When producing large-format items such as billboards, displays, and signage, many PSPs find it necessary to utilize cranes, bucket trucks, and other pieces of heavy equipment. At some point, it becomes wise for a company to purchase their own equipment to save time and money. Our experts give advice on making these purchases and how to decide when the time is right.
Right at the get-go, the first question a PSP needs to address is: “Do I need it?” Crane and bucket trucks, while essential to the sign and graphics industry, are also come with a pretty hefty price tag. It also depends on what type of work is it is used for.
According to Marcia Y. Kinter, Vice President - Government & Business Information at Specialty Graphic Imaging Association, there is another question that is important to consider. “When considering a purchase, the first question to ask is, ‘How will the purchase of the truck affect the company’s budget?’ Do you plan to purchase with cash or are you planning to finance? Many companies find out that they can put off taxes when leasing compared to up-front financing," she says.
“The type of unit that a customer would use depends on the work practice being performed. Cranes are typically associated with ‘sign construction,’ both installation and removal. A Man-lift Work Platform can also be used for ‘sign construction’ but also for 'sign maintenance," says Al Rocke, Altec Market Manager.
According to Jim Glazer, President/CEO of Elliott Equipment Company, sign companies have two options when it comes to crane and bucket trucks. “They can rent a vehicle on a daily, weekly, monthly, or annual basis, or they can invest in the purchase of a new or used piece of equipment," he said. "What are the advantages of purchasing equipment? They include increased flexibility in scheduling, lower costs over the life of the machine, and the ability to customize the unit, both in terms of optional equipment and storage and also graphically, as a mobile marketing piece."
“Before investing, you need to consider the lift capacity that you require for safely delivering the products," advises Kinter. "It is important to remember that when purchasing a utility truck, the amount you will have to pay for the vehicle rises with the increase of lift capacity. Keep in mind to factor in the costs of maintenance as well. It is recommended to purchase a boom configuration that will safely do the job that needs done, but that you do not buy too much capacity that is not needed."
Glazer offers some additional points to consider once a decision is made to purchase an aerial/crane truck. Be sure to review this list of six questions as your compare models and specs.
- Is the bucket truck or crane multi-functional enough to meet all of my needs?
- If purchasing used, has the equipment been tested and received an annual inspection?
- Will the truck offer me sufficient payload?
- Are there service providers in my area for the truck chassis and the bucket or crane?
- Does the price tag fit my budget?
- What is the overall cost of ownership of the investment? How will affect the company’s productivity and ability to get new work?
It's also important to chose your vendor partner wisely before signing on that dotted line. “Make your purchase from a well-established, reputable company with a lot of experience," says Kinter. "It is important to deal with a company that knows what they are doing. Finding a company in the industry that doesn’t just sell you a truck is very important. Using a company that goes the extra mile to be there to help you with all the pertinent and not so pertinent details is essential for making sure you are completely satisfied with your purchase.”
What to Buy?
So you know you need to buy a crane or bucket truck, but what kind of equipment do you need? There are multiple options to chose from and more than one might fit your current needs. But are you buying with only current needs in mind or are you looking toward future growth?
“PSPs that need to lift personnel or materials over 30 feet in the air and at multiple locations would benefit from a crane or aerial lift truck. This equipment is designed to safely lift personnel and/or materials to assist with the installation of signs, graphics, and lighting systems. PSP’s that are involved in outdoor sign activities ranging from hanging large print displays on building façades to the installation of channel letters and beyond, will all benefit from this type of equipment. While all types of outdoor sign installation and maintenance companies can use an aerial lift, PSP’s that perform the installation of structural signs will most benefit from having a crane capability to lift and place sign structures," says Glazer.
Pros and Cons
There are always pros and cons to every situation and purchasing and operating heavy equipment has its share of both. “Equipment is expensive, so having a piece of equipment idol for long periods of time is costly. However, equipment is an asset that if used properly, should provide a good return,” says Rocke.
“For this question, we will focus on the pros and cons of leasing versus buying the equipment. If you are installing graphics that require this type of equipment, it is a safer and more responsible decision to use the proper equipment than to attempt to install without it," says Kinter. She also offers these points for consideration as PSPs wrestle with the decision to lease or buy the equipment.
Buying Pros: Maintain control
- Low interest rates can make financing attractive.
- You own it, controlling how and when the equipment is used, sold, or traded.
- Brands with high resale value pay back more of their upfront costs when it’s time to sell or trade in.
- Depreciation, insurance, repairs, taxes and interest are deductible.
Buying Cons: Drain capital, risk obsolescence
- Buying often requires large down payments and higher monthly payments that reduce working capital.
- Purchasing transforms liquid assets into fixed assets, weakening your current ratio – the liquidity number showing your ability to pay obligations.
- You’re responsible for providing or contracting for storage, transportation, maintenance, and service. Hard use and minimal maintenance deplete trade-in value.
Leasing Pros: Stay current, free up capital
- Leasing arrangements also simplify planned equipment replacement cycles, so the progression is orderly and not dictated by sudden breakdowns and rising maintenance costs.
- Some lease arrangements offer flexible terms that allow skipped payments during slow months.
- By freeing capital, leasing doesn’t affect your borrowing power or credit line.
- Payments for operating leases, which require the return of the equipment at lease’s end, can be tax deductible as business expenses.
- Leasing requires less paperwork and administration.
- Renting can provide many of leasing’s advantages, plus flexibility in contract length, provided maintenance, and the commitment-free ability to test equipment.
Leasing Cons: Risk commitment
- Long-term leases can be difficult to break.
- You could be responsible for hefty insurance and personal property taxes, and for damage fees.
Glazer adds, “Investing in a new or used sign crane certainly has its pros and cons depending on the nature of the investment, the manufacturer, and how the equipment is treated. Having control over the quality of the finished product not only leads to a greater credibility for the company, but it also gives the PSP greater control over the total price. Furthermore, owning a sign crane gives the PSP the chance to do custom branding including special paint, vinyl decals, and more. The brand recognition alone is very valuable. Even though owning a bucket truck or crane will require maintenance investments on a daily, weekly and monthly basis, the overall pros certainly outweigh the cons. If the equipment is properly maintained, receives an annual inspection, and is used properly, it’ll last decades.”
“Cranes need to be able to lift required amounts of materials to appropriate heights,” says Rocke. “Aerial work platforms need to get one or two people into position to be able to perform the required tasks of installation or maintenance.”
Kinter adds, “Bucket trucks are operated hydraulically, so it is essential that you ensure that the system is in good working order before you finalize a transaction. Before deciding that a bucket truck is right for your situation, ensure the truck can be safely operated under all conditions you may use it for. There are several different types of bucket trucks, and before making a decision to purchase or lease, you need to carefully consider its uses.
For a PSP, Glazer recommends looking for the following features:
- Telescopic booms offer significantly more side reach than articulating booms, and faster setup time.
- Consider the vertical reach and the how far the unit will be parked from the structure being worked on. Remember the axiom, ‘you can never do an 80 foot job with a 50 foot lift. You can always do a 50 foot job with an 80 foot lift.”
- Make sure the aerial lift complies with all OSHA and ANSI safety requirements.
- Material handling features like a platform jib winch capable of lifting up to 1,000 lbs., and a main boom winch for sign installation work if needed.
- Options in the platform including a 110V outlet to the platform, a welder/generator, basket rotation and other accessories can make workers significantly more productive.
- Oversized steel work platforms which offer more space for tools and sign materials on the job.
- Toolbox and storage space.
- Truck GVWR and number of axles.
- Designs that offer easy maintenance.
- Consider the warranty and resale value.