Things are looking up for 2017! That's a major takeaway from Insureon's Small Business Outlook 2017 survey. We interviewed more than 1,000 small-business owners and found a whopping 82 percent plan to grow this year. Of that, 58 percent plan to outfit their office with new equipment or furniture.
Despite the rosy outlook among small-business owners, you still want to shop smart. After all, your gear is an investment in your future. These steps can help you make the most of your purchases.
1. Consider a Loan
Most businesses need stuff before they're ready to pay for it. In fact, adding or upgrading current equipment may even boost your profitability.
If that's the case for your business, cofounder of Magilla Loans (@MagillaLoans) Dean Sioukas says financing might make sense. However, he recommends finding out the lifespan of the equipment you plan to finance. That way you can look for loan terms that match.
Additionally, Sioukas says, "It may be a good idea to consider a business line of credit, which offers flexible terms and may have competitive rates."
Pro tip: Getting a loan isn't as simple as asking for it. Sioukas says small-business owners should provide lenders with a detailed business plan to show how the new equipment will increase their profitability. Lenders may also require…
- A good credit rating.
- Bank statements.
- Personal and business tax returns.
- Business registration documents.
- Proof of profitability for two out of the last three years.
- A debt service coverage ratio (DSCR) of 1.25x or higher.
2. Buy Smart
Cost is probably your primary concern when buying new office equipment. But focusing solely on price can end up costing more in the long run. For example, ignoring ergonomics in your furniture can lead to worker repetitive stress injuries and Workers' Compensation Insurance claims.
- Size. "Personalized dimensions are important when selecting ergonomic seating," she says. "A chair that is too narrow or too deep can really leave one constantly adjusting and squirming in search of a more comfortable position."
- Sit-to-stand solutions. "If outfitting a new office, consider investing in a standing desk with an electric lift that allows the user to sit or stand without much wasting time in between," she notes.
- Active seating. Allen says there are chairs now that are stationary versions of an exercises ball.
When it comes to computer shopping, you might want research state-of-the-art security. These features can be expensive, but that's nothing compared to the average cost of a data breach – $38,000, according to Internet security firm Kaspersky Labs.
"Many new systems have fingerprint identification," says Chris Carter, CEO of the cloud provider Approyo (@Approyo). "Others have retina ID, which are all great starts to add to your security tools, like MacKeeper."
His recommendation? "I'm a fan of the fingerprint reader because it cannot be copied and is easier on the end user to access."
"Small businesses can write off big purchases like computers, furniture, cameras, etc.," she says. "If the amount of the large purchase is under $2,500, the item can be expensed and the business owner won't need to worry about depreciating the asset."
Just be sure to keep your receipt on file for seven years. Northard says you might need to produce it if the IRS or your state department of revenue request it.
3. Toss Your Old Equipment
Once you have new items, it's time to get rid of the stuff you no longer need. Depending on what's getting tossed, this can be a big headache. Take office furniture, for example. It's big and heavy, so it may make sense to have someone haul it off for you. You might also check out refurbishing and recycling companies – some specialize in office furniture.
Computers may be even worse. First, most contain elements that are toxic for the environment, like fluorescent tubes and lead. But you also have to worry about the information stored on the hard drive.
"It automatically deletes the contents of any hard disk that it can detect," says Ackroyd. "Once DBAN is complete, you can reinstall Windows, and the PC can be moved on."
Of course, if you plan on being the final owner, you could just destroy the thing. Carter says your best option for that is a company that grinds computers to a fine powder.
"There are many disposal companies that go through a three-step process to dispose of computers: acid, grinding and burning," he says.
Pro tip: The Small Business Administration notes donated furniture and equipment can be deducted from your federal taxes.
About the Contributors
Brandon Ackroyd is founder and mobile phone expert at TigerMobiles.com. As well as a love for smartphones, he has a keen interest in cyber security. In an age where we create, share, and store more and more data online, Ackroyd focuses on helping customers keep their information safe while getting the most out of their device.
Crimson Allen has worked within the commercial and specialty furniture business for over 17 years. She loves to look for furniture labels when she's out and about and keeps her ear to the ground on all things furniture related. Crimson contributes content to the School Furniture Blog to enhance consumer knowledge for those making furniture decisions.
Chris Carter, the CEO of Approyo, has been in the "big data" and SAP industries for almost 25 years. He has been nationally recognized by the American SAP Users Group, SAP, Hadoop World, and more.
Amy Northard is a CPA who specializes in working with small-business owners to make taxes and bookkeeping less stressful. She has a passion for helping small-business owners wade through all the financial things it takes to start and operate a business so they can focus on their craft. In addition to preparing tax returns and bookkeeping for clients, Northard enjoys teaching small business basics through her online course Be Your Own CFO.
Dean J. Sioukas is a successful entrepreneur, tech aficionado, car enthusiast, and the cofounder of Magilla Loans. A technophile at a very young age, Sioukas has honed his web development skills over the years. He later used these skills to create Magilla in September of 2015, where he continues to grow the company by applying his technical experience and business acumen. Sioukas is the former CEO of Sioukas Investments, which is credited for developing thousands of homes and numerous commercial buildings in the greater Sacramento region.