Business funding options – digital signage rental, lease or purchase?
So, now the project has been agreed for a new advertising campaign, the next stage is to consider the digital signage funding options; will it be digital signage rental, lease or purchase? For the everyday business, it is usually a matter of the most cost effective proposal, reports Digital Signage Systems Limited (http://digitalsignagesystemsltd.co.uk), but there are other points to take into account:
- How permanent will the sign be?
- From which budget will the funding come from?
- Where is the best location for the screen?
- How much money will the campaign generate – prediction forecast
- Can the digital signage be relocatable?
- Any upfront costs?
- Operational costs?
- Installation costs?
Digital signage funding depends on many factors, but it all comes down to costs.
Let’s look at digital signage rental.
Renting a digital sign is suitable for short term display, i.e. trade show, temporary exhibition or the current trend of a ‘pop-up’ store/restaurant. As the screen is being rented from the supplier, very little needs preparing, it would normally be supplied as a ready to go or ‘plug and play’ option. Depending on the locating will depend on how the electronic display is hung or its positioning. A floor standing plinth is usually included in the digital signage rental solution, as is additional power supply and cables. By renting a unit, there will be little return on the rental costs, as the time scale is usually for just a short period, like an expo, or demonstration. Don’t forget to budget for other ‘extras’ like shipping or delivery, installation (if you want someone else to have the responsibility of setting it up) and the content – mainly via a USB for the temporary solution.
Comparison between leasing and rental of digital signage hardware.
Then comparing digital signage rental v leasing; both mean the business does not own the digital signage outright, but only for the set time period. Leasing implies deploying the goods for a longer time; months or years. One advantage of this is that, apart from an insurance policy against accident or damage, there are no additional costs or large upfront sum. The financial arrangement for leasing is broken down over several months, so a regular amount is collected from the leaser. The supplier take responsibility for the continual working, engineer costs and replacement of failed parts, however these display monitors are very reliable, so downtime is minimal. Another option for leasing is having upgraded replacement units as part of the contract. This keeps the digital signage looking state-of-the-art and a distinguished vehicle from which to display your advertisement campaign.
For every day businesses, purchasing is an economical option, particularly if the screen is to be used on a regular basis and in a permanent location. Once the upfront costs of purchasing the screen and installation are completed and paid for, it is just a matter of running the electronic display for the optimum performance and calculating the revenue it has generated through sales, which in turn can lead to purchasing more screens. Off setting the cost of outright buying can be a tax advantage – check individual USA states, as energy efficient technology is looked upon favorably. The down side is the evolution of technology means that fairly quickly, the hardware will be superseded by a better application – do you carry on replacing and investing, however the screens are an asset to the business.
Tax advantages – making your money work harder!
In some situations, digital signage rental or leasing can be more cost effective than an outright purchase, the point is the hardware is not owned by the business and the ongoing lower digital signage rental/leasing costs can be off set against profits, reducing taxation costs, but you better check that out with your tax adviser.