(BPT) - Should I lease or should I buy?
It’s a question everyone eventually stumbles upon. Most of the time there is no one-size-fits-all answer.
With the pace of technology moving faster than ever, and leasing options becoming more available, the prevailing wisdom is changing. The sharing economy makes leasing (or renting) easy and affordable.
Beyond considering leasing options for your personal car, residence and more, entrepreneurs and small business owners are taking advantage of leasing’s newfound prevalence for their business needs.
Hotel and accommodation
Technology has made the world feel small. You can do business with people across the world in real-time. More and more, small businesses are exporting their offerings around the globe. The US Small Business Administration even encourages doing so and provides counseling to start exporting.
But sometimes, you’ve got to go in person. For small businesses on a shoestring budget, the cost of traditional hotel rooms for you and your employees is a bill many would like to avoid.
Companies like Airbnb are now offering “business options” for business travelers. This can save money over a traditional hotel room.
Furthermore, for small businesses that may operate in two or more cities with employees frequently traveling between the two, startups can lease corporate apartments, permanent accommodations available to employees who are in town from another business location.
For many small businesses, corporate apartments make sense financially. They alleviate the hassle of booking hotels, minimize costs and allow employees to feel more at home when they are on the road.
Offices, conference rooms, meetings rooms and more
The word “co-working” has made its way into the startup community and taken a permanent place there. Co-working is leasing an office from a co-working group where many other businesses operate sharing the same facilities and community areas.
“Co-working just makes sense for entrepreneurs. It’s collaborative, it improves productivity. For me, starting the Lemon Collective was a natural extension of my work as an entrepreneur. I knew myself and others like me would work better and succeed more in the environment we envisioned and created,” said Kate Zaremba, co-founder of The Lemon Collective.
Organizations like WeWork, the world’s fastest-growing co-working space, provide small businesses a host of benefits from more affordable office space options to professional meeting rooms in locations all over the world, to the opportunity to work and collaborate next to like-minded innovative thinkers.
The icing on the co-working cake? Ninety percent of those surveyed in a co-working space said they felt more confident when co-working.
Technology for freelancers and small business owners
Whether you’re a freelancer, work as part of the gig economy, own a small business or have a side hustle that makes your laptop your office, leasing a computer might be an option you never considered.
Technology keeps changing and improving, and an outdated computer can put you at a disadvantage.
Software as a service, or SaaS, is a software delivery model where software is a subscription charge rather than one-time fees and is then centrally hosted. This is especially advantageous for small businesses that aren’t ready for an IT department.
The same holds true for hardware, as leasing laptops and other vital technology is an increasingly popular option for small businesses.
A study by Techaisle showed 36 percent of SMBs had PCs four years old or older. Many use old PCs as a cost-saving measure, not recognizing that outdated PCs lead to additional bottom line costs and significant productivity loss — outdated PCs result in an average of 42 lost productive work hours per year.
The big advantage: Costs remain consistent in a lease contract and your business can always afford to use up-to-the-minute technology. It also leaves capital available to invest elsewhere.
Small business breaks for leasing
“Each small business should check with their tax accountant right away to determine how leasing can be a benefit,” recommends Rick Stipe, VP of Dell’s Financial Services.
The IRS’ Section 179 permits a business to deduct the full price of either purchased or leased equipment in the current tax year — up to $1 million in 2018. And though both leased and purchased tech can offer tax benefits, remember to weigh the costs of depreciation on purchased goods.
The IRS considers a laptop an information system, with a reasonable lifespan of five years. Hardware retains its value, by IRS standards, for the length of its life. The latter includes monitors, scanners and computers. Leveraging these categories can help small businesses optimize their yearly taxes.
If you want to know more about how technology leasing can help your company or lifestyle, contact Dell’s Small Business advisor team and discover new possibilities for your bottom line.