How to Scale Your Business With Less Capital to Invest

Even with less investment capital, you can still scale your business by leasing your construction equipment

Construction remains a lucrative industry in the US, with an average expenditure of $1,231 billion per annum. Furthermore, favorable macroeconomic conditions such as relatively low interest rates continue to play a key role in bolstering the demand for construction services.

If you are a contractor seeking to get the most out of this industry, you need to scale your business operations to meet the increasing demand. Unfortunately, you might not have all the capital to expand and own the equipment outright. This post explains how you can scale your business with less capital to invest.

Don’t Buy: Lease Construction Equipment

The major challenge facing established small businesses is inadequate capital to help them scale their operations, particularly due to the high cost of construction equipment. But that should not hold you back in your quest to benefit from the emerging opportunities.

A popular solution among small business owners is to lease construction equipment. This allows you to cut costs and operate a more financially stable business. Therefore, even with less capital, you can grow your business into other regions or services.

Below are the benefits of leasing construction equipment for your business:

  • You Won’t Incur the Initial Purchase Cost as you Scale your Business

Buying new construction equipment requires large capital and can have a huge impact on your budget. Besides, such a move ties you down to a specific equipment item in the long term. But when you lease equipment, you avoid the upfront costs that arise with purchasing and allow more efficient allocation of financial resources.

  • You Reduce Maintenance and Repair Costs

Once you purchase equipment, you have to consider the repair and maintenance costs. Although rental equipment also requires maintenance and repair, the cost is significantly lower, unlike purchased equipment. Besides, the labor and time costs for maintenance and repair of rented equipment are more manageable and lower.

  • Avoid Depreciation Costs

When you buy machinery, its value depreciates with time, meaning you incur substantial depreciation costs. If you want to resell the equipment, chances are you will not recover your initial investment cost, especially when you factor in maintenance costs incurred. Equipment rentals help you to avoid the losses resulting from depreciation.

  • Avoid High Costs of Equipment Storage Space

When you own equipment, you must dedicate a space for storage when not in use. Failure to store the equipment properly or exposure to harsh conditions increases the depreciation rate. A warehouse or storage space means an additional cost for your business. However, when leasing the equipment, you can negotiate with the leasing company about the lease period and eliminate the need to construct a long-term storage structure.

  • Scale Your Business while Safe from Market Fluctuation

Construction is a dynamic industry with many factors influencing the market. You don’t have control over the rise or drop in the number of jobs available or the cost of equipment. Equipment rentals cushion your business from any unprecedented financial downturns that may emerge. Leasing is a flexible option that allows you to handle the rise and drop of market forces.

  • You can lease Project-Specific Equipment

If your business needs to balance numerous projects at once, you don’t have to incur the logistical costs of moving equipment from sharing them among different projects. Renting equipment allows you to provide every project site with its appropriate resource and eliminates logistical delays to ensure you efficiently complete the project.

We Can Help

Equipment rental is a viable option ensuring that you don’t miss out on the prime opportunities to expand your business into other regions or services. At Vandalia Rental, we offer construction equipment you need to scale your business without investing large capital. Contact us today to discuss your equipment needs and learn how equipment leasing can help your project plans.