Gregory Venter – LinkedIn Post – Considering the options – to buy or to rent?

November 28, 2019 | by digital@lkda.co.za

Considering the options – to buy or to rent?

By Gregory Venter, MD of Goscor Cleaning Equipment

Equipment is such an integral part of any cleaning operation’s day-to-day functions. In fact, next to the workforce, equipment is probably the most important part of a cleaning operation. The dilemma of buying versus renting often arises when cleaning equipment needs are in question.

As with most choices, there are pros and cons to each side, and there is actually no right or wrong answer between these options. However, facility managers/building service contractors need to know when renting machinery would work best for them and when buying machinery would work best for them. With that in mind, Goscor Cleaning Equipment (GCE) offers both purchasing and rental options to our customers.

To determine the most appropriate option for your operational and economic profile, it’s important to look at the pros and cons of each option, as well as the facility or business’s budget, specific needs and any unique constraints, as there is no one-size-fits-all approach when it comes to the procurement of mission-critical assets such as cleaning equipment.

Rental

At GCE we offer both short and long-term rental options. With the instability of the economy, influenced by factors that fall outside the control of industry participants, it is our belief that businesses need flexible options, and as a leading provider of cleaning solutions, we must be able to deliver on that.

Flexibility is crucial. If a company rents equipment and the market deteriorates, they are at least in a position to return the equipment to the supplier. On the other end of the scale, if they win projects or take on new work, they can still hire more equipment to meet their expanding needs, without taking on greater risk.

Renting offers a company flexibility, allowing it to easily adapt to business fluctuations and, depending on a company’s financial strategy, rent payments can be considered an operating expense. In most cases, rentals can also be delivered directly to the worksite.

Rental is a perfect fit for short-term jobs where companies want to meet unplanned or infrequent cleaning equipment needs. However, if  the need for a specific piece of equipment arises often enough, the option to purchase the machine outright is probably the better choice.

For instance, renting may be the best option if the building exterior or parking lot is only swept once a quarter and is also ideal for annual deep cleans, such as spring cleaning. Money saved from making a significant capital outlay on equipment that’s not utilised often, can be redirected towards upgrading existing models with more advanced features.

For cleaning contractors, renting may be a way to avoid paying for equipment storage if contract circumstances change. Additionally, if the rented equipment is only needed for one specific client, the rental cost can be built into the contract. Renting also offers the opportunity to try out a piece of equipment before committing to buying it.

The advantage of renting from a reputable organisation such as GCE is twofold; we offer full-time, skilled service personnel, whilst also keeping stock of a large inventory of parts to service the equipment. During lengthy rentals, we identify when a piece of equipment needs scheduled maintenance and service personnel is deployed to the site accordingly.

However, if renting the piece of equipment will cost as much as or more than owning it, then it makes more sense to buy the unit. It is important though, to plan carefully and look at the risk and to take a cost-comparison approach as the equation entails forecasts of the future business climate.

Outright purchasing

But, what happens when rental needs for cleaning equipment become more frequent? When can facility managers decide that the time is right to stop renting and purchase the equipment?

When a business has a frequent need for a particular piece of equipment, I believe this to be a good sign that buying is the best choice. This gives you the opportunity to have the machine at hand when needed, or if you work in an industrial environment, this could help boost your productivity to an even higher level.

Ownership also allows operators to become highly familiar with the machines, which increases productivity. Purchasing the equipment outright also enables businesses to take advantage of tax deductions from interest, depreciation and maintenance costs.