There are generally two types of people- those who must have the latest piece of technology no matter what and those who upgrade when what they have no longer works. Which person are you?
Assuming that both people bring in the same amount of revenue, one of these people spends an average of 3x more in expenses, resulting in 3x less profit/income. They may have the latest equipment, but they're also more likely to be living on the financial edge. Those who wait until their equipment dies often save themselves from the potential pitfalls of buying gear that hasn't been in the marketplace long enough to be tested by regular users and receive accurate reviews.
According to Moore's Law, if you use your technology until it breaks, you will get exponentially better equipment at an exponentially lower price. However, if you purchase new technology as soon as it's released, you may be keeping up with the latest trends but you end up spending more money and time learning new gear each year, instead of every few years, which means less time spent on functions essential to building revenue in your business. Tech companies know that early adopters- who must have the latest technology, will buy whatever the latest release is, regardless of whether it's a significant improvement or not. These small yearly upgrades just to have something new on the market is how tech companies make greater profits and how early adopters get suckered.
Now, if your business model is to always have the latest equipment and your clients pay a premium for you to keep up with equipment trends, than it is an essential part of your business strategy and you'll need to make sure that you're regularly capitalizing on your previous investments before they see a significant drop in value so that they aren't going to waste. Another option (depending on how often you use certain pieces of equipment) is to rent the newest equipment instead of purchasing it, so that you aren't paying full price for something that will be useless to you in a year or lose its value at an exponential rate. When you know how often you use your equipment, and you measure that against the cost of purchasing new equipment annually, you can make the smartest business decision for you.
My personal upgrade strategy is to budget in advance for upgrades- knowing that good cameras last about two years and good computers last about three years. Even then, I still wait for things to break before replacing them, but at least I've budgeted this expense into my business needs. What equipment replacement strategy works best for your business? Share your thoughts in the comments.
Anne Ruthmann is a lifestyle & wedding photographer from Boston, MA. She spent 10 years practicing marketing & management in corporate and non-profit businesses before pursuing her passion for photography in 2004 as an independent small business. She loves helping others find creative and smart solutions to business problems. Follow her on Twitter to see her daily adventures and thoughts.