“I own a landscape company. When is the best time to buy lawn equipment?”
The question is, what is the best time of year to buy new equipment?
I personally like December. I like December for a whole bunch of reasons. One, it’s at the very end of the year. You can group all of your equipment purchases into one time period. Which, clearly means you have to project into next year and say, “Okay. How much are we going to grow? How much equipment are we going to need?” This requires some understanding of what’s happened in the last couple of years, along with some planning as to what you expect will happen next year, based on your marketing strategy and how much marketing you will be doing. Then also, understanding what’s happened in the past so that you can make those projections.
From that, you then say, “Okay. I think we’re going to need about this many trucks, this much equipment. Then, you group all of your purchasing, as best you can, for the year into that one time period. You go negotiate your purchase. Because, you’re buying in volume, you have more buying power, you can get a better deal. Then, what you can do from there because you timed this in December and you spent the money, at the last minute in December, you can write it off on your taxes for the current tax year.
Depreciation comes into play and things of that sort. But, you get to take the tax deduction in this year versus if you buy in January and spend the money now, you don’t get any tax benefits until the following March. For that reason, I like the buying power. I like that it forces you to think through what’s going to happen in the next calendar to do some planning. That’s important. To have several things in your business that force you to thinking and planning, that’s good. This does that. Then, the tax deduction is a big one.
Those are my very simple, basic reasons for why I think December is the best time to do it. But, the big take away is, how can you group as much of your purchasing into one time period, where you are doing all of your buying at one time? Probably all of your buying from one vendor, unless we’re talking about chemicals and such. I’m talking strictly equipment in this scenario. How can you buy all of that from one vendor and get the very best deal possible?