By Andy Rae, Senior Vice President of Equipment & Marketing, Heidelberg Americas
Why do you buy capital equipment?
Hopefully, your answer is to make as much profit as possible from that purchase.
Many think profit potential is related to the price of the equipment, but that couldn’t be further from the truth!
To justify a 25% price premium, you only need about 9% more output for the same cost per sheet —yes, 9%! This is because finance and depreciation only account for 30% of your budgeted hourly rate (BHR). The rest of your BHR is linked to your fixed and variable costs.
So, when looking to buy capital equipment, you should consider these key investment questions:
- Based on the price of the equipment and its real potential output, what is your cost per sheet going to be?
- Can you utilize this capacity?
Heidelberg has conducted in-depth research...