This last week I was looking at the outgoings of the business each month and was shocked to see the forklift costing R13K ($800). This is utter madness considering we started at around R7K and has nearly doubled in price for a rental. The truth is even R7K is expensive and really is just a hassle free service so you go with the deal. When you double this number it makes no logical financial sense as one can use the rental money and pay one off within 6-8 months.
If I had to place a value on the current fork lift I would say it is worth R50K and no more as it needs some serious work done to it. The current owner keeps on welding the frame for the forks when they should be replaced. His business model is actually very good as he buys cheap second hand ones on the market and rents them out covering his spend in less than 6 months. This company has a monopoly on the market and everyone knows this company and uses them. They start out fairly reasonable, but soon the annual increases do not make it viable anymore and you wonder just how many companies are not paying attention.
The above forklift is just an example of a similar one I am looking at which would cost 50% less than what I am currently renting and I would own it. This would come with a service plan so also this is a hassle free option so why would you consider renting especially if it was long term.
I owned my own forklift back in 2020 and sold it when lockdowns started as we shut down that warehouse used for the packaging business. The regret is I should have kept it or rented it out returning my investment whilst waiting on the next project. I would have made a good 1000% over the last 5 years alone and still owned the forklift. I had no idea how lucrative the rental forklift market is and only finding out now.
Tomorrow morning I am having a coffee meeting with someone showing me 3 different forklifts that can be negotiated on whether it will be to purchase outright, a rent to buy or just a rental. All of these options will still work out cheaper than what is currently being spent monthly and this is the main objective.
I hate wasting any money as it affects the bottom line and why it is so important to be on top of your numbers. When you have the responsibility of staff which includes your family you need to know where the money is going and is this value for money or can you do better. In this case I know for a fact we are being screwed over and need to rectify this quickly. I will be handing in notice this month for our current rental so we have 4 weeks to find a replacement and why I need to get this done and finalized within the next week.