7 Benefits for a Small Business...
Capital expenditures for computers, machinery and other equipment, are critical to maintaining operations and helping growth, small businesses in particular can yield significant benefits - here are 7 to ponder over...
1. Meet Changing Business Needs
Technology and manufacturing processes change frequently, equipment that's five or more years old can put companies at risk of losing their competitive edge. Investment for 2co in leading-edge technologies, enables us to be more agile and responsive as a business. It also better positions us to meet the growing demands for personalisation and short run digital print. For 2co, our new equipment also enables us to reach new customers and markets, plus offer new products and services.
2. Increase Efficiency and Productivity
Investing in new equipment has also increased efficiency and overall productivity as well as quality. This applies to any new equipment that is faster and better quality, with less waste, less maintenance, less resource usage and less human interaction. It’s important to note that these gains can also generate cost savings in the longer term.
3. Improve Safety and Security
Workplace safety also encompasses more than the physical safety of employees and their wellbeing. Outdated equipment, including computers and servers, can leave companies at greater risk of security breaches. New equipment is more likely to incorporate more sophisticated technical and security controls with anti-theft features. Depending on the new equipment, it may also help to reduce the impact and risk of harm to the environment by using greener consumables such as eco inks and toners - in our case!
4. Take Ownership
Some companies choose to lease rather than buy new equipment. Among the disadvantages to this option is that they are at the mercy of the leasing company. They’re unable to make updates or changes to the equipment when needed unless the leasing company allows it, and they may have to wait on the leasing company to provide needed maintenance. 2co purchases its’ own equipment, we can make modifications or additions when necessary, we can sell it when we need to upgrade, and additionally, there are tax advantages that come with ownership. For those companies who need finance, the Government Backed Loan Scheme currently in operation is another good reason to buy now.
5. Take Advantage of Tax Incentives 2021-2023
Between 1 April 2021 and 31 March 2023, companies investing in qualifying new plant and machinery will benefit from new first year capital allowances.
a super-deduction providing allowances of 130% on most new plant and machinery investments that ordinarily qualify for 18% main rate writing down allowances
a first year allowance of 50% on most new plant and machinery investments that ordinarily qualify for 6% special rate writing down allowances
Now, while this is a temporary measure it will make a big difference for many companies who are contemplating whether or not to purchase needed equipment right now, instead of waiting. For most small businesses it may be the catalyst to spring board them into a new market.
6. Remain Competitive
New equipment/technology can ease a customers’ mind about reliability and quality, while also attracting new customers due to increased speed or a wider range of capabilities.
It’s not just a matter of customer perception or a company’s reputation. Depending on the industry and company type, the lack of new equipment can make it difficult, if not impossible, to take on new work and provide the new products and services being requested.
7. Gain Access to Vendor Support and Warranties
Older equipment is likely to be out of warranty and guarantee of support. Once a piece of equipment has reached this stage, businesses risk downtime or complete outage due to outdated or obsolete parts, this can be extremely costly, especially if you have to rely on a sole independent engineer. New equipment typically comes with warranties, parts replacements, and manufacturer support. When there’s a question or problem, help is a phone call, email or online chat away.
Weigh the Pros and Cons
Before making any purchase decisions, businesses should assess their business needs and resources, and then review their options.
Deciding to buy often means an in-depth look at capabilities, lifespan, warranties, maintenance needs, and costs.
There’s the question of how to pay for the equipment. At 2co we have an ongoing review and renew policy so that we can maintain the highest standards, employing a scheme of saving to buy the next piece of equipment as soon as we make a new investment - this gives us greater flexibility when purchasing and more leverage when negotiating equipment cost.
BUT, for those needing a kick start the Government recovery loan scheme could help you to make that investment, with loans of up to £50,000 available to qualifying businesses. This initiative introduced by the government to help small and medium-sized businesses affected by the coronavirus crisis will give businesses the loans which won't attract any repayments, interest or fees during the first 12 months of the loan.
Our newest investment into the packaging market - Kongsberg XE cutting table for short run and prototype samples - June 2021. Give us a call if you'd like a demo of your idea!