Hiring or Buying a Forklift: Which is more appropriate?

When it comes to getting a forklift, many business owners are usually in a dilemma between hiring and buying one. This is because for effective operations, you need a reliable forklift and brand new forklifts guarantee this. On the other hand, they are very expensive and will cost your business a fortune; money which could have been put into other value adding investments. Buying a used forklift also has its challenges because you can buy one and find that it has electrical or mechanical problems that will cost you a lot of money to fix. There is also the option of hiring which has its pros and cons. In this article, we are going to find out which is more appropriate between hiring and buying.

Image credit: Wikimedia
Image credit: Wikimedia

Business Needs

Before you make a decision on whether to buy or hire, you should evaluate the needs of your business. If you just going to use the forklift for a specific period of time then the best thing is to hire one. On the flip side, if you are going to use a forklift on a daily basis the best option is to buy one. But before you make a final decision to buy a forklift, you need to evaluate the return on investment of the project and other pending projects. If there are other urgent projects, it will be advisable that you hire one and plan for purchase later when the company is doing well financially. One of the benefits of hiring is that you get a forklift that is in excellent condition which translates to better and greater productivity. In addition, you release the funds to do other development projects.

Budgetary Limits

Apart from the business needs, another factor that you have to consider before making a decision to hire or buy is your business budgetary limits. As a business entity you must have a budget so that you can ensure smooth running of the business. Buying a forklift is capital expenditure while hiring one on a regular basis will be recurrent expenditure. If your main business revolves around the use of forklift then it will be better to buy a brand new forklift if it is within your budgetary limits as compared to hiring one. This is because buying a forklift will just be a one off cash outlay and the forklift will serve you for years. On the hindsight, renting out will require frequent cash outlay which can be expensive in the long run. If your company has plans of buying a forklift, it should facilitate its purchase the earlier the better.

Future Prospects

The vision, mission and goals of the company also have an integral role in the decision process. If the business wants to expand its operations in another line of operations then at the moment they should just rent the forklift to avoid incurring huge expenses only to resell it after a few years. Apart from the hiring money that you pay, you do not care about servicing or maintenance costs because the owners take care of this. However, if you want to grow your business in the same line of operation, buying a forklift will be a wiser decision. It is a tough decision but looking at it from the financial angle it is the best option. In addition, a brand new forklift will enable your company to increase productivity which will mean more value for your investments in the long run.

You need to carefully analyze the options and make a sound and comprehensive decision based on your business needs. This because there pros and cons of each option and therefore you need to do a cost benefit analysis depending on your unique business needs. Remember, hiring a forklift will only be a short term solution to your business needs and not a long term solution. A good and reliable forklift means more productivity and more profits for your business venture. The onus is on you to evaluate what works best for you and make an informed choice. It should be a decision that will be efficient and cost effective not only in the short run but also in the long run.

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Garima is the founder of LoveTheTips.com, a UK based blog offering most useful tips on the topics you love to know more about. She enjoys travelling, blogging and spending time with her 6 year old daughter.

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