Bucket Truck Blues
We’re going to talk a bit today about spending money. And with the price of bucket trucks these days, we’re going to be talking about a lot of money…
First, let’s take into consideration the size of the sign businesses out there: companies with just one or two employees that sub out heavy and high-up installations; then large enough sign companies that do the vast majority of the work in-house; finally, giant companies that eclipse the local guys and handle nationwide clients. I consider Media 1/Wrap This to be a medium-sized company; we do almost everything in-house and subcontract very little.
As a result, we don’t necessarily target nationwide companies. Of course, we do have national, even worldwide clients, but instead of focusing on the volume of signs produced, we concentrate on client relationships and building a brand that is known for stellar service. This prepares us to accept new clients at a rate that grows us, but doesn’t sink us in multiple, large-scale projects spread all over the country.
I say all this because we are not one of those giant companies and we don’t have a fleet of 80-ft. Elliot crane and bucket trucks at our disposal. What we do have is one, 2001, 45-ft. International 4100 bucket truck that we paid cash for six years ago. It has a one-person bucket and controls that work – most of the time. At that size, we can’t install very large signs with it, but it works for our local jobs, no problem.
GET OUTTA TOWN
Now, as we grow, we’re running into a problem: more and more projects that require either a larger truck, or jobs that are pretty damn far away from our home base of Orlando, FL. This forces us into another category – renting scissor lifts, snorkels or crane trucks on a weekly basis to handle these projects. But when does it become obvious that it’s time to purchase a new installation vehicle?
Well, we have several clients scattered across the state. Because most of their sign packages are similar to each other, we pretty much know what we are going to need at each job site and figure the price of the lifts into the project cost. We either bury the rental fee in the cost of the sign, or we leave it as a line item on the contract, so clients know what they are paying for. I assume a lot of you do the same. But the latter process leaves a couple things on the table.
1) The client knows you are charging them extra for the lift rental (and thus they think your company is not equipped with the correct machinery), or
2) You run over the estimated rental time. How many installs take longer than you figure into the price? In other words, a seven-day snorkel lift rental for $2,000 may actually take eight days, kicking you into a $4,500/month rental! Then you’ve got $2,500 in additional costs just bleeding out your profit.
So, when is it time to buy a new truck? For Media 1, that time is now.
Three weeks ago, one of our teams left for a job in Tallahassee (a four-hour drive) for our biggest client. Thankfully, they finished the job, but on the Sunday drive back, the truck broke down, stranding three employees on the road, all on overtime.
Fast-forward to the present and here’s how it all panned out:
• Uber charge to drive the employees to a rental car facility: $150
• One-way rental car back to Orlando: $200
• Towing of bucket truck to mechanic’s shop: $1,500
• Repair to truck: $1,700
• Truck breaks down again on the way back to shop. Costs $950 to bring it back to Media 1.
• Additional repairs: $1,000
• Total direct costs: $5,500
However, that total does not take into consideration the non-direct costs:
• Three employees, eight hours, Sunday O/T: $700
• Employee costs to go retrieve truck, three hours away: $250
• $6,000 in rental lift charges for three jobs over the next three weeks while truck was in the shop
• All the hassle for my partners, office administration and me (priceless)
• The trust of my employees who have to drive that truck the next time
And think about the damage we could have done to our biggest client had we broken down on the way to the job site!
So in three measly weeks, we’ve got over $12k tied up in fixing a 17-year-old truck that has no guarantee of continued reliability. And we all know that an install truck is the lifeline of a sign business. Suddenly, that $2,800 payment on a shiny-new, $150k, two-person-platform bucket truck is looking like the smart-money move for Media 1. Would you agree?
Whether you rent or own, a working, reliable bucket truck is a must.
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