Renting verse Buying Equipment!
As stated in the last chapter, one of the reasons most businesses fail is because they do not have enough money to make it through the start up period. The biggest expense is equipment. A welding, fabrication, machine or manufacturing shop needs a great deal of money to set it up properly. Do not purchase equipment unless you are using it daily, or have a contract for a job that requires it. Be aware, that those who sell new and used equipment are also predators. They have experience selling equipment to those who have a dream of owning a business, and buying it back from them when the dream fails. Business is a survival game made for those who have the most self control. What are you to do in this situation if you need equipment? Here are three options besides buying new or financing equipment:
- Buy Used
Renting equipment is expensive; but the cost is a lot less in the short term than buying it. If you only have one job, the lease or payment plans make a great deal of sense, and saves a lot of money. Renting works great, and keeps your cash free for other things. There is another option for you to acquire equipment. Many welding shop owners are struggling, unable to make their rent or mortgage payments; you can rent their equipment, shop, or even their personnel. It is done all of the time and the owners who are renting use the extra money you pay them to remain in business. You can rent an entire established shop with all of the bells and whistles that you will need for just a few hundred or thousand dollars for an entire month, or for a single job. All you need to do is ask around, a lot of shop owners will be glad to hear from you.
Partnering deals is another option. If you get a job and don't have a shop, equipment, or personnel, then partner a deal. You can take on bigger jobs and everyone is happy. Most welders are not good sales people so partnering with someone is more than welcome for most people. It is in many cases a financial life line to the struggling welding business owner.
Buying Used Equipment
Finally, if you need to buy equipment, and money is tight, and you do not have guaranteed work to pay for it, you may purchase used machinery. There are always welding shops shutting down because they can't get the business in the door or spent all of their money on shiny new equipment. Now you can buy that equipment for pennies on the dollar. A $5000 welder that is less than a year old might sell for $1500., and accessories that cost thousands, might sell for less than a hundred dollars. People selling this equipment, are predators living on the former welding business owner. These events happen every day and you may find these types of deals. Sometimes, you may find free equipment on these websites:
Or just type in "Used Metal Working Equipment" into a search engine and you will find more then you will know what to do with.
Just remember, whatever you do, buy used, rent, lease, partner or any deal you make, sign a contract, detailing the exact terms that everyone agreed to. This is very important.