Economizing during a recession is a common trend, but is it always practical? For the last few years, concrete contractors have been cautious with purchasing new equipment—opting to either rent, or make do with what they already have.
Saving money, though logical during a down economy, could end up costing you more in the long run. So what goes into the decision of purchasing equipment? Do you purchase new and innovative products, or do you stick with the tried-and-true? Andrew Nevener, national training manager for Husqvarna, says contractors need to ask themselves, “Can this product make my business more profitable?”
With so many different products being marketed as new and innovative, investing can become a risky business. “We are always on the lookout for a better mouse trap,” says Mary Wilson, president of Michel Concrete Construction, Inc., Springfield, Ill. But she adds, “A truly innovative product creates a better way of doing something, not just a different way of accomplishing the same task.”
A few years ago, when the economy was strong and jobs were plentiful, it was common for contractors to make purchases of large and small equipment even before the ones they had were worn out. Today, there is more thought put into the process. Brad Schrock, general manager of Custom Concrete Co. Inc., Westfield, Ind., believes the condition of the economy over the past 4 to 5 years has rewritten the rule book for purchasing equipment. “We used to have a fairly standard system for replacement that was based on age, hours used, and repair schedules. In today’s economy we make things last as long as possible.”
Neal Weiler, president of Weiler Walls, Inc., Denver, Pa., says his company usually purchases one or two pieces of new equipment each year, adding, “Price is the determining factor.” Weiler says he is willing to spend the money on technical equipment, but when it comes to products like concrete pumps, sticking to what they know and have makes more sense in a tight market.
It is a shared feeling among many contractors. When it comes to larger pieces of equipment, unless it helps with the profitability margin, buying used or keeping their current fleet is the way to go. Bryan Birdwell, owner of Birdwell & Associates, Lakeland, Fla., adds that unless it truly provides him or his clientele a quality return on the process or product, he sticks with what he knows. Having recently purchased a riding trowel because of its power and ability to operate with ease, Birdwell says when it comes to making a purchase, “I consider the price point and how it will make money and save time.”
Making the purchase
After weighing out the pros and cons, taking the leap to purchase is an investment that can pay off. Chris Knipfer, marketing manager for Bobcat Co., says, “Manufacturers create new, innovative, or improved products to benefit the customer in a given market with an understanding the market will continually fluctuate. Since the product is created to improve the customers’ process, it applies to nearly all states of the market.”
If spending a little extra up front on something new can help your company stay ahead of the competition and make a profit in the long run, then making the purchase during a down economy makes more sense than holding back. Nevener adds, “The world would be nowhere without innovation.” In the construction industry especially, “when a professional contractor invests in equipment, they will save, and even make money, and in turn stay productive.”
But what if it’s a bad investment? Schrock says, “In this tight economy the best answer is to devote more time and effort than before to make the right decision. In some cases finding a comparable used piece of equipment is the best answer whereas in another area, it might be best to buy new.”
Before making a purchase, it’s best to research the buzz about a product. Talk to other contractors, attend trade shows and view demonstrations, or find out what industry associations are saying.
Buying something new just for the sake of it being new isn’t practical. But sticking to the tried-and-true just for the sake of saving money isn’t either.
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