On the surface it seems like large capital expenditure, however, the reality is that whether it be forklifts, access equipment, cranes or associated equipment, the cost has never been lower than it is now and the technology and features have never been better.
Everything from telemetry, to managing the health and ongoing cost of your assets, to safety and improved comfort, functionality and overall performance - the advancements rival that of the automotive industry! All of this, combined with very low finance rates and a steady market demand, suggests that investing in these assets now makes good business sense. However, rental rates are never guaranteed and there is always someone willing to rent it out at cheaper-than-average rates, within your market. Here are three tips that may assist when investing in your fleet:
1. SHOP AROUND
This may seem obvious, but many rental companies are ‘brand loyal’ and this can mean they’re not only paying more but also missing out on key items such as longer service frequencies, extended warranties, or features such as telemetry. If you take the time to test your preferred brand against the market, you could gain some additional benefits, features or price points while remaining loyal to your preferred brand.
2. ENSURE YOU HAVE A GOOD ASSET MANAGEMENT SYSTEM
One of the largest investments for any business is the operating system. It is the reliability and capabilities of the operating system that will play a critical role in understanding, managing and ensuring the return on your assets. You must be able to manage the financial aspects of the equipment, utilisation, selling rates and overall profitability, while also effectively managing the running costs in order to maximise your return. The system should bring asset management into the rental hub (rental dockets, transport, mobility, etc.) and seamlessly link all the data. At a glance, you should be able to view profitability by individual asset and your system should be your trusted ally in determining future purchases. Exploring rental mobility functionality is a must in today’s market, and this should form an integral part of your operating system.
The time is now to broaden your funding options beyond the traditional banks. While interest rates are at an all-time low, this is not always reflected in the offerings given to businesses looking to fund capital expenditure. The rates, term and end financial position are all key considerations that can vary depending on what funding model your business adopts. Being diligent and testing the market, challenging the rates and looking outside the banks will better position your return for the life of the asset, as well as return on disposal at life-end.
By Andrew Satterley, Global CEO
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About Baseplan Software:
Baseplan Software Group, established in 1986, is a privately owned company developing world-leading business ERP solutions. Today, Baseplan is an acknowledged market leader with our Baseplan Enterprise system offering feature-rich, specialised software in one fully-integrated management package that delivers outstanding return on investment.