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Choosing The Right Business Equipment Investment Is Part Science, Part Intuition


The tools of the trade, as the machinery or systems one uses to accomplish the job, are as unique as each
place of work. What they have in common is they are used by one set of personnel, but purchased by
someone else. Depending on the product or service being developed, the business equipment investment can
be a major cost of daily operation.


This is an area that creates a constant conflict between line workers and senior management. Because the
labor force uses the machinery every day and frequently all day, they have a vested interest in how they
work what type and their ease of use. Management views it as a cost of doing business, and thus can
frequently develop the tendency to believe that the less expensive it is, the better.


There are some industries where the machinery used in developing the core of the business is so enormous
that it must be uniquely and individually crafted, and selecting improperly can have devastating effect on the
entire company. Deep water oil drilling is such an enterprise, as the selection of where to drive is an
educated guess, even with the most accurate geologic analysis.


Once a plot or span of ocean floor has been successfully negotiated and authorized for drilling, the parent
company has to decide what it will use to first determine if there is oil there, and how to extract it. The cost
of a single actual drilling rig used in the Gulf of Mexico, for example, exceeded one billion dollars. Given
such a price tag and the very real dangers of such complicated drilling, if the site had not panned out, it
could have caused company bankruptcy.


In addition to the macro understanding of the scale and scope of such an undertaking, other significant risks
had to be determined and decision made, without perfect data to analyze. The type of soil substrates not only
make the identification of potential hydrocarbon resources sketchy, they complicate the drilling process,
meaning one of several different types of machinery will work while others will not.


This means that if the owner needs to replace the ink cartridges twice, he would be better off buying another
new machine. Of course there are many variables that might make that practicable, for instance if the pattern
of use led to the initial set of ink lasting over a year, then a new machine each year might make sense. But if
the machine, which is designed for heavy use, is actually used consistently, then it might make more sense
to invest in one that uses less expensive cartridges.


The bottom line is ironically, the financial bottom line when it comes to business equipment investment. The
employees want machinery they can use comfortably, so ergonomics is important, and management wants it
to have the most reasonable life cycle cost. Ideally, management should work together with labor to
determine which company tools meet each of their needs the best.



equipment finance

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Choosing The Right Business Equipment Investment Is Part Science, Part Intuition

  • 1. Choosing The Right Business Equipment Investment Is Part Science, Part Intuition The tools of the trade, as the machinery or systems one uses to accomplish the job, are as unique as each place of work. What they have in common is they are used by one set of personnel, but purchased by someone else. Depending on the product or service being developed, the business equipment investment can be a major cost of daily operation. This is an area that creates a constant conflict between line workers and senior management. Because the labor force uses the machinery every day and frequently all day, they have a vested interest in how they work what type and their ease of use. Management views it as a cost of doing business, and thus can frequently develop the tendency to believe that the less expensive it is, the better. There are some industries where the machinery used in developing the core of the business is so enormous that it must be uniquely and individually crafted, and selecting improperly can have devastating effect on the entire company. Deep water oil drilling is such an enterprise, as the selection of where to drive is an educated guess, even with the most accurate geologic analysis. Once a plot or span of ocean floor has been successfully negotiated and authorized for drilling, the parent company has to decide what it will use to first determine if there is oil there, and how to extract it. The cost of a single actual drilling rig used in the Gulf of Mexico, for example, exceeded one billion dollars. Given such a price tag and the very real dangers of such complicated drilling, if the site had not panned out, it could have caused company bankruptcy. In addition to the macro understanding of the scale and scope of such an undertaking, other significant risks had to be determined and decision made, without perfect data to analyze. The type of soil substrates not only make the identification of potential hydrocarbon resources sketchy, they complicate the drilling process, meaning one of several different types of machinery will work while others will not. This means that if the owner needs to replace the ink cartridges twice, he would be better off buying another new machine. Of course there are many variables that might make that practicable, for instance if the pattern of use led to the initial set of ink lasting over a year, then a new machine each year might make sense. But if the machine, which is designed for heavy use, is actually used consistently, then it might make more sense to invest in one that uses less expensive cartridges. The bottom line is ironically, the financial bottom line when it comes to business equipment investment. The employees want machinery they can use comfortably, so ergonomics is important, and management wants it to have the most reasonable life cycle cost. Ideally, management should work together with labor to determine which company tools meet each of their needs the best. equipment finance