It is not difficult to learn how to start a forklift rental business. If you want to turn your entrepreneurial passion into a home-based rental business, you’ve come to the correct spot. The best benefit of beginning a forklift rental business is that, aside from customer phone calls and forklift delivery and pickups, you don’t have to be around all of the time to manage it. In addition, the initial expenditure required to start a forklift rental business is very minimal. This step-by-step guide will help you discover more about this business venture and decide if it’s the perfect next step for you as an entrepreneur.
1. Familiarize yourself with the Forklift Rental Industry
Forklift rental firms cater to a specific clientele because forklifts are always in demand. Typically, forklift rental companies rent out a selection of forklifts. Transportation companies and other small logistic companies who do not want to spend a fortune on forklifts can rent them for a limited period of time. This service is ideal for someone who only requires a forklift for a couple of days. When you rent a forklift, it is delivered to the designated place and then returned at the conclusion of the rental time.
Companies don’t have to worry about spending money on a forklift, which they’ll just use for a short time. Forklift rental firms profit from regular rental fees on their forklifts, allowing them to profit from their one-time purchase and potentially scale their business by purchasing more forklifts in the future.
The majority of forklift rental companies serve commercial and industrial customers. Businesses and companies engaged in loading/unloading tractor-trailers, elevators, railway cars, or straight trucks are their traditional target market.
With so many applications, a forklift rental business can be quite profitable if you target the correct clientele. A forklift can definitely make life easier, and this company can help anyone who needs a forklift on a temporary basis. New and old forklifts are both quite inexpensive. As a result, starting a forklift rental business is an excellent choice if you want to get into the rental industry.
How much does it cost to buy a forklift?
A brand new electric forklift with the standard 5000 lbs capacity might cost anywhere from $30,000 to $40,000. Similarly, a gas-powered forklift with a similar load capacity will cost you between $35,000 to $50,000. If you want to start a forklift rental business, though, you’ll need at least a couple of electric and a couple of gas-powered forklifts, which would easily set you back roughly $150,000.
If you want to save some money, I would recommend buying used forklifts. This way you can easily save 30% – 40% on buying forklifts alone.
How much does it cost to start a forklift rental business?
A basic forklift rental business might be started for roughly $180,000. (assuming you buy brand new 2 electric and 2 gas forklifts with few replacement batteries). A $5,000 to $10,000 investment in marketing boost could help you get off to a terrific start.
However, if you want to operate on a larger scale and offer a number of forklift options, you’ll need to invest in at least 10 forklifts to begin, which costs roughly $350,000. As a result, starting a large-scale forklift rental business will cost you roughly $370,000 (forklifts plus marketing-related expenses).
Remember that if you want to save money, you may either buy secondhand/used forklifts or buy as you expand. Forklift rental is one of the best businesses to start and develop if you don’t mind a little hard work.
Is the forklift rental business profitable?
If you do your market research properly, a forklift rental business can be extremely profitable. The number of clients you find will determine the success of your forklift rental business. A single electric forklift will set you back $30,000. You can also rent the same forklift to other businesses for roughly $300 per day. That implies you’ll only need to find a forklift renter for 100 days to recoup your whole investment. After that, it’s all profit for you. Furthermore, unlike car rental companies, forklifts require comparatively little upkeep.
Is the forklift rental business worth it?
Starting a forklift rental business is definitely worthwhile. You might start your business by purchasing just one forklift. Furthermore, you may also start a forklift rental company by purchasing used forklifts. A single electric forklift of 5000lbs load capacity can earn between $250 and $300 each day. Furthermore, this business is incredibly scalable, and you can quickly develop it into a million-dollar rental business by reinvesting a portion of your profits.
2. Plan your Forklift Rental Business
The planning stage is crucial to every company’s success. The same may be said for the forklift rental industry. Let’s look at some of the main stages you’ll need to know when starting your forklift rental company.
Choose a name for your forklift rental business
You must choose a name that reflects your values and views, whether you want to start a forklift rental business or a utility trailer rental firm.
Keep in mind that the legal business name must adhere to state naming requirements in the states where you plan to operate your business; otherwise, the state may refuse to accept the documents filed to incorporate or qualify the company.
It’s also a good idea to discuss branding and how it will affect your firm before deciding on a business name. The important question is whether your legal business name will also be your brand name, or if your brand name will be separate from your legal name.
To be honest, when you initially start out, it’s best to utilize your legal business name as your brand name. Why? You’re welcome to inquire. This is because it simplifies things, is really straightforward, and is substantially less expensive.
Some states, however, require you to use your surname as the official name of your firm if you manage an informal business (sole proprietorship, limited liability partnership, or general partnership).
Would it bother you if your last name became your legal business name? You can move on to the next stage if the response is no. If your response is yes, though, please bear with me.
You must file a Fictitious Business Name Statement with the county where your forklift rental business’s head office is located if you do not want to use your surname as your legal business name.
When it comes to coming up with brandable names for your forklift rental business, Shopify’s Business Name Generator comes in handy. After you’ve decided on a name for your forklift rental company, make three last checks.
- First, check your State’s business name database to see if your desired business name is available.
- Second, do a domain name search to check if your business name is available as yourbusinessname.com. If it is available go ahead and register the domain before anyone else gets it. BlueHost offers domain names free of cost if your purchase a 1-year hosting package with them. You can use the tool below to see if the domain name is available.
- And lastly, do a federal search on the US Trademark Electronic Search System and make sure nobody has already trademarked your name.
If the name for your forklift rental business is available you can choose to trademark it, but honestly – don’t bother about it right now. It is a lengthy process and will cost you around $600. I would rather spend the money and time on the marketing channels.
Forklift rental business plan
At the absolute least, you’ll need a compelling business plan to launch a profitable forklift rental business. A well-written business plan should outline the company’s main goals and how it intends to accomplish them. A forklift rental business plan’s purpose is to make your company appear competent and appealing to potential lenders and investors.
A well-written and practical forklift rental business strategy is essential in general. You’d be rushing around like a headless chicken without it.
A compelling business plan has many sections, some of the must-includes are:
- Executive Summary
- Business Description
- Market Analysis
- Competitor Analysis
- Services and Products to Offer
- Competitive Pricing Strategy
- Marketing Strategy
- Financial Projections
To create a professional-looking business plan, you can utilize software like BizPlan and Enloop. But don’t be cheap and hire someone to develop a business plan for your forklift rental company for $5. Professional, high-quality work will be required.
3. Register your Forklift Rental Business
You must first register your forklift rental business in order to run it legally. However, before you register a forklift rental firm, you must first comprehend and choose a business structure. Because how you set up your forklift rental business will affect your taxes and legal obligations, you’ll want to make an informed decision.
Take a look at one of the most common business structures:
This form of unincorporated business is owned by a single person or a married couple. Your business will be exempt from registration, and your taxes will be reported on your personal tax return.
In terms of registration and taxes, an unincorporated business with numerous owners runs similarly to a sole proprietorship.
Limited liability company (LLC)
In the event that your company is sued, a registered corporation provides personal liability protection to all of its members. You have the option of taxing your business as a partnership or a corporation.
When it comes to forming an LLC, Incfile is one of the greatest options. Their prices start at $0 plus filing fees. These expenses are frequently tax deductible.
S-corporations and C-corporations are the two most frequent types of corporations. The type of corporation you incorporate will determine the taxes you pay.
4. Register for Taxes and Obtain an EIN
You must always observe the law as a personally liable business owner. That is, you must follow all applicable tax, licensing, and labor laws. In the long run, putting in the effort to learn about any legal laws that may apply to your forklift rental business might save you a lot of time, money, and frustration. What business taxes you must pay and how you must file will be determined by the business entity you choose, as well as other features of your forklift rental business. To make sure you’re on the correct track, speak with a tax specialist soon.
You’ll need an employer identification number if your forklift rental business employs others. This is also known as a business’s EIN or tax ID number. You may get your EIN for free from the IRS online and use it to file taxes for your forklift rental company. If you want to create a business bank account, get a company credit card, or apply for a business loan, you’ll need it. Obtaining an EIN has various other benefits, even if you do not intend to hire staff.
5. Get Funding for your Forklift Rental Business
Even if you have the best forklift rental business service in the world and can win the hearts of companies from miles away, if you don’t have enough money, your business will collapse. It may seem counterintuitive, but you must first have money in order to make money. There is no escaping the reality that buying a forklift is expensive. If they weren’t so expensive, everyone would purchase one, and the forklift rental industry would be obsolete. Not to mention paying exorbitant rent, marketing your service, and employing people with wages and benefits.
Forklift rental companies can take advantage of a variety of incentives, subsidies, loans, and equity investments. Regardless of the funding source you choose, you must have the following documents (at a minimum):
- A forklift Rental Business Plan
- Projected Financial Statements
- Tax returns of both the business owner and the business itself (when available)
- An explanatory document on how the money will be used
- A description of services offered by your forklift rental business
After you’ve done the number crunching and figured out how much money you’ll need for your forklift rental business, you may look into the following choices.
- Obtain funds through SBA-backed lenders (Wells Fargo, US Bank, MidFirst Bank, etc.)
- Get funding through Banks
- Obtain funds through P2P lenders (Prosper, Peerform, Lending Club, Funding Circle)
6. Promote your Forklift Rental Business
For some reason, most business owners do not include marketing in their business plans. This is most likely one of the most damaging errors you can make, and you should avoid it at all costs. Marketing and promotion may make or ruin a service-oriented firm like a forklift rental business. Additionally, if you do not have a huge amount of money to invest right away, you must grasp what it takes to promote a forklift rental business successfully. A robust marketing strategy and communication tactics are also required.
Let’s look at some old and current marketing tactics for promoting your forklift rental business.
Build a Website
This is something I cannot emphasize enough. In order to run a forklift rental business, you’ll need a website. There’s no getting around it. The world has gone digital, and your forklift rental firm must have a digital presence as well.
Make the most of the internet’s capabilities. You should also make your forklift rental website unique and consistent with your brand. You can include photos of your forklifts as well as testimonials to leave a lasting impression on your guests. Actions, after all, speak louder than words.
On your forklift rental website, don’t forget to include your mission statement. Additionally, explain why your visitors should rent from you. A website gives your forklift rental company a digital presence, allowing potential consumers to search for and find you online.
If you want to do it yourself, see my advice on how to create a simple website for your small business. We can assist you if you want someone else to handle the technical aspects of your forklift rental business while you focus on attracting new customers. A professionally designed website, custom email, 24/7 support and maintenance, SEO, and digital marketing services are included in our $499 digital package. You don’t want to lose out on this opportunity. Contact us right now before the offer expires.
Establish social media accounts
Establish social media accounts for your forklift rental company to give it a digital presence. You must be strategic in this regard, as you do not want to waste time by appearing on every social network, especially those that do not correspond to your target demographic.
You want your forklift rental business to be on, depending on the size of your operation:
Almost everyone nowadays uses social media to communicate with friends and family as well as make purchases. Getting your forklift rental business in front of your target market will result in more leads and money. It can also be used to keep current customers informed and attract new ones.
Run Paid Ads
Paid adverts allow you to target certain demographics and geographic areas, making them an effective marketing strategy for your forklift rental business. Use networks like Facebook Ads, Yelp, or Google AdWords for sponsored advertising. Sponsored promotions yield rapid results, helping you to expand both vertically and horizontally with your forklift rental business.