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Since You Asked...

The questions dealerships ask, but other IT companies are afraid to answer.

Should We Lease or Purchase Hardware for Our Dealership?

Does Your Dealership Have a Hardware Replacement Strategy in Place?

Determining the Cost of Managed IT Services for Your Dealership

rocketwise's Ideal Client Profile: Are We a Good Fit?

Should We Lease or Purchase Hardware for Our Dealership?

As an IT partner for many machinery and equipment dealerships across the country, we often receive questions regarding the industry. One common question we encounter is whether it makes more sense to lease or purchase hardware outright. This is an excellent question, and today, we will answer it as best we can. However, the answer is a bit complicated, to say the least. Let us begin with complete transparency by saying that we are not Certified Public Accounts (CPAs) and, therefore, are not qualified to talk about the tax implications of this decision. We highly recommend running these decisions past your tax professional to make more informed decisions based on your situation. That being said, let’s dive right in. Leasing vs. Purchasing Hardware Leasing means getting an outside financial company (like our financial partner GreatAmerica) to pay for the invoice amount of your upgrade project and then making monthly payments to them until the term of the lease is fulfilled. Two types of leases can be purchased in repayment periods of 12, 24, 36, and 48-months. $1 out lease means that the hardware can be purchased from the leasing company for a dollar when the lease term is complete. Fair Market Value (FMV) lease is the other option and has a lower monthly payment. At the end of the FMV lease, the client has the option of paying market value (decided by the leasing company) or, packing up the hardware and sending it back to the leasing company. We always recommend the Fair Market Value option because of the flexibility it gives. On the other hand, purchasing hardware means paying the full invoice amount out-of-pocket and gaining full ownership of the hardware. You bear the depreciation costs and can sell the hardware at market value (decided by the market) anytime you like. Let’s discuss the pros and cons of leasing hardware to give you a deeper understanding of leasing vs. purchasing. Pros and Cons of Leasing Hardware The main pros of leasing are that it can be easier to expense a lease payment than to depreciate equipment and it can significantly help with cash flow. For example, if a network replacement project costs $11,000 with labor, your monthly lease payment for a 48-month term will be around just $275 per month. This is a significantly lower initial price to pay for the immediate benefits of the hardware. You save $9,350 of cash flow after the first six months. The con of leasing can also be found in the mentioned numbers. Using simple math, you can multiply the monthly payment ($275) by the number of payments (48-months) you will see that the $11,000 upgrade project will cost you $13,200. This is where your qualified tax professional comes in. There are cases where the extra cost ($2,200) of leasing gets in tax savings. The other con comes from the risk of committing future earnings. It is not always easy to know from year to year what your future income will look like. One problem with leasing and debt, in general, is that a fixed expense is in place, which makes it harder to adjust to market pressure in the future. Conclusion Hopefully, you now have a better understanding of the difference between leasing and purchasing hardware. As mentioned, it is always better to run these things by your tax professional to understand the tax savings you can get for leasing. If you can get enough savings to lower your long-term leasing costs, for example, $1,000 on $13,200, we suggest paying a little extra for leasing, because it is worth the cash flow your business can retain. Again, this depends on the financial state and individual needs of your dealership. If you have questions that are not addressed here, please reach out today. We might not know the exact answer, but we will give you our honest opinion and help connect you with the right people.

Does Your Dealership Have a Hardware Replacement Strategy in Place?

Does Your Dealership Have a Hardware Replacement Strategy in Place? No business likes to experience downtime or disruptions because of the negative financial impacts that are involved. In the case of machinery and equipment dealerships, it can mean the difference between profit and loss for the operation. It isn't easy to visit a dealership, and the work is often overwhelming, but there are things that can be done with your technology to avoid downtime. Let's discuss some hardware replacement strategies that help stabilize your IT operations and limit emergencies and downtime. Hardware Replacement Strategies Here are some hardware replacement strategies you should be implementing for your machinery and equipment dealerships. Proactive vs. Reactive It is no secret that reactive decisions made in an emergency are often wrong or worse, expensive. In contrast, proactive planning can be far less expensive than reactive spending, especially when it comes to dealership technology. rocketwise offers an Account Management solution for a proactive approach to dealership technology. Our clients receive an annual budget overview for the calendar year, and it includes quarterly detailed budgets, outlining which hardware will need to be replaced within its useful lifecycle. This avoids reactive spending and puts power back into your hands with proactive planning, which results in less downtime and disruptions. Useful Age Timeframe So, how do you know the ideal hardware replacement timelines? We have done the research and learned how long hardware is statistically reliable. Here are the recommended replacement timelines on the following: Infrastructure (Servers, switches, firewalls, wireless access points, battery backups) – 60 months Workstations and Laptops – 36 months Mobile Devices (Smart Phones or Tablets) - 24 to 36 months This will give you a better idea of how often you need to implement hardware replacements, and you can plan accordingly. Reliable Use and Affordable Planning Technology hardware only has one value for your dealership – usage, which becomes evident when you try to resell tech hardware and it has little to no returns for your business. Our philosophy is to buy slightly above the exact specification of hardware that a dealership requires today. Such purchases provide incredible long-term value because it future-proofs your hardware for longer. For example, for physical servers, we make a list of the software that runs on the server and the size of data storage currently required. We then use the software system requirements and vendor feedback to specify server hardware that will handle the current workload and the projected workload at the end of the hardware’s life cycle. Occasionally, we will need to do a hardware upgrade to accommodate a new business application but 99% of the time, the specified server works great for its expected life cycle and the client saves thousands of dollars. Moreover, we have developed a standard hardware specification for workstations and laptops that we keep on the shelf, ready for deployment. This adds to business efficiency and the configuration works for all but the field service grade laptops that service technicians' need. By standardizing on a single platform, we can streamline the setup and configuration processes and keep costs low. Takeaway The fact is that when you proactively replace hardware based on industry-standard reliability periods like rocketwise, you can significantly reduce costs, downtimes, and disruptions. This, in turn, will improve productivity for your dealership and increase its revenue and growth. Most of rocketwise's revenue comes from flat-rate support contracts, and we do not lose sight of this by inflating the prices of replacement hardware. We know that sticking to the recommended hardware replacement schedule, unplanned downtime, and outages almost disappear - a true win-win situation for everyone! We want your dealership to have the stability and efficiency that it deserves–and nothing less. Our interests lie in keeping your hardware up-to-date and at peak performance, as it should, so your dealership runs at top shape. If you want to learn more about hardware replacement strategy or get your hardware within useful lifecycles, contact us today.

Determining the Cost of Managed IT Services for Your Dealership

At rocketwise, we are often asked, “How much do managed IT services cost?” This question seems fairly simple, given that we provide managed IT services for equipment and machinery dealerships across the U.S. However, the answer is not simple. To give a comprehensive answer, we have come up with a quick overview of some factors to help you understand the typical price range of managed IT services. We will discuss short descriptions of each factor that influences pricing. The pricing here is targeted at dealerships with anywhere between 25 and 350 employees and no in-house IT departments or outsourced IT support. If you have a larger business or an in-house IT department, we can provide you suitable information and options like our Co-Managed IT Services. How Much Do Managed IT Services Cost? For flat-rate managed IT services, pricing typically ranges between $100 and $160 dollars per user per month. This service includes core systems and functions your dealership needs to support the business. Here is a breakdown of what managed IT services buy you in this price range. Server and network management Data backup services Disaster recovery and business continuity services Network firewall security Endpoint security Microsoft 365 subscriptions All-inclusive helpdesk support Typically, you need to hire one or two permanent, in-house IT staff members to benefit from these services and functions. However, with managed IT services, you get a team of experienced professionals to handle it for you. Many factors affect pricing, but the primary ones are the complexity of your company’s technology and what services you require. Below are a few impact factors that will help you determine an estimated cost of managed IT services for your dealership. You can review these factors to select a number from the previously mentioned price range and multiply it by the number of users you have. The resulting figure will give you a fair estimate of your monthly managed IT service costs. However, keep in mind, rocketwise offers a variety of other pricing options as well. These include options for cloud-deployed desktops, hosted servers, remote workers, hardware as a service, and other scenarios. What Impacts Your Monthly Price? As mentioned, the complexity of your dealership’s technology and its structure directly affects your monthly rates. You can gauge the complexity by how your dealership operates, the clients you serve, the number of office locations you have, and the line of business applications you use. These are all things that increase the complexity of your technology and add to your monthly managed IT service costs. Core Business Applications There tends to be a direct correlation between the number of core business applications you use and your IT systems’ complexity. These are the applications you need to run your business. These applications include accounting systems; CRM applications like Salesforce, HubSpot, and DP360; dealer management systems like DIS, CDK, and e-Emphasys; or one of the many other industry-specific business applications that most dealerships use. Number of Locations The more locations and remote workers your dealership has, the greater the complexity of your business. Hence, business owners need to ensure all the locations work together smoothly and that everyone gets access to the resources they need while having no outside interferences. Total Amount of Data This factor can often have a major impact on pricing because it affects the storage volume that needs to be managed, protected, and potentially recovered. The variable nature of data between companies means that this factor may not be included in the typical per-user pricing. There’s No One-Size-Fits-All Price. The mentioned factors can give you a decent estimate of your managed IT service costs. However, a more accurate estimate will require you to engage with a provider and do more in-depth research and review. This project does not need to be huge but will require a few hours of your time to be done properly. The goal is to get enough information about your dealership and objectives, along with a review of your current technology so that a proper scope of services can be identified. Once you have this information, you will be able to get prioritized recommendations on what your business needs and how much it will cost in terms of services. If you want to learn more about determining the cost of managed IT services for your dealership or about the pricing of rocketwise’s services, schedule a call today.

rocketwise's Ideal Client Profile: Are We a Good Fit?

Technology solutions are the primary area where rocketwise’s specialties lie. Over our history in the equipment and machinery dealership industry, we have helped dealerships thrive by enabling them through our expertise in technology. Along the way, we have correctly identified the ideal clients that have proven the most successful fit for our services. Identifying the ideal client is an important part of the discovery process. To give you an idea of whether we are a good fit for you, we have developed our ideal client profile. It will help you understand who our services are ideal for and why. What Does Our Ideal Client Look Like? Here are a few factors that make up our ideal client profile. You can check them out to see if we make a good fit for your machinery dealership. Size of Company Our ideal clients generally have a company with anywhere between 25 to 350 employees. We have come to realize that while companies with ten or fewer employees may find value in our services, they are not large enough to benefit from our offerings. We often work with companies with less than 25 employees. However, we charge a monthly minimum fee, which is not ideally suited for their company’s size. Additionally, our experience has shown us that companies with over 350 employees typically have an in-house IT person or department. While we successfully serve companies of this size, it may be that our “Co-Managed IT” services are the best fit. Technology Reliance Being an IT partner for businesses means that the dealerships we work with substantially rely on technology. We even have a qualifying question to gauge technology reliance. We ask how long the data/network can be unavailable before it hurts their business. We are looking for companies that cannot imagine being offline for more than a few minutes before it starts to hurt their business. rocketwise specializes in providing highly available and responsive tech solutions. Thus, an ideal client for rocketwise is reliant on technology to move their business forward. Business Segments While we serve businesses in various segments, we bring the best results for equipment and machinery dealerships. Our core focus is to improve heavy equipment dealerships by enabling them to deliver extraordinary service and experience. Locations Our clients come from all over the U.S., and our team and processes were designed to facilitate clients with multiple locations across the nation. The more locations, the greater the complexity. Being a specialized IT company, rocketwise excels at supporting clients with more than one location. We ensure that our clients’ locations are working together smoothly, and they all get access to the resources they need: the support we offer differentiates us from most other IT companies. Methodology We have a proactive, maintenance-based support system. Our main goal is to keep dealerships running smoothly and uninterrupted. We do this in ways that are often invisible to our clients. We have invested in automation platforms that recognize patterns and run scripted routines to fix problems for our clients. For example, we average around 30,000 automated responses on a standard 25-employee environment. We routinely go through the service tickets that are human-generated to figure out what we could have done to stop the problem from occurring in the first place. We frequently hear our clients say that their technology has never run better, giving less unplanned downtime, but they rarely see us. This can be alarming for some clients, so we like to point this out right up front. Clients willing to pay a monthly fee for improved network performance will love our services. Clients that need to see an on-site human technician regularly to see value in a monthly service fee may not find us to be the best fit for their business. Conclusion These factors determine what our ideal client looks like. If you can relate to these factors, you are an ideal client for rocketwise, and we’re eager to form a meaningful technology partnership with you. Successful dealerships divide and delegate work to capable people. Our specialties benefit you most when we provide delegated tech support and are involved in strategic planning and execution. We excel at handling your business’s day-to-day, tactical needs, and we are even more effective when you involve us in your strategic planning. If you want to learn more about rocketwise and our services for equipment and machinery dealerships, please visit our website or give us a call today.

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