Cleaning 03 large

25. Rent to buy

Try before you buy

Have you ever gone out and made one of those big purchases – the sort that you plan for ages and really look forward to – only to get your new toy home and find that, really, it's a bit of a disappointment? Go on, be honest with yourself. We've all been there.

Often, there's little you could have done to avoid such a situation. Such disappointments are often not due to a lack of pre-purchase research and product comparison, but only make themselves felt once you start actually using the product.

Take a test drive

Most of us are familiar with addressing this problem when buying cars. Few of us, after all, would buy a car without first taking it on a test drive. Of course, before doing that you'd decide on the make, model and features you're after, and check out the cost. You might have to drop this feature or that in order to keep the cost within your means – you might even have to change to a different model – but you wouldn't place an order until you'd test driven the car you'd settled on. You'd want to know what it's actually like to drive. After all, that's what it's for. Driving.

Having made your decision, you might decide not to buy the new car outright, but to pay for it over a period of time, maybe three or four years. For business use, you might decide not to buy it at all, but to lease it. These approaches, while usually more expensive than outright purchase in the long term, offer great benefits in both cash flow and flexibility terms.

Rent it!

Network equipment can be acquired in similar ways: outright purchase, staged payments or by renting it.

Renting can offer significant benefits – it can be a highly convenient, flexible and economical way of acquiring the kit you need. Even if you decide to purchase the equipment outright or via staged payments, it can be most useful to rent it first in order to perform longer-term in-situ testing. Such testing can give you a much higher degree of confidence that the new equipment will do what you need it to do when installed in your network, in turn increasing the chances of a successful purchase, and keeping everyone happy – including your finance department and boss!

Renting means savings

The principal goal of this series of networking tips is to help you save money – to control capital expenditure. That goal is even more important now than it was a couple of years ago when we started this series. With the economic climate as it is, capital budgets are under much increased pressure.

Renting removes the need for major capital expenditure on network kit. Instead, it is funded via a series of regular rental payments. These are typically orders of magnitude smaller than the outright purchase would have been.

Tax savings

Perhaps the biggest financial benefit of renting is in the the tax savings it realises. Outright purchases must be accounted for through capital allowances, while rental fees can be charged directly against revenues for corporation tax purposes. Significant savings in tax can be achieved, as well as removing the need for major capital expenditure.

There is another, less immediately obvious, way in which renting can save you money, though – less obvious because it has to do with the end of the device's useful life on your network. Obsolete products are typically more difficult to dispose of. If you need to source a product which is near, at or beyond its end-of-life, then consider either purchasing it refurbished, or renting it. By renting, you can remove the risk of finding yourself at a later date left with an obsolete product that you can't resell.

At Go Communications many of our customers are regularly mixing outright purchasing with renting to help them address the new financial constraints that they must work within the current economic climate.

Minimise your exposure to financial and other risks. Take your new network kit for an extended test drive by renting rather than purchasing outright. If it doesn't work out, you'll have minimised or completely avoided any egg-on-face. And if it does do what you hoped, then you'll find yourself everyone's new best friend – your customers, your boss and perhaps even the bank manager!

A very happy Christmas and a thoroughly successful New Year to you all.