NFIB

Purchasing New Technology During a Slowing Economy
08/ 01/ 2002

It's important for a small business owner to think about cutting costs in an uncertain economic environment. But when new or upgraded business equipment is urgently needed, a slowing economy can offer bargains too good to pass up--if you search and buy wisely. Jeffrey Moses explains in today's Workshop.

With everyone from large corporations to personal computer users cutting back significantly on tech spending, the major computer manufacturers have been forced to go into price-war mode to maintain their revenue streams. This offers tremendous opportunities to small business buyers. Purchasing either online or in retail office supply stores, you'll find that even the latest, most powerful computers have come down in price during the last six months.

The question, of course, is should a small business stretch itself to purchase new technology. The answer depends on two main factors: to what degree would the upgraded technology make your company more productive and competitive, and how much would the purchase jeopardize your cash flow until the expenditure was absorbed? Work with your business advisor or accountant on these points to determine how much, if any, you should spend.

If you're in need of new equipment and are having trouble justifying the expense, consider buying technology that's no longer considered absolutely state of the art. Does your graphics department really need computers with the latest and fastest processors, or can it function perfectly well with computers that have been out for a year or two --and could save you 40 percent or more when compared to the newest systems? All the major manufacturers offer a range of models, and youÆll likely find everything you need in a computer without straining your budget.

If you decide to economize, make sure your purchase provides expandability in the features you'll need most as your company grows. If you're compromising on storage capacity, for instance, make sure that it enables connectivity to peripheral hard drives or optical storage devices. These are usually quite economical, and will give you unlimited storage capacity in the future. Keep in mind also that even the latest technology usually requires the addition of peripheral equipment at some time. You just can't find internal drives ample enough to store large numbers of Photoshop or Quark documents (not to mention video or audio files).

If you desperately need new equipment but have no budget whatsoever, consider buying used equipment. Check online or in the back of computer magazines for national dealers who repair and resell computers. Or you may find dealers locally who sell used machines. Warranties are important when buying used equipment, but a warranty is no stronger than the dealer who offers it. Ask your associates for leads to reputable dealers. In general, you'll be most satisfied when purchasing from established, well-known dealers.

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