Fire Truck Financial Tools for every stage of a fire truck purchase
Each fire truck purchase has 3 separate financial phases. Each phase has a central financial question to answer. You must hear a “yes” at each phase to get a new truck.
It’s easy to mix up the phases. If so, you’re answering the wrong question with the wrong information.
Each phase has a different ultimate financial question. Each phase requires a unique case study to help your decision makers agree with the purchase. Miss one and you don’t get the truck.
The 3 financial phases of buying a fire truck are:
Justifying the purchase:
- You must answer the question “Should we buy a truck now?”
- And you must provide a financial case study that overcomes the 3 “no-buy” scenarios.
- If you don’t, you will not even get the buying process started.
Budgeting the purchase:
- You must answer the question “Can we afford the truck we need?”
- You must convince the board that you can fit the truck you need in the budget you have.
- If you don’t, you can spend lots of time and energy only to get shot down as too expensive.
Financing the purchase:
- You must answer the question “What’s the best way to pay for the truck?
- This doesn’t mean getting a loan. You should review your alternatives to paying for the truck (grant, reserves, borrow) and then develop the best financial plan for your department.
- You can easily hurt your department later if you make a financial mistake in this phase.
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