Okay, I’m guilty. When it comes to an equipment upgrade for my business, I’m pretty stingy with my money. I’m one of those people who’ll wait for my laptop to grind to an almost complete halt before getting an external hard drive or paying for extra Dropbox space to fix my dire storage situation. Actually, scratch that — I’ve never paid for extra Dropbox space. But I did recently purchase a 2TB hard drive from Costco when I realized I’d maxed out my laptop, Dropbox and Google Drive storage.
If you’re a freelancer considering an equipment upgrade, chances are you’re looking at a lot of dollar signs. If the scary price tag is making you put it off, your revenue and business development can both take a hit when the lack of proper equipment keeps your business from growing, acquiring new clients or staying ahead of the curve. Let’s face it: If you’re a video editor, you don’t want to spend twice as much time waiting for clips to render because of outdated editing software. You’ll lose hours of time that could’ve been put towards completing projects faster or taking on new clients.
Despite my stinginess when it comes to storage, there are certain equipment investments that I’ll spare no expense on: my phone and laptop. I use both all day, every day. It’s no wonder that the majority of my time is tied to the performance of these digital tools.
If you’re like me and want to prioritize certain pieces of equipment over others, a good way to assess the relative value or return on investment of an equipment upgrade is to calculate how much time you spend using that tool, and multiply that number by your average hourly rate over the lifespan of the tool. When you’re doing this, you should consider how much time an upgrade would save you, and to what extent it could expand your client list or roster of projects.
Over the course of your career, you’ll have to make countless equipment upgrades to stay ahead. Dealing with outdated equipment can be anything from a small annoyance to downright dangerous, so it’s important to make a long-term investment in your business and upgrade when you need to.
Keeping Equipment Upgrade Costs in Check
If you’re looking to maximize your return on investment, follow these strategies to manage and decrease the costs of new equipment.
1. Seek out Secondhand Replacements
When it comes to hardware, sometimes secondhand is the way to go. Need a new camera? Check Craigslist or Kijiji first. Sometimes you can find items that are straight out of the box — unreturnable to the manufacturer, but as good as new — and often at a deep discount. Be sure to check equipment and seller reviews online if you’re thinking about buying secondhand, especially when longevity matters more than looks.
2. Research Alternatives
Why not give it a test-run? Tons of software platforms give out free trials. Some are time-limited but have full functionality, while others last infinitely with a limited scope of functionality. I’ve found that limited functionality trials are enough to provide additional value to my business without having to spend big bucks on the full package. And if you want to be clever with your money, you can seek out “no name” or generic versions of software, like design programs. Do you really need the top-of-the-line Adobe Creative Suite, or will a set of cheaper design programs suffice? If you’re curious, check out this list of the best free alternatives to expensive software.
3. Build Costs Into Your Client Fees
When you do have to make a new equipment purchase, don’t shoulder the expense alone. Build the cost of your equipment into your hourly or project fee with your clients. It’s not just time and effort that gets the job done — it’s the equipment, too. Factor it into your proposals and invoices just the same as you do with time. Divide the monthly or yearly cost of equipment over its lifespan to decide what proportion of the expense you can reasonably charge your clients.
4. Expense Equipment
Sometimes, you just can’t avoid a proper equipment upgrade to keep your business thriving. Whether you do your own taxes or have an adviser file for you, make sure you’re including all equipment-related costs in your list of business expenses. If you’re not sure how this works, an adviser can help you calculate depreciation over time so you’re maximizing your tax deductibles. You’d be surprised at what you can expense — even magazine subscriptions and professional industry publications.
Making the decision to upgrade your equipment is always difficult. As freelancers, we’re hyper-aware of our business expenditures — and equipment is one of the biggest line items. Take some time to think about equipment upgrades as long-term investments in your business, and try to calculate a rough estimate of your return on investment. If you’ll save time and money in the long run, it’s time to upgrade.