Outdated equipment can hamper quality, kill productivity, and crush morale. So why do so many employees have to experience the frustration of gear or technology that doesn’t get the job done?
One common reason is that the people who can authorize purchases either don’t know there’s an issue with current equipment or don’t realize how bad or pressing the problem is. So, it might be up to you to help them understand.
If you need to convince a decision maker at your company that the time is right to acquire new equipment, presenting a clear and compelling business case can help.
What is a business case?
A business case is a proposal that explains the benefits, costs, and logistics of a potential business decision or purchase. When creating a business case for new equipment, your goal is to convince a decision maker that the requested equipment is worth an immediate investment.
An effective business case should lay out the proposed solution in language that the approver would understand. If you’re part of a small team, you might know the person who will receive your business case — so use that to your advantage. Try to anticipate their concerns and hesitations as well as the benefits that might get them excited about this purchase.
And remember, your business case must include an element of timeliness. You’re not just making the case for why your company should invest in this equipment, but also why it’s important to make the purchase now.
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How to structure your business case
To write a successful business case for new equipment, you must convince the reader that three things are true:
- There’s currently a problem: an inefficiency, a liability, or some other issue that needs to be addressed
- Purchasing equipment would solve the problem
- The time to solve the problem is now
If you research business cases on the internet, you can find lots of examples and templates. But remember, you’ll want to tailor your business case to your company.
If you’re part of a small business that employs a team of 10 or 15 people and know the company founder, you might not need a long, detailed written proposal. Keeping it short and sweet might prove more effective than sending a busy small business owner a long document they don’t have time to read.
But even if your business case is brief and contains only a handful of points, you still need to cover enough information to make a detailed and convincing case for an equipment purchase. That information should typically include:
- Why current equipment is outdated or otherwise insufficient to meet the company’s current or near-future needs
- Why the company should address issues with current equipment now
- A description of the proposed equipment, including make and model numbers (and quantities, if you need to purchase multiple items)
- What the equipment will do and what (if any) current equipment it would replace
- Who will be responsible for installing and maintaining equipment
- Who will use the equipment and when
- The cost of the proposed equipment, including installation costs
- How long the equipment installation will take
- The benefits the equipment will provide, such as:
- Cost savings
- Efficiency improvements
- Enhancements in the quality of products or services
- Competitive advantages
- Reduced risk of equipment failure
- Improvements in workplace safety
- Tax benefits
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How equipment financing can help your business case
It might not be enough for a decision maker to feel convinced that the company needs new equipment. Cash flow is a critical concern, especially for small and growing businesses, and big equipment purchases are a very common cause of cash flow issues. Many small businesses face a tough choice: let problems with outdated equipment get worse or face a serious cash flow crunch.
Fast and flexible commercial equipment financing can help solve this problem. But many small business owners or managers might not know about their options for equipment financing. Helping them understand the options can provide a big boost to your business case. If you can explain how the company will pay for new equipment without draining the company’s available cash, you’ve made the decision to buy equipment much easier.
Many businesses in Michigan have worked with Team Financial Group and figured out how to upgrade equipment while maintaining financial health. All you need to do is get in touch and we’ll help you figure out the equipment financing option that makes sense for your company.
Two of the financing options that have worked for many of our clients are:
- $1 buyout lease. This type of lease allows a business to make fixed monthly payments while owning the equipment throughout the life of the lease.
- FMV (fair market value) lease. This type of lease functions more like a loan in that your company doesn’t own the equipment. You may be able to get 100 percent financing with no down payment. At the end of the lease, you have the option to purchase the equipment at its current fair market value (FMV).
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Team Financial Group: Your Equipment Financing Partner
At Team Financial Group, we work with clients to find and customize financing solutions that meet their unique needs. Our commercial equipment financing options can improve your business’ cash flow and overall financial health. To get fast, flexible financing today, fill out our simple online application and let us do the rest.
The content provided here is for informational purposes only. For financial advice, please contact our commercial financing experts.