Farmers in the United States earn over $1 trillion every year which is more than the entire country of India. If you want to get started in agribusiness, one of the things you’ll need is equipment.
Purchasing large pieces and numbers of equipment can seem daunting when you haven’t earned a penny yet. That’s where leasing equipment comes in.
Before you jump into buying or leasing equipment for your farming business, read this article. We’ll share with you four factors to consider before you lease or buy anything for your business venture.
Benefits of Leasing Equipment
Before we get to the benefits, let’s take a quick look at some of the advantages of leasing equipment so you can understand why you would want to do so.
Some of the reasons farmers lease equipment include:
- Lower upfront costs
- No maintenance costs
- Access to the best and most current equipment
- No replacement costs
- Tax deductions on lease payments
Another advantage is that if you decide to scale back or discover an aspect of your farm isn’t right for you, it’s far easier to return a piece of equipment instead of having to try to sell it for a loss.
Factors to Consider
Before you jump into leasing equipment, here are the four things you need to consider to determine if it’s the right choice for you and your agriculture operation.
1. Your Current Budget
Money can be tight when you’re just starting a business, so you likely won’t have hundreds of thousands of dollars on hand to buy everything you need to get started. With leasing, you don’t need nearly as much money but can get the same equipment.
2. Your Need for Updated Equipment
If you know you’re going to want the latest edition of a certain piece of equipment, you may want to lease it instead of buying. When you lease, you can get the latest and greatest tools of the trade every year without having to buy them.
3. Your Business Growth
How quickly you want to expand your agribusiness may determine if it’s best to lease or buy equipment. If you’re expanding quickly and don’t want to wait to save up money to purchase what you need for each expansion, leasing makes far more sense.
4. Your Long-term Plans
Carefully think about your long-term plans for your business. Can you see yourself doing the same thing ten years from now? Or twenty years from now? If you’re not sure it’s going to be right for you, lease equipment so you can change direction quickly.
For example, if you started with cattle and have a costly watering system leased, you can trade that in for irrigation equipment and jump right into growing crops.
Want to Learn More Ways to Grow Your Agribusiness?
Now you know some of the things you need to consider when leasing equipment for an agribusiness. As you can see, there are many benefits but it may not be right for everybody.
If you want to learn more about how to help your business grow and thrive, keep reading our blog. It’s packed with posts that will guide you through every stage of your entrepreneurship journey.
