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Scott Parent
Marketing Communications Manager  
Thursday, December 1, 2022

Jeff Bezos’ Advice to Small Businesses: Avoid Making Large Capital Expenditures During Uncertain Times

It’s no secret that we’re living in some pretty turbulent economic times. In the last several weeks major layoffs have been announced at Amazon, Meta, Twitter, Re/Max, GE Appliances, JPMorgan, Electrolux, and HelloFresh to name a few. The reason for this economic downturn according to Business Insider is two-fold: slowing business growth and increased labor costs. While companies drastically reduce headcount, the downturn also puts challenging pressure on business investments.

For Companies of All Sizes, “Take Some Risk Off the Table”

Larger companies often have cash reserves to help weather these types of downturns, but many smaller employers do not. Earlier this month, Amazon Founder Jeff Bezos issued a warning to small businesses about laying out large amounts of capital during these uncertain economic times:

“The probabilities say if we’re not in a recession right now, we’re likely to be in one very soon,” Bezos said in an interview with CNN. “My advice to people whether they’re small business owners is take some risk off the table. If you were going to make a purchase, maybe slow down that purchase a little bit. Keep some dry powder on hand and wait a bit.”

What it Means for Manufacturers

This is especially sage advice for American manufacturers, but it’s also a difficult pill to swallow. On top of the emerging effects of the recession, manufacturers were already battling the rising cost of goods and a shrinking labor pool. Telling these manufacturers to slow their spending is akin to telling those in poverty who cannot afford gasoline to “go buy a Tesla.” Some advice is simply out of reach.

So how do manufacturers mitigate risk and boost productivity while also preserving their capital?

An Alternative Solution to Buying and Taking On Risk

Manufacturers do have a way of improving their capacity and reducing operational expenses without any capital outlay - it’s called “Robotics-as-a-Service” (RaaS). Instead of the traditional upfront investment and lopsided risk that comes with buying expensive automation, RaaS turns that upside down. 

With this “pay-as-you-go” model, manufacturers only pay a flat hourly rate when they use the system. Not only does this preserve capital, aligning to a desired recession-proof budget, it also reduces the risk of investing in equipment that might not be needed in three years. RaaS is the perfect option for manufacturers who want to do more but feel that their hands are tied, which is nearly everyone in this economic downturn.

Introducing Formic’s Zero Capital Approach

With our 300+ years of combined experience in automation and manufacturing, Formic is pioneering the RaaS offering for manufacturers to maximize their bottom line. In addition to the zero capital financing benefits, we take the solution to another level by providing productivity guarantees and optimization.  

 With Formic, we take full responsibility for the system and its success by providing a contractual system performance guarantee, system uptime tools and monitoring, unlimited maintenance and spare parts, and unmatched flexibility to adapt automation as your business changes. We handle all the barriers, overhead, and risk - you only pay a low hourly rate for your automated output.  

 Take that next step to evolve your factory today with pay-for-productivity robots that are guaranteed to work. Get your free consultation today!