Buying new equipment for your gardening business is accompanied by a sense of enthusiasm and excitement for new opportunities that are bound to come up.
Since you want to maximize the return on your investment, it only makes sense to calculate the ROI you can expect in order to make the best decision.
Equipment purchases can often be tricky and have unexpected costs that can hurt your return on investment.
That’s why, in this post, we’ll be sharing some tips on how to get the maximum ROI when purchasing new gardening equipment.
How Often Is the Equipment Used?
To get the maximum ROI when purchasing new gardening gear, you should first evaluate how often the equipment you’re buying is going to be used.
An estimate of intended use is critically important if you want to maximize your ROI with new gear.
When you discover how often your employees will actually use the equipment, you will get a clear picture of how much you can expect to get back from your investment.
Therefore, to reduce the risks of investing in unsuitable equipment, work out how often you are going to use it in the following months.
If you reveal that your team won’t use the equipment as much as you thought, leasing it instead of buying is a great way to maximize your ROI.
If you lease the equipment, you won't spend as many resources as you otherwise would, which means that you can adjust your investment accordingly.
This keeps you away from getting minimal ROI from new equipment.
For example, when considering buying new gardening equipment that is used only seasonally, determine how long it will take for the investment to pay back.
If the gear is expensive to maintain and is not used often, buying it might not be the best investment.
In that case, you should consider renting, leasing, or even buying used equipment.
Determining how often your team will use the new equipment is the first step for evaluating the ROI you get out of your purchase.
Will an Upgrade Affect the Efficiency of Your Business?
A major benefit of purchasing new gardening gear is that it can improve your operations so you can complete tasks quicker and pick up more work.
If a piece of gardening equipment can improve your efficiency, it will directly translate into an increase in revenue, meaning that it will significantly contribute to maximizing the ROI on your new equipment.
More efficient gear requires fewer resources to operate, which helps bolster its ROI.
Since new gardening equipment is technologically more advanced than your old one, it will consume less energy and save you money in return.
When you achieve savings in resource costs, you get a return on your investment sooner.
According to a report by Grand View Research, the global gardening industry is bound to experience significant growth thanks to technological advancements that save time, energy, and operating costs.
New tech, such as robotic lawn mower machines, will boost the industry and open new possibilities for saving money.
New gardening tech has major potential for improving the efficiency of gardening businesses.
To get the maximum ROI when buying new gardening equipment for your business, take into account how much it will upgrade your efficiency and, that way, save your resources.
Does It Require Additional Training, Setups, Storage, or Ancillary Equipment?
If you want to get the maximum ROI when buying new gardening equipment, you should also consider what expenses you will have to deal with immediately after making the purchase.
For instance, upgrading to larger gardening equipment often requires upgrading to a larger storage facility.
Since storage upgrades cost money, those expenses will be directly related to your new equipment.
This will put more financial stress on your ROI, which means it will take longer to get your investment back.
Therefore, when buying large gardening equipment, make sure to check if your storage needs are met first.
New gardening equipment can also incur additional expenses in terms of additional training, setup costs, and ancillary equipment.
When purchasing new gardening equipment requires other costs, they impact the ROI.
If you’re planning to upgrade, make sure you check what additional costs you’ll have to cover and adjust your budget accordingly.
For example, according to databy Fixr, building a storage shed for gardening equipment in the US can cost up to $33000, depending on the size and build quality of the storage.
In case you’re buying large, expensive equipment that needs to be stored properly, you’ll require a more costly storage solution.
New equipment purchases can often be tied with additional expenses.
You should consider what additional costs are attached to the new gear purchase because they can have a significant impact on your ROI.
How Will the Purchase Affect Your Cash Flow?
Purchasing new equipment for your gardening business will affect your cash flow, which is why you have to think things through thoroughly.
When getting a loan to buy new gardening equipment, your monthly expenses will rise. This means that you’ll have less spending money unless you increase the volume of work.
If you're not prepared for it, working with a reduced cash flow can negatively affect your business and cause you to stretch resources.
Before buying new gear, prioritize calculating how it will affect your cash flow.
Buying new gardening equipment can allow your business to take up more demanding jobs and achieve more revenue.
Higher-paying jobs will benefit the cash flow of your business and boost your ROI.
So, you should consider the revenue opportunities that new equipment brings before making a purchase.
For example, if you get a loan in order to be able to invest in new equipment, you’ll have to pay interest every month — along with possible additional investments, such as training, ancillary gear, or storage upgrades.
These costs can very well stress your cash flow and lead you to overspend.
Calculating how new gear acquisitions will affect the cash flow of your business is necessary for understanding how to extract maximum ROI.
What Are the Costs of Maintenance/Specific Fuel/Replacement and Expendable Parts?
Small businesses can’t afford to throw money on equipment that generates losses or is costly to maintain.
Gear tracking solutions are excellent for keeping on top of monthly costs.
They help you to account for how many resources you are spending every month on maintaining new gear.
Tracking uses software solutions to monitor the state of your equipment, so you’re aware of the maintenance and replacement costs.
Efficient asset tracking ensures your gear is in top working condition and the maintenance costs are minimal, so they don’t harm your ROI.
Unaccounted maintenance costs make it difficult for small businesses to achieve the maximum ROI.
Expensive, sophisticated gardening equipment can have specific costs that were not taken into consideration before the purchase.
If you want to make an accurate ROI calculation, you need to track the overhead costs of your new gardening equipment.
For example, if you’ve acquired tractor lawnmowers and you don’t track how much you spend on their specific fuel and maintenance, you can’t accurately estimate how much ROI you can expect.
You can end up having more overhead costs without fully understanding where those costs come from.
Data-informed knowledge about equipment-specific costs is necessary for accurate ROI calculations.
For achieving maximum ROI from your purchases, tracking equipment-specific costs is a must.
Purchasing new equipment for your business is always exciting, but you shouldn’t get distracted from the fact that new gear is here to make you money.
To get the maximum ROI from your purchase, consider these tips and make the best decisions for the benefit of your gardening business.