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Disadvantages of Leasing / Renting (i) No Ownership By leasing, you never actually own the equipment. It remains the property of the leasing company. This means that when the lease ends, the item is returned no matter how much you have paid for the use of it. You are also unable to gain extra money from selling the product when you look to change it. (ii) Long Term Cost If you plan to use an item for a number of years, then the cost of a lease or rental can be considerably higher than that of purchasing the item. As you do not own the item, you will need to remain paying to use it, even after you have paid enough money to cover the cost of the equipment. Although paying upfront can mean a large payment, it allows you to sell the item at any point if you wish to replace or upgrade it. Cancelling a lease contract can be very expensive, and may mean you have to use insufficient equipment until the lease ends because you cannot upgrade. (iii) Repairs Even though the equipment you lease is never actually owned by you, you are still responsible for the repairs and maintenance (including the cost) of most items. This can (depending on the item) be very expensive, especially if you are not going to be able to use or sell the item once past the lease date. (iv) Image Is your office going to be visited by customers or clients? If so, then the look and quality of your equipment and furniture is likely to be of much more importance to you. When deciding on what equipment to buy for your office, you need to be careful not to overspend on lavish but needless furniture, but also not to under-spend on cheap and poor quality equipment that will give out a bad image to your customers. Serviced Offices
A serviced office is a ready to use, fully furnished office, projecting a highly professional look without you having to actually buy all the necessary equipment. Serviced offices are good for short term office space. They are more expensive than standard offices, but are available on shorter contracts; making them useful for fast expanding businesses that may need to upgrade their space every 6 months. For long term office space, it is cheaper to buy equipment and lease an ordinary office. Also, this allows you to sell equipment when you no longer need it, recovering some of your costs. As a rough guideline, if you are looking to stay in an office for less than six months, a serviced office can help provide flexible office arrangements without upfront furniture costs. If you are looking to stay for more than six months, it is probably cheaper to buy your equipment and furniture and rent a conventional office. Visit our article on Serviced Offices for more information. Summary - Key Points to Remember Online purchasing and mail/phone order is usually the cheapest way to order supplies and equipment. However, if you wish to see the goods (particularly important with furniture) then an actual shop is the only real option. A purchasing company can provide your supplies whilst also giving you valuable advice on the amounts and types of products you need. With 'technology' equipment, make sure you know whether the product you are buying will do the right job and is not overpriced. Office furniture can be custom made, but this is very expensive and is a waste of money for most small businesses. Unless customers will be visiting your office, there is no little point in spending huge amounts of money on stylish furniture when a cheaper equivalent will work just as well. Management of your supplies and ordering is vital to ensure that the prices and the number of items are right. A purchasing company can help you manage your orders more effectively. If you give employees the power to order supplies, ensure that all orders are checked and authorised by a member of management first. This will help prevent theft or crossed-over orders. Second hand or refurbished goods can save you a lot of money, but be certain (especially with auctions) that you are not buying a heavily damaged or broken product. Leasing can allow you to use a product without needing to pay for it upfront. However, because you do not own the product you must look at the agreement carefully. In many cases it is better to pay the full amount and recoup some costs through selling the product when it is no longer needed. A serviced
office will provide you with a furnished office. However, if you plan
to remain in the same office
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If
you need to give out a professional image, but cannot afford to spend
thousands on expensive furniture, then serviced offices may provide
a suitable alternative.