Renting: a financially smart option for small business
Starting a business is a huge endeavor for entrepreneurs, especially when larger expense items are on the required equipment list. During a business's first few years of operation, renting equipment, rather than purchasing it outright, can allow the company to save money and invest toward becoming established.
Entrepreneurs started more than 550,000 small businesses in 2009, the most recent year with data available, according to the Small Business Administration (SBA). Most of those businesses were financed through owner investment and bank credit, to the tune of about $80,000 a year, the SBA reports. That dollar figure doesn't stretch far when larger cost items like vehicles and office space are part of the picture. This is where renting equipment comes in handy. Some business items frequently rented include:
- Office space - Location is an important factor of doing business, but so is the cost of doing business in that location. Running a business out of your home is always the least-expensive option, and renting an office space or warehouse space - depending on the business - is usually the next best option for saving money. Renting also gives you flexibility to move if the rent goes up, or another space in a better location becomes available. However, because of low interest rates available for loans right now, it is a good idea to compare annual rent payments with potential mortgage payments, just to make certain that you're finding the best work environment for the best price.
- Vehicles - Many small businesses, from bakeries to flower shops, occasionally need larger vehicles for delivering products or transporting their equipment. Instead of purchasing a cargo van or refrigerator truck, contact Penske Truck Rental about commercial truck rentals for individual dates or on a repeated basis as the best solution for your business needs. Get the commercial truck you need when you need it, either with a guaranteed reservation or Penske's Rental Express program just for business that includes 24/7 roadside assistance. It's a great way to save money not only on the purchase of larger vehicles, but also the maintenance and upkeep.
- Phone and computer systems - With the speed at which technology is constantly updating, it's a good idea to review renting phone and computer equipment, rather than purchasing it. This works well for companies that have the potential to grow quickly - needing additional equipment - as well as companies where phones and computers are needed, but aren't an integral part of the business. The good news about renting is that as the latest updates happen with technology, you can easily update your equipment as well.
- Office furniture - If your business is a one-man shop run out of your home, it's probably a better idea to use the furniture you have on hand. But for entrepreneurs venturing into business with a small number of employees and office space, renting furniture is a great way to provide your workers with office furniture like desks, chairs, filing cabinets and even shelving units needed to go about business.
Careful management of budgets and expenditures helps small start-up businesses succeed. If you're considering becoming an entrepreneur and starting up your own company, look into the option of renting equipment to save money that could be better used in other areas of the business like client acquisition, supplies or marketing.
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