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Better Business Decisions – Better to Pay Outright or Borrow for Stock/Equipment?

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Better Business Decisions

Better Business Decisions

Last night at a local Meet-Up ( www.meetup.com ) of South East Small Business, Business Development and Referral Networking, we had an interesting discussion about mistakes in business. For example: Whether to pay outright or borrow for stock/equipment?

The example one business gave, was paying outright for equipment that would be sign-written to advertise another business (he organised advertising for businesses). The issue was that spending $10,000 on the equipment took all the spare money the business owner had, while the payment for the advert was monthly over a multi-year contract.

Hindsight showed that it would have been better to get a loan for the equipment, then add his mark-up for the advert and service on top of the monthly re-payments, and he would still have his $10,000 to use for cashflow and marketing.

Have you had a similar experience?

What Better Business Decisions can you share?

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Author: accountkeepingplus

Administration, bookkeeping and compliance for small business, and Self-Managed Super Funds (SMSF) Training, trouble-shooting, or we can do the books and payroll for you! Self Managed Superannuation Fund Service Provider, Free support MYOB Certified Consultant, Reckon/QuickBooks Professional Partner.

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