However, there are several reasons why it would be unwise to act on the urge to lease the POS equipment. Read on and find out why.
Huge Long Term Cost
A POS system may cost $500 to buy, yet the company is offering you the option of paying $30 a month for a minimum of 36 months. This may seem attractive since it may relieve some of the financial pressure you have.
However, when you calculate the long term cost of leasing that equipment, you will realize that you may end up paying more than twice what it would have cost you to buy the equipment outright. Be smart and avoid this guzzler of your cash.
You may also end up being restricted from using POS software obtained from another source other than the company from which you have leased the equipment. This can prevent you from benefiting from new software that may have served your needs more efficiently.
For instance, another vendor may have software that can alert you when your inventory needs replenishing, but you may not be able to acquire this software because of contractual obligations imposed by the firm from which you leased the equipment you are using.
Increased Overhead Costs
Leasing POS equipment for your small business may bring with it an unforeseen overhead: equipment insurance. The vendor of the equipment may require you to insure their equipment for the duration of the lease – this cost will increase your business expenses. You should therefore be wary of the hidden costs associated with leasing business equipment such as point of sale equipment.
As a small business owner, it is advisable to retain your ability to make any decision that you feel is critical to the success of your business. A POS equipment lease agreement takes away your ability to make radical decisions regarding the system you use to process payments. This is because most lease agreements impose hefty penalties in case you decide to terminate the lease agreement before its due date.
Why should you accept being strapped to a POS company for years? Retain your prerogative to make decisions for your business by avoiding lease agreements that impose a huge cash penalty on you in the event that you decide that another system vendor has a better solution to your business needs.
As you can see, there are many hidden pitfalls to leasing POS systems, so think very carefully before you sign on the dotted line of a lease agreement. To be doubly sure you are taking the right step, share this information (via social media) with other small business owners so that their input removes any lingering thought about leasing POS equipment.
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