Business Link

In Ali Baba and the 40 thieves, the bad guy offered to swap new lamps for old. The underlying message was that old things may have more value than the shiny new ones. Businesses are often faced with a choice between new and refurbished (or old).

Questions to ask yourself when considering upgrading equipment…

Is the old equipment so out-of-date that it affects your productivity and bottom line?
Is the old equipment stopping you from being competitive against newer companies?

In some cases buying new makes business sense. Port Elizabeth-based Noelex Labels has invested in a specialised R2.7 million self adhesive label printing press. “It is one of only thirteen in South Africa,” says Robin Manthé, who co-owns the business with his brother, Steven. The press cuts down on printing time and costs, and because it is one of only thirteen in the country, the company is more competitive.

Can the new equipment improve your business efficiency and service to customers?
Would a used version of the same item work as well?
Are second-hand models available?

Vehicles
If you run a business which relies on transporting products to the customer, you need a reliable vehicle. Small transport vehicles such as the Volkswagen Caddy retail for approximately R180 000 new.

According to www.autoworld.com, second hand VW Caddy’s retail for approximately R100 000. Larger vehicles such as the Toyota Land Cruiser Pickup retails for up to R345 000 new – and there are presently bargains in the second-hand market.

A new vehicle is a large investment, particularly for a small business. Consider purchasing a second hand vehicle in good
condition.

How does the cost of upgrading equipment compare to refurbishing equipment?

Are there competitively-priced, reliable suppliers of the refurbished equipment?

Computers
Managing your own business means you’re always on the move – visiting clients, checking out new stock, overseeing staff etc. It’s important to stay in touch and be easily reachable at all times, but technology (although useful) is often very expensive.

A new laptop with basic features will set you back close to R8 000 before software and add-ons. If you aren’t a power user, consider a refurbished one.

There are numerous online stores offering very reasonable deals. One example is a HP laptop with good specifications available for less than R4 000. Another reseller had several Dell laptops available for between R2 700 and R4 000.

How “big” do you need to go when upgrading?

Do you need the top-of-the-line, high tech version, or is there a less-expensive version which suits your company needs?

Pic: Upgrade Laptop – If you need a laptop for basic administration, you can purchase a high quality, refurbished unit for less than half the cost of a new one.

Other Equipment
Businesses are advised to shop around and ask for advice when purchasing a product that they are unfamiliar with.

Make sure that it meets your needs as well as your budget. For example, if you are considering upgrading your office equipment (fax, printer, scanner, copier) there are many four-in-one machines available. This type of machine will save both time and space.

Pic: Upgrade Printer – Find out what your business requirements are and don’t overspend on technology you don’t need.

However, if you only really need a simple printer, don’t get talked into purchasing a four-in-one machine. A middle of the range laser printer will meet your needs as well as your budget.

Is the cost of the new equipment all-inclusive?
Does the new equipment require training, and what is the cost of that training?
Is there local support for the equipment and software?

Training can be expensive – from operators through to technicians to keep it working.

Too often companies purchase a nice shiny new copier, CNC machine or robot – only to find that technicians need to be flown in from Gauteng or Germany to make it do what the
sales literature says it does – and then again to fix it.