Contractors who want to expand their companies’ offerings often require new tools and equipment. Unfortunately, the construction equipment buying process isn’t as simple and straightforward as one might think.
Purchasing heavy equipment requires a serious investment, so contractors need to take their time and find the right machines for the jobs they intend to perform. This article will detail some things contractors need to know to find the right machines to meet their needs.
Defining Goals
There are many types of construction equipment, and some have multiple uses. Instead of starting out by looking into the many high-quality machines offered at Columbus Equipment, then figuring out how to incorporate them into daily tasks, it’s better to begin the process with a definite set of business goals.
Contractors have a lot of options when it comes to expanding their service lineups. Some choose to offer excavation services and other land works for new construction, while others prefer to begin taking on large commercial jobs. The choice of which direction to go with the company will heavily influence what type of equipment contractors need, so think about the current crew’s skill set, prior experience, and interests and decide which type of services to add to the company’s lineup before purchasing any machines.
Budgeting for New Construction Equipment
In most cases, contractors purchasing their first pieces of heavy equipment can’t afford to pay cash. Instead, they take out business loans. It’s usually fairly easy to find a lender, but that doesn’t mean contractors will be able to get a loan large enough to cover multiple pieces of new equipment.
Finding out how much equity is in the business and prequalifying for a loan are good ways to gauge what the company’s heavy equipment budget should be. After prequalifying with one or more lenders, contractors can use a business loan calculator to determine how much they’ll have to pay each month.
When setting a budget for heavy equipment purchases, remember that it takes some time to start attracting new clients. At first, contractors may need to continue to get by and pay off their loans by taking on the same types of smaller projects they are used to, so be careful about repayment terms. One way to help you manage, plan, and efficiently forecast your budget is by having construction enterprise resource planning in place to provide a central platform to store and analyze your business data and processes. By managing your finances, resources, and operations, you can make informed decisions and makes budgeting more accurate and efficient.
Purchasing Options
Once contractors know what type of services they will be adding to the current lineup and what kind of budget the company will have to pay for the equipment necessary to perform them, they can start investigating purchasing options. This is the fun part since it involves checking out lots of different machines and learning the ins and outs of each of them.
Start by deciding whether it makes more sense to buy new or used equipment. In most cases, heavy equipment depreciates quickly. That can be a problem for contractors who choose to buy new machines, but it’s good news for those who are willing to take a small risk on used equipment.
Whether contractors choose to purchase new machines or used equipment that still has some life left in it, they should always work with reputable, reliable dealers. No matter how fantastic a private deal sounds, unless contractors moonlight as heavy equipment mechanics, there’s no way to guarantee the machines are in good shape. Most dealers, on the other hand, have used equipment inspected prior to offering it for sale.
What to Look for in Used Heavy Equipment
Whether contractors buy new or used, it’s obvious that the top priority should be whether a piece of heavy equipment will get the job done. Beyond that, though, it’s also important to learn about each individual machine. Contractors should consider factors such as:
- Operating hours
Construction Equipment history
Signs of wear and tear
As a general rule, a piece of heavy equipment with more operating hours will have more signs of wear and tear. While that’s to be expected, it’s relevant to note here that the kind of shape the machine appears to be in can be an indication of what kind of mechanical maintenance it has received over the years. Contractors who take the time to make sure their equipment looks its best and is free from rust and other signs of neglect are more likely to take it in for service every year than those who leave machines out in the rain and otherwise fail to provide proper care.
When it comes to equipment history, there are two things contractors should check. The first is whether there are any liens against the equipment, and the second is the machine’s current owner. Construction equipment theft is surprisingly common, and ignorance of a machine’s status as stolen goods is not a defense against purchasing it, so write down the serial number or the PIN and contact either the local police department or a relevant service provider to be sure.
Equipment Delivery
Unless they are buying from private parties, contractors don’t have to worry about how to get their new machines to where they have to go. Professional heavy equipment dealers have the heavy-duty trucks and trailers required to transport even the largest pieces of equipment safely.
Keep in mind that buying an item online from other cities or states can leave contractors with hefty delivery bills. It’s better to work with a local dealer. That way, contractors can view the machines they want to purchase in person, then arrange for affordable shipping when they find the right options.
Get the Search Started – Construction Equipment
It can take time to find the right piece of heavy equipment, especially for contractors who are just starting to offer excavation, demolition, or other services that go beyond the basics. Be sure to allocate plenty of time to the search. Rushing the equipment-buying process can leave contractors with the wrong machines, creating some serious headaches and potentially devastating the company’s finances.
When in doubt about whether a piece of equipment will be a good fit for a particular type of job, reach out to a dealer. Local heavy equipment dealers know the ins and outs of the industry and can offer professional opinions.