Edit ModuleShow Tags

How to know when to upgrade your IT systems


Published:

Are you feeling inclined to make some much-needed improvements to your current technology and equipment?  Are you in a position to accommodate new growth or additions to your workforce with the proper systems in place? Well, you’re not alone.

More than four out of five executives said their companies made at least one capital goods purchase of significant cost within the last year, according to a recent survey of small to middle-market business owners by Forbes Insights and CIT.   And the same number said they will make an additional acquisition within the next six to 18 months.  More than one-third reported that the business need was “too strong” to delay the equipment purchase.

A Wall Street Journal article touts the same message. “Storm clouds may be gathering over the U.S. economy, but businesses are still leasing and financing equipment, everything from tractors to computers.” 

The International Data Corporation (IDC), a market research and analysis firm specializing in information technology, telecommunications and consumer technology predicts that the market for leasing and financing IT equipment is projected to reach $67.3 billion, up from $64.7 billion last year. By 2015, the market is expected to reach $77.4 billion.

Certainly, there are a wide range of factors that impact the decision-making process for new equipment from the impact on cash flow and the cost of available capital to equipment becoming out-of-date or obsolete.  Other factors to consider include tax implications, depreciation and maintenance. 

The following is a brief checklist to help you determine if it’s time to upgrade:

• Are you running on a system that is not reliable or compliant?
• Does your current system adequately support your sales efforts?
• Does your system support the necessary software to run your business efficiently and securely?
• Does your equipment support the current number or ratio of employees?
• Is customer demand impacting your current operating ability?
• Do you have a platform that gives you the flexibility to grow as you need to?

Companies who have cash on hand may choose to purchase the necessary equipment outright to address some or all of the issues above.  Others are choosing to preserve capital by looking into readily-available financing options.  Those who do not want to part with their cash reserves, overleverage themselves or add to the balance sheet should consider the various types of commercial financing and important qualities associated with choosing a partner.

• What kind of financing options can this partner provide?
• Do they finance the types of equipment I need?
• What is the application process like?
• Do I have the ability to customize a payment schedule?
• Do they provide additional services such as electronic invoicing and bundling?
• Are there any up-front costs?

"We are definitely seeing more activity by business owners in terms of technology upgrades in the current market," says Eric Nastri, CEO, Verticomm Technologies.  "While business owner are still showing signs of being cautious, many are evaluating the next steps in terms of technology platforms and improvements to enhance their operations and manage growth."

Whether you choose to purchase or lease equipment, it pays to investigate your opportunities, review your balance sheet and talk with experts in the industry versus delaying growth opportunities that may be awaiting.  If you do, you may find yourself leading the pack -- leaving the current uncertainty behind and focusing on the business opportunities that lie ahead. 

Edit Module
Brad Bayless

Brad Bayless is Vice President of Dynamic Funding, Inc.  He has more than 20 years of experience in the commercial finance industry and is a former small business owner.  Contact Brad at 303.754.2007 or bayless@dynamicfundinginc.com.

Get more of our current issue | Subscribe to the magazine | Get our Free e-newsletter

Edit ModuleShow Tags

Archive »Related Articles

What will your company look like in 2025?

I’ll be 60 in 2025. That’s a good marker for many of the early stage companies I’m involved in. “You’ll be the real deal when I’m 60” is a powerful way for me to frame the time commitment it takes to create something substantial out of nothing.

How Oakman Aerospace boosts Colorado's industry standing

Veteran-owned Oakman Aerospace contributes to Colorado’s impressive standing in the industry, providing cutting-edge products and services involved in space systems architectures, spacecraft and satellite design.

To patent or not to patent: That is the question

With a patent protecting your innovative product or service, you have a better chance at capitalizing on your invention. Without a patent, there is nothing stopping well-heeled investors or competitors from moving in.
Edit ModuleShow Tags

Thanks for contributing to our community-- please keep your comments in good taste and appropriate for our business professional readers.

Add your comment: