One of the biggest expenses when you first open your new franchise will be equipment. Depending on what kind of franchise you’re opening, these costs will vary. For example, if you plan to open a restaurant franchise, you could spend upwards of $100,000 on equipment alone. With a fitness franchise, you can end up spending $50,000 to outfit your gym franchise business.
Suffice it to say, franchise equipment doesn’t come cheap. But there are a few ways you can save money and still get what you need.
1. Shop Used
Most of the time, you don’t need new equipment. While you need an industrial-grade refrigerator for your restaurant or top-of-the-line treadmill for your gym, there’s no reason they have to be 100% new.
There are a few places you can find used equipment. Craigslist is the obvious choice, as often franchises and businesses who are going out of business or who are replacing older equipment will post their used items here. And don’t overlook eBay, especially for equipment you can feasibly drive to pick up.
Search for auctions in your city, as many going-out-of-business companies will enlist the help of an auction company who can easily sell all equipment, fixtures, and tools at once. It’s a great opportunity to get quality equipment at a fraction of the price.
2. Check the State of the Equipment
It’s great to save money on used equipment, but not if it breaks down just a few months after you buy it. Have a qualified repairman inspect any piece of equipment you’re considering buying before you buy it. Ask if it’s still covered by warranty.
It’s also a good idea to find out the typical cost for repairs for this type of equipment. Some brands may have higher part costs (similar to how European cars like BMW have much higher costs for parts than American models), and factor that into your decision on what to buy.
3. Decide What Should Be New
While not everything needs to be brand new, some things, like computers, are better purchased out of the box. For one, they’ll be under warranty. But also technology changes so rapidly that buying even a five-year-old computer will already put you at a disadvantage. Computers are fairly inexpensive, so budget for new where it matters.
4. Consider Equipment Financing
Rather than try to limp along without the equipment your franchise needs to succeed, look at financing your equipment costs, either through your franchisor or another lending source. Taking the pressure of paying for your equipment up front out of pocket will free up your finances and ease your stress.
5. Buy Over Time
You might not need to buy every possible piece of equipment you might ever need before you launch. Instead, plan to set aside a percent of your profits so that you can buy more equipment over time. This will keep your cash flowing more steadily in the early months.
Having the right equipment is essential to your franchise. Use these tips to ensure that you save where you can, buy equipment that will last, and invest in new equipment where appropriate.