Published on 5/5/2018
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Do I really need to buy that concrete pump?
The decision to buy a new or second hand concrete pump is not simply a financial one
Do I really need to buy that concrete pump?
The decision to buy a new or second hand concrete pump is not simply a financial one. Concrete pumping companies and pump operators big and small need to tick quite a few boxes before spending between $100,000 up to a $1,000,000 on this vital piece of equipment. Here’s some of those boxes :
1. Workflows. A frank assessment of their upcoming work flow must be made, taking into account an honest appraisal of previous work flows. Often you can be snowed under at particular times of the year with concrete pours, such as in summer, yet slow at others times, in the wet and colder months. Therefore previous months and years work flows are crucial to your decision.
2. Work security. Concrete pumpers do need to assess the permanency of their upcoming work. Is it going to last? Is it all dependent on one or two clients and projects? Are other factors involved? Competition? Weather? Financial impediments? How secure is the work contract?
3. Pump maintenance. Potential pump buyers need to assess their capacity to maintain, repair and service their pump. If they are outsourcing these services the cost of maintenance needs to be taken into account. A new concrete pump may come with benefits including guarantees, warranties and replacement parts. This could outweigh the cost of maintaining, repairing and servicing an older, used model of concrete pump.
4. Finance. If borrowing for the purchase of the concrete pump, pumpers need to consider the potential for interest rates to rise, the balloon payment at the end of the finance term, depreciation of the concrete pump and any late payment or default payment fees during the term of the loan. Do not rule anything out when it comes to finance. Exiting a loan or hire purchase agreement is often much more costly than entering one. If your work were to dry up as it were, could you dry or even wet hire your concrete pump? Would the earnings for being on hire meet your repayments and the ongoing cost of the pump?
5. Operational issues. Concrete pump buyers need to consider the labour issues surrounding a pump acquisition. Who is going to operate the concrete pump? Are they familiar with the make and model of the concrete pump being purchased? And what about the wages and or salary of the pump operator? If the upcoming work is hectic long hours and overtime may need to be factored in. If you are a small family pumping operation or a “one man band” labour may not be your major concern. But perhaps it should be. What if you are ill or injured and unable to operate the pump for an extended period of time. Do you have a back up plan in place?
6. New or used? Whether to buy a new or used concrete pump is one of the most difficult questions facing pumping companies. New pumps obviously cost much more yet they come with warranties, guarantees and service benefits. These do need to be studied carefully. On the other hand used concrete pumps often come without mechanical, engineering and parts warranties. They are much less expensive, though beware, the hours provided by the existing owner may not tell the whole story. What type of concrete has the equipment pumped? High strength concrete, steel fibres, low slump and HE (high early strength) concrete are just a few examples of concrete mix designs that exert a larger amount of wear and tear on concrete pump parts, than your standard “house’ or residential concrete mix designs.
7. Alternatives. Currently in Europe many pumping companies are leasing and even hiring concrete pumps rather than buying them. Is that a better option for you? By hiring a concrete pump for an extended period to meet your existing work requirements you are then in a position to reassess this significant capital acquisition in the fulness of time. Though this decision may cost slightly more in the short term, it could save you thousands in the long run, if your ongoing cashflow doesn’t meet your expectations. And what about the money you are outlaying for your concrete pump? Could the money be better spent elsewhere in another business or investment?
Whether it is a Putzmeister, a Flowcrete, an Everdigm, Schwing or simply a non descript number, the same principles apply. Is the decision to buy a concrete pump a sound one from a commercial, long term and personal perspective? Currently in Europe many pumping companies are leasing and even hiring concrete pumps rather than buying them. Is that a better option for you? Unfortunately that’s a question only you can answer…
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