As the New Year turns, businesses seek strategies to maximize their annual budget. One strategy gaining popularity is the rental of forklifts over their outright purchase. This approach offers financial benefits such as improved planning, increased budget flexibility, and increased access to capital and allows funds to be allocated to other critical asset needs. This article looks at the benefits of and how to optimize the use of forklift rental services and how your business can significantly increase its efficiency and productivity.
A New Year, A New Approach to Budget Management
As we enter a new year, it’s a great time to take a fresh look at your business’s budget management. Setting clear goals and aligning your budget with those objectives is key to financial success.
Some best practices for budget management this year include:
- Performing a detailed review of last year’s budget to see what worked and what didn’t.
- Involving department heads in the goal-setting, budgeting, and building flexibility to adapt to changing business conditions.
- Focus budgeting efforts around your most important business goals for the year. For example, if a priority is expanding manufacturing capabilities, ensure sufficient funds are allocated to equipment purchases and facility upgrades to support increased production.
Continuously monitoring performance versus budget targets throughout the year allows you to identify issues early and adjust to get back on track. As you allocate the budget to support priorities like new products, equipment, or additional staff, build contingency funds to allow flexibility in adapting to changing market conditions throughout the year.
The Cost Effectiveness of Renting Forklifts Rather Than Buying
With tight budgets, companies often debate between buying or renting forklifts. Rental provides compelling advantages from a cost perspective.
Key benefits include:
- No significant, upfront capital investment to purchase
- Flexibility to adjust the fleet size/composition as needs change
- Predictable costs over the rental term
In addition, rentals reduce risks associated with maintenance, repairs, and equipment downtime. Service and replacement units are part of the package. When evaluating cost-effectiveness, consider all factors—acquisition cost, maintenance, repairs, downtime risk, disposal value, and impact on cash flow. In most cases, forklift rental proves to be the smarter financial decision.
Are you interested in learning more about improving your budgeting by renting needed equipment? Explore Brennan’s forklift rental services to see how we can help your business make the most of its assets.
Understanding the Benefits of Forklift Rental Services
Renting forklifts can provide significant financial planning improvements for businesses in the new year. Compared to purchasing equipment, rental services allow more budgeting and spending flexibility. There are several critical advantages to leveraging a forklift rental services provider.
Improved Financial Planning for the Year
Forklift rentals mean no large upfront capital outlays. Rather than making a major one-time purchase, businesses can spread costs out over the short-term or long-term rental period. This assists with financial planning by converting a considerable capital expenditure into more predictable operating expenses.
In addition, renting provides financial protection against changing business conditions. Additional forklifts can easily be rented if a business expands operations partway through the year, necessitating more equipment. Conversely, the rental agreement can be adjusted to reduce costs if business slows down.
Lastly, rented equipment may qualify as a tax-deductible business expense. This can provide tax savings versus depreciating purchased assets over many years.
Increase Budget Flexibility
In line with better financial planning, forklift rentals introduce newfound budget flexibility. Forklifts can be quickly rented on daily, weekly, monthly, or longer-term contracts. This allows a business to align its material handling capabilities and costs with fluctuating operational needs.
For example, a business may experience surges in orders during the holiday season. Short-term forklift rentals allow them to meet demand spikes cost-effectively. Rentals can then be reduced once order volumes stabilize post-holidays.
Rental agreements can also be extended if business picks up part way through the year. This facilitates rapid adaptation without needing to overhaul budgets or equipment purchasing plans.
Allocating Funds to Other Critical Asset Needs
The funds saved by renting versus buying forklifts can be reallocated to other important business investments. With material handling capabilities covered through a rental provider, budgets can be directed where they are most needed.
For instance, a growing company may want to upgrade its aging IT infrastructure or software systems. The money saved from not purchasing new forklifts could help fund these technology investments.
Funds could also go towards adding production capacity, hiring more staff, developing new products, or other initiatives aligned with strategic growth plans for the year.
More Cash on Hand
Finally, opting for forklift rental services means more free cash flow. Without sinking significant capital into equipment purchases, businesses can preserve liquidity.
Extra cash flow provides a buffer for unforeseen events. If issues crop up, like supply chain disruptions or emergencies at a production facility, ample cash reserves help companies navigate challenges.
Overall, the upfront cost savings and avoidance of debt associated with rentals keep more cash free for planned investments and dealing with unexpected scenarios.
Making the Most Out of Forklift Rental Services
To optimize value, companies should strategically manage their rental operations. This includes appropriately estimating equipment needs, securing competitive quotes, monitoring asset usage, and maintaining open communication with providers.
Strategic Ways to Maximize Forklift Rental Services
- Analyze internal equipment demand and work volumes to size rental fleet needs accurately
- Solicit quotes from multiple vendors to get the best rates
- Select optimal rental term length based on expected equipment usage duration
- Track rental unit utilization to avoid over or under-fleet capacity
- Renegotiate contracts if equipment needs change substantially
- Communicate frequently with the rental provider on any service or maintenance issues
- Explore rent-to-own options on often-used forklifts to capture long-term savings
Taking a strategic approach ensures rental services deliver maximum value. This allows businesses to adapt material handling capabilities to evolving operational needs cost-effectively.
Turn to Brennan for Cost-Effective Forklift Rental Services
For over 60 years, Brennan Equipment Services has been the go-to source for forklifts throughout Indiana and Ohio. Whether you’re looking to purchase or take advantage of our cost-effective forklift rental services, we offer several types of forklifts made by the leading manufacturers to ensure you get the best equipment and value. Contact us today to discuss our rental options and how they can improve your budget in the new year.