Does Leasing a Sign Make Sense for Your Business?
When starting a new business, it is easy to spend hundreds of thousands on business research, equipment purchases, real estate or office space rental, hiring, marketing, website development, and so much more. This is a substantial amount of money to spend on basic business expenses to get you going, let alone having to put thought and funds into signage. If you find yourself in this position, it may be best for you to look into leasing rather than purchasing your signage up front – at least for now.
Here are several reasons why you may want to consider leasing your business signage:
- Low Start-Up Capital Available. Starting a new business venture takes a lot of capital. If you don’t have much left over to spend on signage, leasing is the way to go. Do your research and find a signage company that provides quality signage at a low monthly rate. And as you allocate low, fixed payments towards this signage, set aside a small percentage of your revenue towards owning signage in the near future. Buying signage can be your very first business investment after startup!
- Tax Benefits. Business owners can write off the cost of sign leasing as an operating expense for the business. You can also reduce Alternative Minimum Tax (AMT) tax liability by leasing. Although this may seem like a small write-off, it can add up as time passes. And any tax benefit is a good thing, right?
- Preserve Cash Flow. Leasing allows you to preserve cash flow for your business, so you’ll have funds for your other expenses. Need more inventory than expected? Not a problem. Bills were higher than expected? That’s okay. Any unexpected expenses won’t take as great of a hit if you’re able to preserve cash flow and create a financial cushion.
- Better Budgeting. A good budget with fixed expenses makes it much easier to financially forecast how your business is doing every quarter or year. When you find a signage leasing contact that allows for fixed payments each month, you can allocate that into your business’ monthly budget with confidence. And if you know you may need to end your signage leasing prematurely, be sure to budget for a buyout fee if that was stated in your lease.
You obviously know your business and its financial capabilities the best. And if the cost of buying the signage of your dreams is just too steep for now, find a great signage lease with a trusted company. Many sign leasing contracts can start at $10K and go upwards of $100K, depending on the number of years and signage under contract. This cost would be paid on a monthly basis, at the amount that is agreed upon in the terms of the lease.
Do your research and find a rate that allows you to have quality signage for your business while saving to buy your very own signage. Should you have a need for signage leasing with us, please contact ABC Signs with your needs. We’d be happy to walk you through our sign leasing service.