Is your “free” equipment potentially costing you thousands of dollars? Let’s explore more in this article.
The context
The coffee industry is a strange one. If you didn’t know the historical background, you would scratch your head.
How can your coffee supplier give you machinery completely for “free”?
Well, you know deep down that nothing is for free.
The Japanese proverb is that nothing costs as much as something free.
The ways you pay for “free”
You are paying for your free on loan equipment in the following potential ways:
In increased pricing forever (see here)
Through lower-quality coffee
Cheap or poorly maintained equipment
Lost customers and sales
Damage to your brand
The above are a few reasons why our preference is to convince cafes to steer clear of free on loan whenever possible.
The alternatives to free on loan
So what do you do if you don’t want to pay the price of “free”?
There are a lot of other options such as:
Buying your equipment
Financing your equipment
Renting your equipment
Others
This way you have full clarity and control over what equipment you are choosing. You also have clarity on the quality of the coffee products you are choosing and what you are paying for them.
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The benefits of choosing a different way
The benefits include:
Clarity and transparency
The busier you get the less you pay for your equipment
Your equipment stops being a cost once you have paid it off or once it’s fully depreciated (see here)
Increased profitability through the life of your cafe
If you ever sell your cafe, you get more value as you are selling the equipment (see here)
And there are plenty of other benefits.
Why don’t more cafes go away from free on loan?
That is a great question. The reasons may include a lack of knowledge, established practice, the seeming ease of “free”, the perceived lack of commitment and hesitancy of trying a less travelled path.
You can read more about the historical context here.
Robert Forst famously said:
“I took the one less travelled by, And that has made all the difference.”
Things that are innovative, new and exciting are often adopted slowly at first. Mostly by the early adopters. Then they become more widely understood and accepted.
Therefore, reasons such as “this is how it’s always been done” or “most people do it this way” are never good enough. These types of reasons are a strong sign that it’s time for a change.
We are glad to report that many cafes are insisting on kicking free on loan goodbye. And these cafes will be the superstars and trailblazers of tomorrow.
Next steps
Have questions or want to discuss further? You can get in touch by filling out this form.
