Purchasing machine and equipment are the most common things in the manufacturing business. Even a home-based business requires different small machines and handtools. However, taking a right decision of purchasing machine and equipment are not the easy tasks for new entrepreneurs. Because here you are investing your hard-earned capital into fixed assets.
In addition, retail businesses also demand machine operations. It includes weighing scale, bill printing machine etc. However, purchasing machine is the most crucial aspect of the manufacturing business. After you buy and install the machinery, it is really tough to change them frequently.
Even you go for a change, it comes with huge financial loss. Therefore, you must be careful at the time of purchasing machine for your manufacturing business. The object of crafting this article is to provide important considerations to be made in purchasing the machinery to the entrepreneurs.
- 1 10 Things To Consider In Purchasing Machine & Equipment
10 Things To Consider In Purchasing Machine & Equipment
#1. New or Used
When you are starting the business with less budget, you may consider purchasing a used machine. Definitely, a used machine costs much lower than a same quality new machine. Therefore, it reduces the startup capital investment in new business.
However, you must be doubly careful in purchasing a used machine. CHeck, whether the machine supplier provides warranty or not. Check it carefully. In addition, check the company reputation in the machinery market.
#2. Production Output
This is one of the major criteria in purchasing machine for your small business. In addition, you will need to compare the production output with required utilities and price. Definitely, the perfect machine comes with maximum production output with minimum utility requirements in a reasonable price. And in the time of searching for the right machine, you will need to compare all these things with the production output.
#3. Price Comparison
This is an another important factors in selecting the right machine. When you get the different prices for the same machine, find out the reason behind it. Check every feature of the machine. However, never compromise with quality over price. While price is important in deciding what to purchase, the greater focus should be on quality and value.
#4. Manpower Engagement
Identify the manpower engagement. Because you will need to pay for every man-hour that involves in operating the machine. The long-term success of the business hugely depends on the several cost factors. And you have to identify how much you are paying for per unit production.
Here we put an example of agarbatti making machine. Generally, there are two different types of machines. These are semi-automatic and fully-automatic. A semi-automatic machine demands a dedicated manpower for the operation. On the other hand, a single individual can operate at least 5 numbers of the fully-automatic machine at a time. And in that case, you get more production output with minimum manpower utilization.
#5. Space Requirement
You must know how much space the machine takes in installation and operation. Generally, after the installation, you will need to provide some extra space for the operational activity. So it is important to know the exact space requirement before putting the final order. In addition, check whether you can provide the required space or not.
6. Power Requirement & Consumption
This is an another important consideration in the purchasing machine for your manufacturing business. If the machine requires a domestic phase to operate than it is good. Otherwise, you will need to arrange the commercial electricity from the Electricity Board. And definitely, it is time-consuming. In addition, it demands investment.
Furthermore, check the consumption rate of the machine. Check it for 8 hours operation. Because you will need to calculate the cost of energy involves in the production.
#7. Warranty Period
Check the warranty period before placing the final order. In addition, check it in detail. What are the parts that come with the warranty and what don’t? In addition, check the service fees structure after the warranty period. Because you will need to pay the machine company for the every service issues in future.
#8. Installation & Training
Check whether there is any installation charge. Generally, maximum companies provide the installation service free of cost. However, some of the companies take charges for installation. Check it out.
In addition, ask them to provide an on-site training to your employees. Even the company asks for fees for it this is worth giving.
After you finalize the machine and machinery supplier for buying the machine, check the company’s customer feedback. Large companies always provide client feedbacks on demand basis. And you can check what other clients say about that machine company.
What You Can Outsource
Last but not least. Before planning to buy the machine, check what you can or should outsource. Simply, identify what makes sense to outsource for financial reasons and space limitations. Also, you have to calculate the financial aspects carefully.
Here we put an example of an agarbatti business where bamboo sticks are the major raw materials. You can simply buy the bamboo sticks from other company or you can produce the sticks at your unit. And for a small unit, we always advise getting the bamboo sticks from the other manufacturers. On the other hand, for a large scale agarbatti unit, outsourcing the stick is not the financially prudent decision.
Starting a manufacturing business is a self-rewarding career for every entrepreneur. However, to achieve the long-term success in the business, you must take the every step carefully. And we hope, this 10 important considerations in purchasing machine with help you in buying the right machine for your small business.
Editorial Staff at NextWhatBusiness is a team of Business Consultants having years of experience in small and medium scale businesses.