In a recent independent survey of 1412 Small Business Owners (less than $10,000,000 in revenue) that make at least 2 equipment purchases per year…
- Companies that pay cash for equipment keep equipment longer
- Companies that pay cash for equipment have higher maintenance expenses
- Companies that pay cash for equipment have more equipment down time
- Companies that pay cash for equipment have more employee turnover
Think about it–the longer you keep equipment the higher the maintenance expense. Higher maintenance expenses typically mean that there are “down time” expenses because of equipment failure. And while these events are occurring, small businesses are perhaps missing the single biggest negative impact.
The most damaging by-product of the “pay cash and run it till the wheels fall off” strategy is not rental expense, maintenance or even the pain of cash flow spikes—it’s employee turnover. As a business owner your single biggest expense is most likely labor. Your people. Finding good ones seems to be getting harder and the cost of losing and then finding another good employee is extremely expensive and disruptive to a small business. When your company is using older technology and equipment leading to issues of “down time” and inefficient performance—employees leave.
82% of 7,226 small business equipment operators (from entry level to advanced in industries ranging from construction to IT) said current equipment was a major factor in their job satisfaction.
No wonder the same research revealed that companies that paid cash reported higher turnover among equipment operators. Financing allows for companies to stay on the cutting edge of technology – a simple monthly payment for a period of time, only to replace the equipment at the end of the finance term with the newest model and/or technology. Financing executed the right way becomes a program to ensure your company and more to the point—your employees—have the tools to do the job.
And don’t sleep on the small stuff. Many times business owners wouldn’t think of not financing the $100,000 purchase, but are paying cash for the next 3 laptops or the used trailer. These items are often the most impactful to the employee experience and from a financial point of view can add up to be significant monies.
The right finance partner can help. For more than 30 years SLS has made commercial equipment more affordable for businesses like yours. And by opening your mind a bit, you might just build a better work environment along the way as well. Let’s talk.