For a small print finishing shop the answer is to lease.
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