A Framework for Decision-Making
By Eddy Kitchen, Principal and Co-Founder, Engineered Rigging
Choosing whether to rent rather than buy heavy lift and specialized transport equipment is a complex decision that rests on a company’s business case. Ultimately, the choice is different for every business, contractor, nonprofit or government agency. However, the major factor in decision-making is cost. In addition to a significant capital expenditure (CAPEX), there are several other factors that need to be factored into your decision to buy new equipment.
Will you have future needs for this equipment which will provide ROI in a reasonable time? Normally 1 to 3 years is a good return on investment in the heavy lift industry where equipment has an average 5-to-8-year lifespan. However, some technologies become obsolete in a shorter period of time.
Are you in a financial position to obtain the required loan? Normally banks require at least 20% down for an 80% loan to value ratio.
- Do you have assets and revenue to balance your current and future expenses and liabilities?
- Do you have the space to store this equipment when it is not in use?
- Do you have the ability to load and transport the equipment to and from jobsites?
- Do you have the necessary tools and equipment to service and maintain the equipment?
- Do you have the skilled personnel to operate and maintain the equipment? New, innovative equipment often requires more technical, highly paid employees.
- Are there new accounting, maintenance documentation or insurance requirements that might add to costs?
Why Rent Heavy Lift Equipment?
Once you’ve reviewed the questions above, it’s time to weigh the rental option. What are the benefits of renting heavy lift and specialized transport equipment? The answer is simple. Companies can eliminate all of the aforementioned costs and risks if they rent the specialty or heavy lifting solutions needed. Equipment rentals can be expensed to the job with costs passed along to the client. Consider these additional benefits of working with a rental company that can support everything associated with your equipment needs.
Improved Project Planning
- Project planning is easier when relying on heavy lifting experts to consider all the available equipment alternatives for project execution.
- Renting equipment from a company with in-house engineers can lead to more efficient heavy lifting and project plans.
- Having a rental agreement and project plan with specific equipment can reduce liability associated with contract scope uncertainty.
- Rental equipment should include an analysis of the pricing and all potential costs, which can help improve your profitability.
Best Equipment Delivered to Job
- Renting equipment provides access to the latest technology in the market, which can improve safety, efficiency and profitability.
- With rentals, you can expect well-maintained equipment that is ready to work when it arrives at the jobsite.
- Transportation for rentals can be handled by third parties to minimize the time associated with internal labor and risks.
Well-Trained Operators
- Established rental companies like Engineered Rigging offer experienced operators and qualified technicians onsite.
- Technical support is accessible during your rental period to answer questions related to setup and operation.
- Rental companies can train your site crew to operate the equipment if repetitive rentals are anticipated.
Competitive Advantage
- Heavy lift equipment rentals can provide growth opportunities and strategic regional advantages, which can complement your business model.
- Equipment rentals can free up capital for future investment opportunities without the risk and liability of a fleet purchase commitment.
- Rentals can simplify your accounting process by reducing tax considerations in depreciation, value and capital gains.
Renting heavy lift and specialized transport equipment can help expand your company’s capabilities, increase project revenue and improve cash flow. The benefits of renting outweigh the costs and risks of buying. To leverage these benefits on your next project, please contact our heavy lifting experts to discuss your specific needs.
