Equipment and tools can cost anywhere from hundreds to thousands to hundreds of thousands.
Despite the cost (one that’s almost always ongoing), what you will see is that entrepreneurs spend an endless amount of time thinking about their growth, marketing, clients, revenue, and whatever else, and far less time thinking about the tools and equipment powering the business.
And when you think about the amount of tools and equipment the average business has, from laptops to machines and everything else in between, there’s a lot to consider that’s simply overlooked. Read on to find out more.
How Much It Can Cost to Replace
Replacement cost is almost always underestimated. And the bigger issue is that everything is always more than it seems to replace. For example, a simple laptop isn’t so simple once it’s configured for work. Most work laptops are high-spec devices with licensed software, customized settings, security layers, and stored data. Even if you replace the laptop and can download the licensed software, you still have hours or days of setup.
Depending on the laptop, the cost of replacement might make you cry more. The new MacBook Pro (a staple business choice), for example, costs $1,599.00 for the most basic version. And how many of us actually take out AppleCare? You could cover it with tools and equipment insurance, which is more likely to be a better financial cushion than standard product warrant and care packages.
The same applies to physical equipment. Equipment like cameras, power tools, audio gear, machinery, and diagnostic devices—the list could go on and on. It depends on the type of business and what equipment is needed, but it definitely might add up to more than the expensive MacBook Pro costs. These aren’t off-the-shelf purchases you casually repeat.
There’s also the timing issue. Replacements aren’t always available immediately. With that, costs extend beyond the price tag and into lost income.
How Much of the Business Relies on It
For many businesses, tools and equipment are the operation of the business. Going back to the laptop, if you’re an online marketing startup company and your only laptop breaks, how will you log on and fulfill orders?
Or if you’re an industrial robotics installation company and your only forklift breaks beyond repair, meaning you can’t transport parts, how will you fulfill the installation deadline? You can’t lift a 300+ kg medium-duty industrial machine and carry it onto your lorry to go to the customer.
And we could keep going with the examples.
Even businesses that appear service-based rely heavily on tools such as scheduling systems or payment devices. There might be a few random tools that don’t apply, and you can survive without them, but you would still need to cover the cost of eventually replacing them.
That It’s Simple to Protect It With Insurance
Protection is literally one of the simplest answers. Granted, we will say that insurance can’t protect you from not performing a business operation with the gear you need to replace, but it does cover the cost and potentially makes it a quicker replacement process. And if it’s not quicker, at least you cry less because the only price you need to pay is the excess of your premium.
Tools and equipment insurance is so easy to take out online. It covers:
- Theft
- Accidental damage
- Loss during transport
- Replaces work clothing
- Replaces machinery
Really, it replaces anything accepted and covered in the policy. We promise, the cost of the monthly premium will be nothing compared to the cost of replacement out of pocket.
Who Else is Affected When Tools or Equipment Break?
The impact never stops at the owner. Business depending, there’s a long list of people impacted.
At the very least, it’s one customer who was waiting for an order or a client who misses their deadline because you missed yours. It’s so frustrating for everyone involved. The people you work with might also be affected if they can’t do their jobs, and the momentum drop has a knock-on effect on everyone involved in the business.
There’s also the reputational effect—reliability is a competitive advantage. And the issue with reputation damage is that it’s always difficult to come back to. There’s news circulating at the minute that talks about how just one negative review can be a catalyst for people deciding to not work with your business, up to 22% of consumers will say no to your business.
Entrepreneurs build businesses to create independence and control, and when something goes wrong with your gear, all of that goes out of the window. Protecting them is a great financial fallback, but it doesn’t mean nothing will ever happen.