Whether you are involved in Trial Support, Litigation Videography, Court Reporting, or running a contract Paralegal business, the sound principles forthcoming are designed to be part of a smart investment plan relating to equipment purchasing. The goal is to provide a practical approach to buying that maximizes the return on your investment and reduces the stress created by the process.

There are many reasons for new equipment purchases. Yet, all of the best reasons should be based on need and not desire. Some of the worse buying decisions have been resolved on impulse, poor research, and little to no forethought.

For many new litigation service providers, initial equipment needs are a substantial part of business startup costs. However, even seasoned business owners realize eventually they will need to upgrade and replace aging components.

All business owners should understand: one needs to spend money in order to make money. Still some do not understand how to determine the value of a purchase. Value should be defined by the expected benefit of a purchase, its ability to deliver, and the overall costs related to that component over its lifetime.

Do I need this equipment?

The first step is to ascertain whether a purchase is truly need based.  Quite often many rationales will arise.  However, in the business world all decisions should be driven by profit. Therefore, each acquisition should provide benefits toward creating a smooth consistent, profitable business.  While many purchases are relatively expensive, even low cost buys can affect your bottom line.

Why do I need this equipment?

Among the many needs for equipment purchases are industry requirements, quality assurance, increased productivity, and new service launches.  Sometimes it is the need to reduce costs that sparks buying thoughts.  One must be able to justify the reasons for a purchase before moving forward. If you can’t justify it, don’t buy it.

When do I need to make the buy?

Some equipment purchases require immediate action, while others provide room for decisions to be made down the road.  Some purchases may need to be timed with other business related events, like bringing new services on line or in conjunction with marketing objectives and plans.

What is the component’s expected lifetime?

Tour of duty for any piece of equipment is dictated by technological advancements, industry standards, market acceptance, and normal wear and tear.  Expected use durations vary widely.  Some equipment purchases are based on expected occasional use, while others are made with the idea of a one-time use.  Still other components remain in use from the moment they are pulled out of the box until wires melt, circuit boards warp, and fuses blow.

Because equipment lifetimes vary, it makes good sense that many equipment acquisitions will be at various stages within your business’s growth.

Phase buying is a cost effective way to purchase equipment.  Still there are necessary questions to answer before one can reach a benefit/cost/value conclusion. No purchase deserves an irrational decision.

Do I buy new or used?

Buying new has its benefits, i.e., warranties, technical support, and zero mileage.  Buying used has its benefits as well.  One benefit of buying used equipment is the rare or occasional need for a particular component.  Another benefit might be a low expected tour of duty.  Of course buying used generally costs less. It will be important to explore the many hidden factors that define the true cost of new or used equipment.

Have you comparison shopped?

In order to create a positive return on your investment, it will be necessary to research each model and compare it with others that are in your scope.  Multiple brands and models usually can be explored for any component in question. Many consumers buy brand specific, while other proud owners are non-discriminatory.

Many manufacturers might build one product better than they do others. One thing is for certain: all manufacturers build products for various levels of consumer need.  Most build low as well as high end products.  The materials used in construction, electronic circuitry, and functions vary widely.

Equipment also comes in a variety of quality ranges. Products usually fall into one of three general categories:  Consumer, Prosumer, or Professional.   The idea is to fill the need of individual consumer’s budgets.  Value can be found in each category.

Off-brand buying has its benefits as well.  Cost is usually the deciding factor for many.  However, some off-brand products provide surprising performance. This is true for many off-brand items because they are actually manufactured by major companies or contain the same component makeup.

Does this component provide the necessary functions?

A very critical issue is functionality.  At minimum your component choice must do what you want it to do. Some equipment purchases will be based on a one-function need. However, the best purchases are those that provide functions that satisfy multiple needs. Components with the ability to serve multiple uses will cut costs and increase productivity. Most of the time!

Is it compatible with other components in the workflow?

One factor that should be considered is the component’s ability to integrate and compliment equipment currently in use. Your new component should be flexible enough to work in conjunction with equipment in the field and in the office, or studio. Also, how your prospective equipment fits into your workflow is very important.

Is now the time to Upgrade?

As technology advances so does that need to replace outdated equipment. Usually the process repeats itself every 2-3 years therefore technology definitely creates the need to upgrade. This is especially true with hardware that requires software. Here time intervals between required upgrades falls sharply.

The ability to understand cycles in product development helps to keep ahead of the curve. Knowing what tomorrow will bring aids in transitional buying. Transitional buying is helpful when phasing out one service or product while phasing another service or product in.

What don’t I know about this equipment?

Information on a particular product can be gathered from a multiple number of sources. Manufacturers and distributors of products usually provide detailed information about equipment available. Imbedded within carefully crafted sales pitches are creative descriptive words with your dollar in mind.

The real beneficial information usually comes under the headings of “Features and Specifications”.  Combined with described functionality, the consumer should be assured the component indeed performs the task as defined.  This is not always true; even top-of-the-line, brand-named components falter.

Reviews on components can be found on the Internet.  However, one should consider the biases of the author carefully. Conversely, there are individuals with clout and knowledge in every industry who offer non-biased reviews of equipment with real substance to sink your teeth into.  Many times you will need to discriminate.

Over the years, I have come to learn the best information about products comes from the end user. Users groups blanket the Internet.  What better source than those in your industry with individual equipment experiences to glean from?  Careful though! It goes without saying, opinions are like snowflakes; there’s always a one of a different shape following closely behind.

Can I demo this piece of equipment?

What if you could be the end user before you become the purchaser?  Trial periods, demo-downloads, and active demonstrations are available on many products today.  Perhaps one way to “try it before you buy it” would be to rent the component before shelling out the big bucks.  Often there are situations where simply borrowing equipment is the best decision one could make.

Do I have the knowledge and skill to use this equipment?

One must also consider the skill of the end user.  Should a particular knowledge base be un-established, what will be the learning curve and expenses necessary to properly train one to use the component? Part of getting the most “bang for the buck” is having the skill set to take advantage of the beneficial functions of the purchase.

As you continue your research there are many other things to consider.  Below is a list of things in which you should dedicate some time to think about.

• Industry Requirements: Some industry standards that may affect purchasing decisions may include media formats, expected turnaround of the provided service, user component compatibility, and quality. Are there legal requirements and hoops in which you must meet?
• Dependability and Reliability: It’s not enough to perform a task. The task must be preformed accurately and produce the same results time and time again.  Consistency in products and services is the key to a satisfied end user.
• Required Add-ons: Often there are hidden costs from special cabling, power supplies, and system requirements that cause one to spend more than initially expected.
• Portability: While not all pieces of equipment must be transported, some components by the nature of the duty to be performed will require movement from location to location. Therefore weight and size of the component can be a factor that will guide your decision. What will be required to transport your equipment?In addition to transportation needs, safety and security are also issues to consider.  Is it fragile and delicate or “built like a tank”? It is not unusual to find needs like packing, storage cases, and transportation tools costing more than the component itself.
• Construction Materials: In general the greater weight the higher quality of construction.  While this not always true, the reverse usually is.  If it feels cheap it probably is. There is nothing like having the piece of equipment in hand so that you can personally inspect it.    Sometimes the reduction in weight is the feature you desire the most.  This is precisely why proper research must be conducted. Size and shape also play roles in many component-buying decisions.  If all you have is a truck, and the truck is not big enough, there is more research to do. Catalog images only tell half the story. Unfortunately today’s Internet buying habits have eliminated the storefront. It helps to be able to see and feel what you are purchasing. Whenever possible I recommend you “reality-shop”.
• Technical Support: After the sell tech support is a big consideration for many business owners today.  Because it is such a consideration, manufactures and resellers often charge for support.  The availability of technical support should not cause further frustration.  Ironically, it usually does.  On the other hand, some equipment buyers by virtue of limited knowledge will do themselves right by purchasing additional tech support.

Maintenance and Repair Costs: Some maintenance and repair issues can be resolved in house.  Others will cost you dearly in time and money.  Nothing is worse than paying for a piece of equipment that spends more time in their shop than in your shop.  Add in shipping, replacement parts, bench fees, and tech time and simple equipment adjustments will cost you your sanity.

In addition to the costs of repair, one must factor in the availability of repair services. Can it be done locally, or will you spend more time searching for someone to fix it than you did researching the initial purchase?

Insurance: Expensive pieces of equipment deserve insurance.  Imagine a costly piece of equipment responsible for performing 50 percent of the duties in your office going down. Now imagine a low cost yet necessary piece of equipment in the workflow gone on the blitz.

Don’t you wish you had two of those? Sometimes insurance doesn’t mean a paper policy.  Doesn’t redundancy provide the same piece of mind?

We had to discuss the fore-mentioned before we could discuss the overall cost.  In order to decide whether the money to be spent will be “a penny wise or a pound foolish” it will be necessary to define its worth and apply it to value principles.

What is its earning capacity?

Also, in the overall equation is the income the equipment is expected to generate throughout its lifetime.  While some items may only be used one or two times, those calls for duty may very well provide substantial “fundage”.

Those purchases usually do not make one feel foolish by allowing them to sit shelved for that occasional high profit job. On the other hand an expensive product that requires multiple uses before a return on investment is realized can strap the business owner for cash.  Perhaps additional income could be derived from rental fees when not in use.  If you haven’t considered earning capacity in the decision process, you better get started.

How often will this piece of equipment be in use?

In order to get value from any component it must be used.  Some components are so valuable their owners are able to consider additional profit-making services, which were never intended with that component.  By virtue of functionality, wise equipment purchases will have repeated use with low operating expenses, and provide income without jeopardizing user time or effort.

Where will you purchase your new equipment?

Just like models and manufactures vary in quality, so do retailers, distributors, and resellers. Some merchants will bend over backwards for your business.  Others become order takers.

Service is part of the overall value, and we are not talking technical service.  Those that want your business understand the value of service before, during, and after the sale.  They will provide quality information during the initial buying process, and assure each customer he or she has received the necessary feedback on questions.

A good retailer should have knowledgeable staff which can provide confidence through guidance.  They should make you aware of any additional components that compliment your new equipment, yet never mislead for the sake of a buck. Great retailers understand the products they sell.

How much should you pay for the component?

Business in general is about negotiation, and agreement.  Retailers understand that and so should you.  You should never neglect to negotiate the price of anything.  It is not unusual to get a price break just for asking.  Often retailers have specials that they either forget to mention or do not know about. Ask!  Sometimes the savings are substantial.

Some retailers will provide discounts for multiple purchases or repeat business.    Sometimes even multiple buys of the same item will foster deep discounts. You should also ask about equipment packages.  Often, when you package items that include accessories you can get continued rate reductions. Inquire about all cost saving potentials.

How will I pay for this equipment?

One should consider alternative forms of acquisition other than the usual cash for product exchange.   Trading a trusted colleague for mutually desirable (oops!), “needed” components is a great way to get rid of unwanted equipment while obtaining something of a higher value. Here’s where “one’s trash is another’s treasure” certainly rings true. The barter system has worked well for centuries.  Have you ever thought about trading services for equipment?

Another alternative to right out buying of an item is creating a co-purchase among two or more individuals that only need the equipment on occasional basis.  The item now becomes a shared expenditure with increased value for everyone.

What is the expected resell value of the component?

Some purchases can be made with resell in mind.  One could buy an item for a one-time use allowing for large profits while turning around and selling the item in a very gently used condition.  This method can help to recoup some cost.  Once again the value principals explained above apply however, this time a new buyer must consider them.

Credit buying and its related costs are also factors in the value equation. Great budgets will allow for business expenditures like equipment.  Sometimes planning is all that stands in the way of a cash verses a credit purchase.  Certainly, time buying has its advantages. However, credit terms and durations should never run longer than your equipment’s lifespan.

When using cash to buy equipment consider this, “Cash flows less like a river and more like the oceans”. Sometimes cashing in means not cashing out.

Buying equipment, new or used either creates euphoria or despair.  Research and forethought are the keys to success.  I suppose throughout the whole buying experience one might consider the process intriguing.  Sometimes the purpose of you exploring a potential purchase is only meant to answer the question, “Do you need it after all”?