Construction companies use large, expensive equipment in the building site preparation and in the construction of the building. People with the dream of owning their own construction business often have to start out with minimum equipment they found at bargain prices or even rented equipment. As the business grows and larger jobs are taken on, this equipment might not be good enough. There are signs that indicate the need for upgraded construction equipment.
Consider Purchasing Newer Equipment at Online Auction Sites
One way to purchase upgraded equipment as the construction company grows and equipment needs to improve is to try online auctions. So, begin to shop online auctions to see what is available. Before it is time to try to purchase new equipment online explore the equipment auction sites and their rules, and ways of operating. What services do they offer? What expenses will the buyer need to plan on? Can a business owner get financing to purchase equipment online?
Signs That Indicate a Need to Upgrade Equipment
No one wants to spend the money to upgrade equipment unless there is a real need to do so. But, how does a construction company owner know when it is time to upgrade equipment?
- Is the existing equipment meeting job needs? Does the existing equipment have the capability to perform daily tasks required of current construction jobs? If the existing equipment is not capable of doing all the tasks, it may be time to rent a bigger machine to test out the return for the investment of bigger equipment. If the rented machine does a better job and will be used regularly, purchasing that piece of equipment may be justified.
- The equipment is too small for larger excavation jobs and is holding back the company. Study different sizes of equipment and consider whether each upgrade will be able to access current job sites. Consider dimensions such as width, height, and weight. Also consider things like storage, transportation, and daily loading and digging requirements. Does the larger size equipment work with other existing equipment?
- When large machinery needs increased maintenance and breaks down too often, it may be worn out and need replacing with upgraded equipment. Will the upgraded, larger equipment bring larger maintenance bills? The equipment must be dependable and not cause lost workdays and missed completion dates. The new equipment will need regular maintenance and before it is purchased, the business owner should arrange for a regular maintenance program locally.
- Fuel costs for older, worn-out machines may be higher than they should be because of machine inefficiency. The new larger equipment may also require more fuel because of its larger size. Newer machine may be more fuel-efficient leading to fuel savings when properly maintained. The fuel use will depend on things like engine size, condition of equipment, the load weight, operator habits, and environmental or weather conditions. The new machine’s basic design may affect fuel efficiency so check that out.
- Compare the costs of moving the existing equipment with the proposed costs of moving the new, larger equipment. The correct transport and towing vehicle cost is a consideration. Will the larger machine require special approval or permits to get from job to job?
- When it is time to upgrade construction equipment checkout several sources for the new equipment. Visit a local dealer for advice and equipment choices for the upgraded equipment. Give the local dealer a chance to bid the upgraded equipment. They may visit the site to help bid on the proper size of equipment, they may also offer maintenance programs and training for equipment operators. Renting might be another possibility, and purchasing equipment at online auctions is another choice to consider.
- The equipment might be outdated and hard to find places to repair it. It may not have the communication features that newer equipment will have. Worse, prospective customers may be commenting on how old or outdated the equipment is and question if it will be sufficient for their job. The company employees may be complaining about the old equipment and voice concerns about its safety.
Additional Reasons to Upgrade Equipment
Newer equipment looks more impressive to potential customers and may allow the construction company to bid on and win additional construction contracts. The newer equipment will be more eco-friendly and customers often demand that their construction company run a green business model. The newer electronic parts of construction equipment will lead to greater efficiency and less fuel use and less harm to the environment.
Newer equipment will probably be healthier and safer for the company employees to operate. Faulty safety equipment and other control mechanisms are just plain dangerous. The old equipment might not meet current health and safety standards and it may not be possible to fix old equipment to meet the new standards.
So, there are plenty of reasons to consider upgrading existing equipment. The equipment might not meet the companies growing needs. When a construction company owner considers large construction jobs to bid on, he or she must decide if they are capable of doing the job if they win the bid. If purchasing or renting larger or newer equipment will allow the company to grow and run more efficiently, it may be time to upgrade.
The newer equipment might actually save money as it uses less fuel and requires fewer equipment repairs. Another crucial aspect to consider is whether obtaining financing for purchasing new or upgraded equipment is feasible, and whether the business prospects justify investing in newer and superior equipment. It may be time to have serious discussions with business partners, financial advisors and lenders.
If the business is healthy enough and future prospects for construction jobs warrant the investment, it may be time to search for that newer equipment. The current and predicted state of the local and national economy might be an additional factor to consider. If an economy slow down or even recession is predicted, caution may be called for. Each business owner should do a thorough business study and future business plan to decide if one or more pieces of updated equipment should be purchased.
Then, the business owner must find the best plan to acquire newer equipment and how to get some money for the old equipment. Good planning means more success.