How to Start a Forklift Business
Forklifts are used in a wide array of industries, meaning that they're in constant demand. Learn how to start your own forklift business here.
Forklifts are expensive pieces of equipment, and there is a large demand for their use. This is why forklift hire businesses are extremely valuable to many industries. These include agriculture, manufacturing, construction and mining industries. So you have an interest in operating the machinery and want to start a business? Read our guide on how to start your own forklift business.
1. Set Up a Business Plan
As we all know, a strong business plan is essential in the setup of a successful business. A business plan outlines a company’s mission statement and objectives for the business. If done correctly, the plan should guide your business through the first year of operation and further. It provides a clear direction, plan and purpose for the business. A business plan can also assist in the execution of decision making and planning strategies.
2. Know Your Market
Understanding your market is key in starting a forklift business. Research should never be undermined. Look into your competitors and their offerings with regard to the kinds of forklifts and the rental prices.
Operating forklifts can be dangerous. This is why you will also need to look into business insurance. Public liability and product liability insurance will be required to cover any risks or injuries that may arise.
If you or your employees are operating the forklift, you will need to apply for a high risk work license. To be eligible for a license, you must complete a recognised training course with a registered training organisation (RTO). You also need to be assessed as competent by a SafeWork NSW assessor.
3. Set Up Your Business
So you have created your business plan and understand your market. Congratulations – now it is time to set up your business. You will first need to choose a business structure. This will have implications on your legal and tax liability. The structure you choose will affect your liability as a business owner. For example, being a sole trader means you’ll be liable for all business debts. Conversely, registering as a company will ensure that your business is a separate legal entity.
4. Source The Machinery
Now it’s time to source the forklifts. Be sure to research different models of forklifts as they vary in size and load capacity. Research your competitors most popular products and try to source these. Forklifts can be expensive, which is why you may need to consider different financing options such as leasing or a loan.
Sourcing machinery is likely going to be your biggest investment. Investigate whether there are second-hand options available. It is also important to ascertain whether your customers are after high-quality, expensive brands or budget-friendly options.
5. Create a Maintenance Plan
Just like a car needs regular services, forklifts require regular maintenance. As there is a large initial outlay in purchasing the machinery, it is paramount to ensure your inventory is taken care of. This is why establishing a maintenance plan is essential. If issues with the machinery arise, ensure repairs are prompt and thorough. This will reduce the risk of future problems arising. You may also look into cosmetic repairs. Customers will be more attracted to new and modern looking forklifts.
6. Acquire Customers
Customers are central to any business. Create an eye-catching website to attract potential customers to consider your business. Search Engine Optimisation (SEO) is a great tool you can use to improve your market exposure and increase website traffic. Alternatively, try to meet with executives or business owners in the industries you are hoping to enter. For instance, pitch your business to construction and manufacturing companies who utilise forklifts in their day to day operations.
Once you have acquired a customer, it is important to enter into an agreement. This agreement may be in the form of a lease agreement. It should outline the start and end date of the rental, any acceptable wear and tear, any penalties for late returns. The fee for repairing damaged forklifts should also be outlined as this can be very costly.
To conclude, starting a forklift business can be a challenging task. However, by following this guide you are well on your way to a successful business. We recommend consulting a business lawyer to ensure your business is set up correctly and you’re on the right track.
Laura is a Legal Intern at Lawpath. She is studying a Bachelor of Laws and a Bachelor of Business Administration at Macquarie University. Laura is interested in Intellectual Property Law and how technology can assist in improving access to justice.