There is a profound concern in the practice of medical services that is elicited by the shrinking profit margins. This is particularly due to the high cost of investment, especially in acquiring the rather sophisticated tools and machines used. There are two most common ways of acquiring such facilities; buying and renting medical equipment. Deciding between the two methods depends, to a great extent, on your calculation, availability of cash and the level of cash flow. However, this article takes you through some important considerations in this endeavor.
To begin with, it is worth considering the rental period. Before ordering the equipment, consider the rental period. As a general rule, an equipment that will be in use for a long time is better bought than rented. However, where the device is needed for a short period of time, it is more convenient and economical to rent. The time value of money falls into play when evaluating between a buy and rent options.
The upfront costs and the monthly remittances are worth comparing. The financial standing of the business is thus relevant while making the analysis. Small businesses that have low cash outlay are well served with rental agreements. On the other hand, well established firms having financial muscles are better equipped to buy the equipment. It is a trade off between having to part with a large sum of money at once, or rather make monthly payments that are affordable.
The cost of maintaining the equipment also falls into play. For most rental agreements, the responsibility of repairing and maintaining the device remains with the rental company. For such deals, you are relieved of the burden of having to repair and maintain the same. However, for purchase decisions, you are solely responsible for the maintenance. This task can be very expensive and demanding. As such, always analyze the cost of servicing and repairing the machine and opt to rent it where the expenditure is not justifiable.
The other vital factor of concern is the frequency of use. While some medical tools are used on more often, others are required on rare occasions. In case you require specific gadget frequently, it is recommended to invest in it. This is particularly due to the fact that such machines will soon pay themselves off, making the investment valuable. Those that are used on rare occasions are better rented.
When comparing the sale and buy decisions, ensure also to consider the resale value. After use, or when upgrading the equipment, the current one may be disposed of. The amount realized is used in acquiring the new machine. As such, it is vital to have a reasonable scrap value for the gadget. This will help in obtaining the new implement fast enough. Also, devices with low resale value may prove hard to sell.
Nevertheless, be sure to opt for nothing less than convenience. Both methods have different implications to different practitioners. While renting is fast and friendly to the flow of cash, buying brings with it a sense of freedom and peace of mind. With rental agreement, you can access advanced equipment that may not be possible to buy.
Simply put, a carefully analyzed and reached at decision is health as far as financial position and health of the business is concerned. Check out the above factors when making the decision.
To begin with, it is worth considering the rental period. Before ordering the equipment, consider the rental period. As a general rule, an equipment that will be in use for a long time is better bought than rented. However, where the device is needed for a short period of time, it is more convenient and economical to rent. The time value of money falls into play when evaluating between a buy and rent options.
The upfront costs and the monthly remittances are worth comparing. The financial standing of the business is thus relevant while making the analysis. Small businesses that have low cash outlay are well served with rental agreements. On the other hand, well established firms having financial muscles are better equipped to buy the equipment. It is a trade off between having to part with a large sum of money at once, or rather make monthly payments that are affordable.
The cost of maintaining the equipment also falls into play. For most rental agreements, the responsibility of repairing and maintaining the device remains with the rental company. For such deals, you are relieved of the burden of having to repair and maintain the same. However, for purchase decisions, you are solely responsible for the maintenance. This task can be very expensive and demanding. As such, always analyze the cost of servicing and repairing the machine and opt to rent it where the expenditure is not justifiable.
The other vital factor of concern is the frequency of use. While some medical tools are used on more often, others are required on rare occasions. In case you require specific gadget frequently, it is recommended to invest in it. This is particularly due to the fact that such machines will soon pay themselves off, making the investment valuable. Those that are used on rare occasions are better rented.
When comparing the sale and buy decisions, ensure also to consider the resale value. After use, or when upgrading the equipment, the current one may be disposed of. The amount realized is used in acquiring the new machine. As such, it is vital to have a reasonable scrap value for the gadget. This will help in obtaining the new implement fast enough. Also, devices with low resale value may prove hard to sell.
Nevertheless, be sure to opt for nothing less than convenience. Both methods have different implications to different practitioners. While renting is fast and friendly to the flow of cash, buying brings with it a sense of freedom and peace of mind. With rental agreement, you can access advanced equipment that may not be possible to buy.
Simply put, a carefully analyzed and reached at decision is health as far as financial position and health of the business is concerned. Check out the above factors when making the decision.
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