Sometimes avoiding a heavy initial cost outlay for a machine and opting for an alternative such as rental can be a great way to test out the product before you take the plunge to buy it. Rental allows you to take the time to learn how to use your washing machine, test it and ensure that it is right for your business and staff before making a bigger commitment by purchasing outright.
Rental can also be helpful in keeping costs down initially and keeping them steady, as you will have an agreed contract price that you will be paying regularly. If keeping your business cashflow in check is something you are mindful of, washing machine rental rather than out outright purchase could be the answer.
In this article, we take a deep dive into the ways in which washing machine rental can be advantageous for your business, covering some advantages that may already be on your radar and others that might not have been so obvious.
When you take out a washing machine rental contract, there is no up-front cost for installation. You just pay the same hire fee every month. Installation comes as standard with any commercial washing machine rental contract, with no further cost incurred to the customer. With the purchase of a machine, you will generally be expected to pay a fee for a skilled team to come and install the machine or machines on your premises. With rental you could avoid this cost entirely, or at least the true cost of installation will be absorbed into the contract rental price, spread across many months as painlessly as possible.
Free servicing and maintenance
A washing machine rental agreement gives you the security and peace of mind of all servicing and maintenance costs being met by your contract provider, covered under your fixed monthly hire cost.
This again favours predictable business cash flow by avoiding unexpected shocks that incur sudden hefty bills for repairs and replacement of failed components.
It offers the critically important advantage of minimising operational downtime, since with a hire contract agreement, you can usually rely on the fact that any repairs you require will be carried out as a matter of urgency, in a timely and efficient manner. This in turn will speed up the restoration of full service, meaning that the time your business laundry operations are out of action is significantly less than it would have been if you owned the machines.
It is also of significant benefit in terms of time management, as it means that if there is ever a fault with your machine, you will not have to spend time researching a suitably qualified company to come out and fix it or chasing up a temporary external laundry service provider to cover your needs while you wait. Some laundry machine maintenance providers may
have a long lead time for servicing out of contract, as they will tend to prioritise their contract customers to keep them happy, and they may not be able to fit you in within a reasonable time period, or might do so only if you pay an inflated emergency service charge.
No initial purchase cost
A great advantage of a service commercial washing machine hire agreement is that there is no purchase cost either when you buy your first machine or when it comes to needing a replacement.
When purchasing outright, not only do you have to pay a large amount to cover the cost of the machine, but you will also have to pay a large lump sum again in the future (be it years or decades ahead) when it comes to needing a replacement machine after your machine fails and replacement components are no longer readily available. With rental, you simply pay your monthly fee, and can avoid any sudden increase in costs due to initial purchase or replacement.
No repair or replacement costs
With your serviced washing machine hire agreement, if ever the machine breaks down, your service provider will cover the cost of repairs and, if necessary, that of the outright replacement of the machine with a new one, saving you huge sudden, unexpected costs. This helps to keep your ongoing costs predictable and manageable as compared with those you would incur in the same situation if you owned the machine outright, which could at the very least amount to a large bill for replacement parts and labour.
When you don’t own the commercial washing machines you use, your bookkeeping and year-end accounting will be simplified by the fact that there is no need to calculate depreciation on this class of owned assets when working out your profit and loss accounts. This simplifies the accounting process, leaving you with a little more time to focus on other areas of the business that may need your attention at that time of year.
Commercial washing machine hire is an expense you can deduct from your pre-tax business income on an ongoing basis, as it’s a fixed business cost. As opposed to the potentially complicated process of working out the depreciation in value of your assets in order to complete your accounts, when you are paying a regular, fixed amount each month or quarter, it is easy to assess what expenses you can expect to deduct each year.
To conclude, the decision as to whether to take out a rental contract agreement or to purchase a commercial washing machine or machines will be business-dependent, but most businesses with a need for only moderate numbers of commercial laundry machines are likely to find the rental model more convenient. There are many advantages to washing machine rental in terms of smooth and simple business management. Certainly, if you are a new business or one expanding into the use of commercial machines, rental might be a good place to start.
If you are a larger company with more experience in the sector, such as a chain of hotels, commercial laundries or launderettes, and you have enough capital to purchase your machines outright, and enough cash flow to employ your own dedicated in-house service team, then perhaps the typical average lower total cost of ownership resulting from outright purchase of all machines will be compelling enough for you to forgo the advantages to smaller and medium-sized businesses of rental.
Whatever option you decide is best for your business, at Brewer & Bunney, we are happy to be on hand and offer guidance with any queries you may have. Please don’t hesitate to get in touch with one of our knowledgeable customer service representatives today.