In a recent independent survey of 1400 Small Business Owners (less than 10 million in revenue) that make at least 2 equipment purchases per year, found:
- 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 downtime
- Companies that pay cash for equipment have more employee turnover
Think about it–the longer a company retains 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 the rental expense, nor maintenance or even cash flow spikes- it’s employee turnover.
Business owners’ single biggest expense is most likely labor. Their people. Finding good ones seems to be getting harder and the cost of losing one and then finding another good employee is extremely expensive and disruptive to a small business. When a 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.
And now a thought…….Financing allows 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 businesses and more to the point- their employees -have the tools to do the job.
Cardinal Business Financing, Inc. has been working with small businesses to create an equipment acquisition plan that will improve employee retention and improve their overall profit picture. Cardinal offers a variety of lease and finance programs to suit the needs of any small business. Call us today for a no-obligation analysis of your business’ equipment retention schedule. Call “The Cardinal” at 866-578-5999 today!
Written by Nicole Hall/SLS