Capital Equipment Replacement – What you need to know!

Capital Equipment Replacement – What you need to know!

Capital equipment replacement is always a tough subject to discuss because the expectation that there is a cookie cutter methodology for replacement has become the norm. The reality is that every operation is different and each has it’s own set of challenges. Some of those challenges could be location, some could be that equipment is stored outside, and others could be as simple as the level at which the equipment is maintained. Whatever your methodology for replacing equipment the best way to approach the subject is with no emotion towards it at all.

Understand what you are purchasing.

There is no doubt about it that the golf buisness is a relationships buisness and we like to reward those that have supported us, helped us or quite frankly in this day and age of poor customer service, they show up. The fact is that just like a salesman you need to understand the ins and outs of everything you are purchasing. What makes the equipment great, in what situation does it not perform great, what does it cost to maintain, should we lease it or purchase it, and what options does it need. These are just some of the questions you should be able to answer on each piece of equipment you plan to purchase. This research should also come from colleagues in the industry that use them but your main evaluation should come from running the equipment on your own golf course not how well it performs at someone elses’s. I would also always encourage you to look at every brand of equipment so you understand the goods and bads of all of the options before making a decision after all your making a decision with your owners money not your own, right?

Options

Options are great and some of them have really great benefits such as a canopy in a location like Florida, solid and weihle rollers on greens mowers so you have options depending on the season. However some options don’t perform that well and can really cause the machines price to skyrocket. There is one option for fairway mowers that costs around 6-8k per machine and when just by itself not a big deal but when you add the option across the 3 fairway mowers you are buying that could be as much as $24,000 (the cost of another heavy duty utility vehicle). I also like to look at things and what they cost in a different way and that is how many rounds of golf would it cost our facility to pay for that? In this case at $100 rate, lets say, 240 rounds of golf to pay for that option. My suggestion is make sure you are doing your homework and get what you need not just the extra bells and whistles.

Emotional Decision

I list emotional decision because it is probably the biggest reason why people struggle to get new equipment. What are you utilizing that tells you that you need new equipment? It seem the machine is always down? Maybe you or your team just don’t like it? Maybe you feel its old and its just time to replace it. The problem is these are emotional decisions. We are purchasing equipment based on a feeling not based on actual data. Our emotions can cause us to make poor decisions all the time like that new truck you just had to have and then later wish you wouldn’t have purchased. It’s like getting that new iphone because it’s the newest one out not because you needed one. That decision gets even easier when you are not spending your own money…. ahhh just add on another triplex or another cart no big deal. Running a buisness you have to be more responsible. Which is why your decision to purchase should be driven off of data not based on emotion. It becomes a much easier conversation with stake holders when you can back up what you present.

Ask for Help

I know your saying right now of course he’s going to put this in the post he consults so hes trying to promote his business and some of that is true. However think about this a minute. At best, a course is generally purchasing or leasing equipment every 4 years and for some many years later. We all know that pricing is all over the board depending on location, club, relationship, etc. So if at best you are buying equipment every 4 years how do you know that the price your getting is a good price? Does it matter to you? Whether it is my consulting company, a friend who just made a purchase, etc. It is important that you know and understand that the first price isn’t the best price and the 5th price may not be the best price. Understanding what equipment should cost is a must when you are going through this process.

Closing the Deal

One of the most important things I tell people is to always have the data to backup what you are presenting and don’t present something that you wouldn’t buy if you were the owner of the course. You have to understand that most of the time you are selling this to people who probably don’t have a great understanding of turf equipment and they are depending on you to make the best decision for the club. If they don’t walk out of the meeting with you confident that you are looking out for the best interest of the club these deals just won’t get done. They want you to make them feel comfortable making a decision on a subject they know very little about one of the most significant costs outside of  labor that a club has. So keep in mind when you present have your data supporting your decision, take the emotion out of it, let the data speak for itself and remember your audience.

 

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