Technology is Used, Not Owned: Leasing Business IT Equipment
From basic desktop computers to complex network infrastructure, all businesses need some sort of technology to operate. With the amount of technology necessary to compete in today's economy, how do businesses maintain margins and absorb ever-growing IT costs? Leasing is an option that reduces your initial investment and allows for the flexibility to adopt new technology based on your business needs and not capital budgets.
Leasing larger office equipment like multi-function printers and copiers has been commonplace since Xerox introduced the first commercially available copier in 1959. Leasing and financing other large purchases like manufacturing equipment and heavy machinery is also a widely accepted standard business practice.
Since the cost of IT equipment is steadily decreasing, it may seem surprising that the idea of financing those purchases makes more sense now than ever. The reality is that as the cost of IT equipment decreases, the speed, power, and functionality of technology increases dramatically. If your business hopes to use technology as a mechanism for business growth, you need to find a way to purchase equipment at a lower cost but higher frequency in order to stay competitive.
Cell phones are a perfect example of this. The first commercially available cell phone could only make calls and cost several thousand dollars in 1984. When the iPhone hit the market in 2007, users could make calls, send text messages, check email, surf the web, and listen to music for the low cost of $499 and a two-year service contract with a cell phone carrier. Plus, 12 to 18 months into a standard cell phone contract, users had the option to upgrade for another small investment and contract commitment.
Today, most carriers have moved away from the service contract model all-together, and simply lease the device to you as an add-on to your monthly service charges, with annual, penalty-free upgrade options.
This model allows consumers to pay one monthly fee for the use of the device, as well as service and support. This model offers the flexibility to upgrade frequently as technology advances. Essentially, the device itself has become part of the service.
This "technology as a service" model makes a lot of sense for the technology that runs your business as well. It is critical for your business to use relevant technology, which requires you to update it often in order to remain competitive.
IT equipment financing offers that flexibility without the burden of large expenditures in your capital budget. Additionally, many managed service providers or outsourced IT vendors offer ongoing service and support included with your lease in one monthly payment. This model is almost identical to what you've already adopted with your cellphone.
Tech Equipment Becomes a Predictable, Budgetary Expense
By paying monthly, you don't have to worry about when to budget for large cash purchases of new technology. You're essentially paying for the technology and service you use, as you use it.
This payment option increases positive cash flow, allowing you to invest back in the business on items with greater returns on investment like employees, advertising, or inventory.
newer Technology Offers a Competitive Edge
Your IT team should constantly audit your environment looking for new technologies that offer improved efficiencies. With monthly payments, you're easily able to switch out old technology for new without drastically changing your monthly expense.
This allows you to maintain your competitive edge by leveraging the best technology to advance your business.