tool hire business plan

How to Start a Tool Rental Business

A tool rental business offers construction and carpentry tools for both professionals and homeowners. Tool rentals often cover large or expensive tools which individuals will use infrequently or are too expensive to buy outright.

Ready to turn your business idea into a reality? We recommend forming an LLC as it is the most affordable way to protect your personal assets. You can do this yourself or with our trusted partner for a small fee. Northwest ($29 + State Fees) DIY: How to Start an LLC

Start a tool rental business by following these 10 steps:

• Plan your Tool Rental Business
• Form your Tool Rental Business into a Legal Entity
• Register your Tool Rental Business for Taxes
• Open a Business Bank Account & Credit Card
• Set up Accounting for your Tool Rental Business
• Get the Necessary Permits & Licenses for your Tool Rental Business
• Get Tool Rental Business Insurance
• Define your Tool Rental Business Brand
• Create your Tool Rental Business Website
• Set up your Business Phone System

We have put together this simple guide to starting your tool rental business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

Exploring your options? Check out other small business ideas .

STEP 1: Plan your business

A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:

What will you name your business?

• What are the startup and ongoing costs?
• Who is your target market?

How much can you charge customers?

Luckily we have done a lot of this research for you.

Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Tool Rental Business Name Generator

If you operate a sole proprietorship , you might want to operate under a business name other than your own name. Visit our DBA guide to learn more.

When registering a business name , we recommend researching your business name by checking:

• Your state's business records
• Federal and state trademark records
• Social media platforms
• Web domain availability .

It's very important to secure your domain name before someone else does.

Find a Domain Now

Powered by godaddy.com, what are the costs involved in opening a tool rental business.

Costs for opening a tool rental business will be focused on the tools themselves, as this is your store’s commodity. Invest in quality tools, as inexpensive tools don’t often stand the test of time. It will be more costly to replace lower quality numerous times, as opposed to a one time purchase of a more durable option. You may also want to focus on tool which are the most likely to be rented, to start. Then, add additional items, as your budget allows for them. You will also need to rent or buy a brick and mortar location as your shop and storage facility. Choose a location which makes sense for potential renters.

Next, you must budget for a business license and business insurance. Then, invest in a lawyer to help you create the customer contracts for tool rentals. You need documents in place which protect your business from tools not being returned, returned damaged, customer injuries and other issues which may occur. It can be helpful to have legal assistance for the entire business venture start-up, as you are giving the public access to numerous tools which can cause bodily harm or will be damaged through misuse. Make sure the customer understands the responsibilities they incur during rentals and you have the paperwork to back it up!

What are the ongoing expenses for a tool rental business?

Most ongoing expenses for a tool rental business will revolve around the maintenance and servicing of tools. Some of this can occur in-house, if you are mechanically inclined. Other expenses will be tool replacements and upgrades and expanding your tool rental options. You will also have the rental and utilities expenses for your shop.

Who is the target market?

Your target market will primarily be contractors and commercial and residential workers. These working people rely on quality tools to get the job done and bring home a paycheck. This makes your business an integral part of that process for them. They often need you as much as you need them. Having what they need will keep them coming back.

The second tier of customers are your residential customers who are looking to complete a job around the house, but don’t have the equipment on hand to get it done, They will be less frequent, but still make up a decent portion of your overall customer base.

How does a tool rental business make money?

A tool rental business makes its money from the rental of tools by customers. Some tool rental businesses also offer supplies to go with the tools being rented, such as nails, screws, cement bags, and welding rods. These materials can add more to your bottom line and overall revenue stream.

Rental costs will somewhat be dictated by those of your competitors. If you find yourself in a location without competition, refer to a national average for pricing your rentals. You want to be fair in price, not undercutting your competition, and offer easy to understand pricing and contracts for rentals.

How much profit can a tool rental business make?

Profit will depend on your location and what tools you offer, but tool rental companies have been doing well recently, overall. Annual profits for a tool rental business can range between $35,000-50,000.

How can you make your business more profitable?

Some tool rental companies have looked into teaching how to classes for the public on the weekends. These seminars allow for novice users to understand how certain tool factor into projects and give the customers more confidence to attempt projects and, in turn, rent your tools.

Want a more guided approach? Access TRUiC's free Small Business Startup Guide - a step-by-step course for turning your business idea into reality. Get started today!

STEP 2: Form a legal entity

One crucial aspect that cannot be overlooked when starting your tool rental business is the importance of establishing a solid business foundation. While sole proprietorships and partnerships are the most common entity types for small businesses, they're a far less stable and advantageous option than LLCs.

This is because unincorporated business structures (i.e., sole proprietorships and partnerships) expose you as an owner to personal liability for your business's debts and legal actions, while LLCs protect you by keeping your personal assets separate from your business's liabilities.

In practice, this means that if your tool rental business were to face a lawsuit or incur any debts, your savings, home, and other personal assets could not be used to cover these costs. On top of this, forming your business as an LLC also helps it to appear more legitimate and trustworthy.

More than 84% of our readers opt to collaborate with a professional LLC formation service to kickstart their venture. We've negotiated a tailored discount for our readers, bringing the total down to just $29.

Form Your LLC Now

Note: If you're interested in more information before getting started, we recommend having a look at our state-specific How to Start an LLC guide (DIY) or our in-depth Best LLC Services review (for those opting for a professional service).

STEP 3: Register for taxes

You will need to register for a variety of state and federal taxes before you can open for business.

In order to register for taxes you will need to apply for an EIN. It's really easy and free!

You can acquire your EIN through the IRS website . If you would like to learn more about EINs, read our article, What is an EIN?

There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.

STEP 4: Open a business bank account & credit card

Using dedicated business banking and credit accounts is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil .

Open a business bank account

Besides being a requirement when applying for business loans, opening a business bank account:

• Separates your personal assets from your company's assets, which is necessary for personal asset protection.
• Makes accounting and tax filing easier.

Recommended: Read our Best Banks for Small Business review to find the best national bank or credit union.

Get a business credit card

Getting a business credit card helps you:

• Separate personal and business expenses by putting your business' expenses all in one place.
• Build your company's credit history , which can be useful to raise money later on.

Recommended: Apply for an easy approval business credit card from BILL and build your business credit quickly.

STEP 5: Set up business accounting

Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.

Make LLC accounting easy with our LLC Expenses Cheat Sheet.

STEP 6: Obtain necessary permits and licenses

Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.

State & Local Business Licensing Requirements

Certain state permits and licenses may be needed to operate a Tool Rental Business. Learn more about licensing requirements in your state by visiting  SBA’s reference to state licenses and permits .

Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses .

STEP 7: Get business insurance

Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.

There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance . This is the most common coverage that small businesses need, so it’s a great place to start for your business.

Another notable insurance policy that many businesses need is Workers’ Compensation Insurance . If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.

FInd out what types of insurance your Tool Rental Business needs and how much it will cost you by reading our guide Business Insurance for Tool Rental Business.

STEP 8: Define your brand

Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.

If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners , we'll give you helpful tips and advice for creating the best unique logo for your business.

Recommended : Get a logo using Truic's free logo Generator no email or sign up required, or use a Premium Logo Maker .

If you already have a logo, you can also add it to a QR code with our Free QR Code Generator . Choose from 13 QR code types to create a code for your business cards and publications, or to help spread awareness for your new website.

How to promote & market a tool rental business

As mentioned above, advertising and marketing is quite important to your business’ success. Business cards, flyers, and banners are all worthwhile expenses for your company’s marketing strategy. Simply making your name and logo visible will help direct more customers to your door. Then, it’s up to you to retain them with top quality equipment and customer service.

Use of social media is also worth the work, as it is often a free option to generate more customer knowledge of your services. Look for groups and organizations who have forums or online communities, in which you can become a known commenter or add your own blog content.

How to keep customers coming back

Return customers come back because they had a favorable experience and are comfortable or somewhat trusting of you, as a business owner. Personal relationships with your customers are important and show that you’re paying attention, care about the customers, and want their business again. And, when you are seeing return customers, offer them incentives for returning. Deals on rental equipment or time rented can do quite a bit to influence customers to return. Even as much as asking about the progress or end results of a job can indicate to a customer that they’re not just another number.

STEP 9: Create your business website

After defining your brand and creating your logo the next step is to create a website for your business .

While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.

Here are the main reasons why you shouldn’t delay building your website:

• All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
• Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
• Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.

Recommended : Get started today using our recommended website builder or check out our review of the Best Website Builders .

Other popular website builders are: WordPress , WIX , Weebly , Squarespace , and Shopify .

STEP 10: Set up your business phone system

Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.

There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use. Check out our review of the Best Business Phone Systems 2023 to find the best phone service for your small business.

Recommended Business Phone Service: Phone.com

Phone.com is our top choice for small business phone numbers because of all the features it offers for small businesses and it's fair pricing.

Is this Business Right For You?

Those with experience in construction, commercial, and residential contractor work or are familiar, as a retailer, with the various tools needed to complete jobs will find a niche in this market. Knowing the right tool and its application is also critical for success in this business venture. It is also extremely helpful to have knowledge or experience in running a small business. Small business financials and personnel management are critical to running a successful small business.

Want to know if you are cut out to be an entrepreneur?

Take our Entrepreneurship Quiz to find out!

Entrepreneurship Quiz

What happens during a typical day at a tool rental business?

Day to day activities for a tool rental business revolve around interactions with customers. You should be personable to the customers and knowledgeable about what tools you offer. Make sure you vet the potential customers as to what they want to accomplish with the tools they’re renting. This will help you and the customer build a strong relationship, and you can steer them towards the right tool for the job. It also insures your tools aren’t damaged or destroyed from misuse or usage in the wrong application, saving you and the customer both time and money.

Other day to day activities will include:

• rentals and returns of tools
• processing customer invoices
• maintenance on rental tool stock
• shop maintenance and re-stocking of office materials and tool accessories, such as nails, sandpaper discs, and floor polishes
• Advertising, marketing, and social media interactions

What are some skills and experiences that will help you build a successful tool rental business?

Running a successful tool rental business is as much about knowing your tools as it is about knowing how to run a small business. Your knowledge of the tools will be helpful, but often the tools will rent themselves, as most customers understand what they need before they get to your store. Still, being able to talk to customers and offer guidance and advice are important skills. Small business finances and managerial operations will be what makes your business money overall, though. Make sure you have a business plan in place, which you are adhering to, proper rental agreement paperwork for you and the customer’s benefit, and a business license and insurance to cover all intangibles which might arise.

What is the growth potential for a tool rental business?

Tool rental businesses are quite popular and, with the increase in building in the last few years, are a great opportunity for a successful business. When properly managed, tool rental businesses should flourish, and there is often room for expansion, once the initial business is established.

TRUiC's YouTube Channel

For fun informative videos about starting a business visit the TRUiC YouTube Channel or subscribe to view later.

Take the Next Step

Find a business mentor.

One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.

Having a support network in place to turn to during tough times is a major factor of success for new business owners.

Learn from other business owners

Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.

Resources to Help Women in Business

There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:

If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.

What are some insider tips for jump starting a tool rental business?

Tool rental businesses can be profitable and relatively simple to manage. Your main concern will be making sure you have enough customers to maintain profitability. Conduct extensive research for your area to determine the housing and construction markets and the likelihood you will also see residential weekend warriors coming through your doors, as well. Check out your competition and see what they’re doing right or wrong. Some businesses succeed or fail, simply because they didn’t understand their potential customer base.

You will need to spend a good amount of time and revenue on advertising, as well. You can use social medial and a website to boost your visibility for customers. These are relatively inexpensive options, especially for start-ups. However, you will also need signage to direct the customers not checking the internet and looking for a convenient tool rental option. Flyers, business cards, and banners all help spread the word. Also, advertise or partner with hardware and contractor stores. Many smaller retailers won’t have rental programs like their big box competitors, which gives both small business entities the option to profit off the shared customer experience.

Finally, look to connect and become familiar with building and contractor organizations, as well as local and regional homeowners associations. Becoming a trusted partner with these organizations can act as a funnel to your business. It also helps to spread your business name and reputation.

How and when to build a team

When first venturing into the tool rental business, you will not need many employees, if any. Other than servicing and maintenance of the equipment, there is the rental paperwork and exchanges of money for the rentals taking place. Therefore, much of the cleaning and maintenance can be done by you, on the off hours, to start. You will also be the one handling in store customer service and inquiries, as well as advertising and marketing. These tasks will become more laborious and time consuming, as your business expands, though. Adding an additional team member or two will be need, although likely 6 months to a year after first opening. When it’s time, look for individuals who are as comfortable holding a wrench as they are on a 10 key. Just like yourself, you need employees who can cover many different aspects of the job.

Useful Links

Real world examples.

• A1 Rental Ann Arbor, MI
• Sunbelt Rentals Ypsilanti, MI

Have a Question? Leave a Comment!

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Published on Aug 14, 2023

The ultimate guide to starting a tool rental business

13 min read

As consumer behavior shifts away from long-term ownership and storage of infrequently used products, the popularity of short-term rentals is on the rise. This presents a unique opportunity to establish an equipment rental company and become a vital part of a more convenient and sustainable economy.

If you're looking to start your own tool rental business, there are a few essential steps you need to take. These steps will set you on the path to success and ensure that you have a solid foundation for your business. So, let's dive in and explore the key considerations for starting a tool rental business.

Create a tool rental business plan

A successful tool rental business starts with a solid plan. This stage involves a lot of research. It's the perfect time to determine if your business idea is viable.

Putting together an equipment rental inventory is a costly undertaking. Writing out an entire business plan also serves as a document for investors if you need extra capital. It also helps you get to grips with the financial realities of running a tool rental business.

To create a comprehensive tool rental business plan, it is important to consider the following key areas.

Market research and competitor analysis

The tool and equipment rental industry is thriving on a global scale, with a valuation of approximately $187 billion and a compound annual growth rate (CAGR) of 6%. This growth can be attributed to the continuous flow of commercial and residential construction projects. However, another significant factor contributing to this growth is the increasing consumer trend towards renting goods, including tools.

While market data can provide valuable insights, it is important not to rush into starting a business without a thorough understanding of your local market, target audience, and competitors in the equipment rental industry.

Here are a few key areas you need to consider before you start your tool rental business.

Identify your target audience

There are two primary audiences that you can target for a tool rental company. They are:

Contractors and construction workers: A construction equipment rental business can thrive in areas with many building projects.

Homeowners and DIY hobbyists: Residential customers are another big target audience. Home remodeling is growing in popularity, so this market has a lot of promise.

Once you've figured out who you'll serve, you must think about the right tools to stock. You can start small with a minimum viable inventory. However, renting out standard tools that most homeowners and contractors already own is unlikely to work. Offering expensive specialist rental equipment, such as floor sanders, concrete mixers, pneumatic drills, and so on, will more likely serve a gap in the market. 

Perform a competitor analysis

Look at the other tool and equipment rental businesses in your area. Some of the things you need to know are:

What inventory do they carry?

What prices do they charge?

What are their strengths and weaknesses?

Understanding these businesses can help you find a gap in the market. Look for an angle, be it price, service, or the kind of equipment you offer. 

Think about your area and what your local market needs. You can find a way to bring value to contractors or homeowners.

Evaluate the seasonality

A tool rental business is less subject to seasonality than other rental equipment services. However, depending on your niche or local weather, you may experience ups and downs. For example, if you focus on gardening or landscaping tools, demand can fluctuate with warmer weather.

However, as long as buildings are being built and renovated, your equipment rental company should have customers.

Business planning

Once you've done a market analysis, it's time to see where your business fits into the grand scheme of things.

Define your value proposition

Your value proposition helps you stand out against other equipment rental companies.

Think about your target audience. What are their pain points? Some of the issues you can solve could be price, convenience, or the quality of options on offer. Find a way to offer a valuable service to edge out the competition.

Describe your business model

Think about your business model. The big question to ask here is how you plan to generate revenue. Renting tools is a good start, but you can also sell nails, screws, and anything else related to the equipment you rent, such as sandpaper for sand floorers, etc.

That's why equipment rental is an excellent value-added service for hardware stores, providing a solution-oriented way to improve the customer experience. Indeed, for specific customer segments, equipment rental can increase sales of building materials. And professionals will buy the most essential tools for themselves anyway. We see nothing but profit in this.

You'll also need a good pricing strategy. You can offer flat day rates for each item. However, you can also consider bundles for tools frequently used together. Finally, you can offer discounts when renting equipment for longer rental periods.

Project your finances

Finances are essential to figuring out if your equipment rental company will work. Startup costs can be fairly high if you want to build an inventory of items people need to rent, which is why you need to plan your finances in advance.

Here are a few expenses that you need to consider.

Purchasing the initial stock of rental equipment

Downpayment for the commercial space to store and rent your products

Commercial vehicle

A company website and inventory management software

Accountancy and legal services

Licenses and permits

Software and admin tools

Commercial vehicles for delivery and collection

Calculate these expenses. Inventory will be your most significant outgoing. However, you can start small with just a few tools and gradually expand. You'll need to offset these outgoings against your rental business income, so ensure the numbers increase.

Of course, there will be other ongoing expenses to think about, including:

Rent for your business premise

Utility bills

Phone and Internet contracts

Staff salaries

Business insurance

Tool maintenance and upkeep

Ongoing marketing spend

Credit card processing fees

Create a marketing plan

Once you understand your target audience, it's time to figure out how to reach them. A lot of this work will depend on the kinds of tools you want to rent. 

Take the time to build a solid go-to-market strategy. Consider both on and offline marketing. If you have contacts in the construction industry, it could be time to use them. Also, consider establishing a presence in local construction or DIY forums. Use your expertise to help and answer questions, and you can establish trust.

Establish a legal entity for your tool rental business

There is a bit of admin involved in setting up a tool rental company. Here are a few things to consider.

Choose a name for your business

Pick a name that helps your business stand out and clarifies what you offer. Check these names against other local tool rental companies. Ensure you can get the social media handles and website names you want too.

Form a business entity

You have a few options when you want to form a business entity. But choose carefully because each structure has both tax and legal consequences. It's best to consult a legal professional before diving in.

Here are the three main options.

Sole Proprietorship: You can set up a sole proprietorship with just a social security number. However, there are a few downsides to consider. For starters, you'll get taxed on your business and personal income. Additionally, you'll be liable for any losses and damages which could affect your personal assets.

Partnership: Setting up a partnership can work if you have a business partner. These entities are similar to sole proprietorships but carry the additional risk of being responsible for your partner's actions.

LLC (Limited Liability Company): LLCs are a little more complex to set up, but they have two significant advantages: Your assets are protected from damages and losses, and you can avail of pass-through taxation.

Register for taxes

How you register for taxes largely depends on your local laws and regulations. If you're based in the US, you can apply for an Employer Identification Number (EIN). From there, you can register for state and federal taxes. Don't skip this step, or you'll run into problems down the line.

Set up a business bank account

It's highly recommended that you use a business bank account. If you commingle personal funds, it's challenging to calculate taxes or know how your business is doing. It also invalidates the liability protection you'll get from forming an LLC.

Another reason why you need a business bank account is that it will help you build credit, access loans, and get a company credit card. Cashflow is the number one small business killer. These facilities will give you a great chance of survival.

Legal and regulatory considerations

Permits, licenses, and insurance policies are further considerations for starting a new rental business.

Permits and licenses

The permits and licenses you need depend on where you start your business. Check the rules for your location or speak to a legal professional.

Insurance coverage

Some of the insurance policies you should consider are the following:

General liability: Covers property damage and bodily harm caused by your equipment while it's being used.

Worker's compensation: Protects your employees against injuries on the job.

Commercial vehicle insurance: Protects your vehicle if an accident or breakdown occurs.

Property insurance: Protects your inventory and business premises against damages.

Rental contract and waiver policies

You'll also need to draw up some rental contracts and waivers. Using power tools and construction equipment carries an element of risk. So you need to protect yourself against injuries and property damages that might occur.

Some popular agreements for tool rental businesses include:

Indemnity agreements to protect against injuries and property damages or legal action that occur from using your tools

While wear and tear are to be expected, you need to protect your inventory against negligence and misuse while being rented.

Clauses in the rental agreement allow you to seek damages or prosecution if the customer does not return your inventory on time.

Inventory management

Rental inventory management is crucial to smoothing the equipment rental business operations. You need to know which tools you have in stock and where your inventory is at all times.

In addition to tracking equipment, solid inventory management software is essential to improve inventory turnover, which is one of the most important factors impacting the profitability of a tool rental business.

Here are some steps to ensure your business runs smoothly.

Sourcing tools and equipment

As mentioned earlier, buying tools and equipment will make up the bulk of your startup costs. It's best to buy quality tools that will last long enough to return a profit. So, pick a niche and crack that first. Then, you can add more equipment as you go.

Tips for maintaining and organizing inventory

You should schedule regular checks and routine maintenance for each tool to ensure they remain in top working condition. This includes checking for wear and tear, functionality, and any electrical or mechanical issues. Using an inventory management system or software to track your tool inventory and its usage is invaluable for monitoring maintenance schedules and identifying patterns in tool rentals.

Moreover, you should develop an organized storage system that allows you to locate and access tools, streamlining the rental process. Cleanliness and tidiness are about improving operational efficiency and ensuring safety on the job site.

By emphasizing inventory management, you can offer a consistent and dependable service to your clients while minimizing downtime and maximizing the usage and lifespan of your tools. In the tool rental business, that's money.

Marketing and customer acquisition

Marketing and customer acquisition have never been more important or competitive. Here are some key areas to consider.

Identifying your target market

You should identify your target market during your business plan. But figuring out how to reach that audience is a job for marketing. So think about the places where you'll find your market. Social media platforms are great for finding and connecting with the right people. Many of these platforms offer cost-effective targeted ads too.

If you have a physical premise, focus on local SEO . In today's digital age, search engines have become the go-to source for information. Companies that rank high on relevant search results have a significant advantage over those that don't. This is because they are more visible and accessible to potential customers. So, if you want your tool rental business to thrive, it's crucial to optimize your online presence and ensure that you appear at the top of search engine results.

Build a memorable brand for your business

Think about your target audience. Consider what they need from a tool rental business. Things like reliability will be high on the list. Other things might be value for money, excellent customer service, or access to the best tools on the market.

Make these values the cornerstone of your brand, and you're on track to building a loyal customer base .

Effective marketing strategies for a tool rental business

Breaking into the equipment rental industry requires a digital marketing strategy. Having a visible premise and relying on word of mouth are still good ideas, but you need an online presence.

Set up accounts on LinkedIn, Facebook, Instagram, and other relevant channels. Pay for PPC ads while you get your business off the ground. Build an email list and encourage (or incentivize) customers to leave reviews.

Content marketing is another good idea. While professional contractors will be adept at DIY jobs, you can court the home DIY crowd with educational blogs and videos teaching them how to use your rent tools. Video is growing in popularity all the time. It can be a great way to attract potential customers.

The role of a website and online user experience in driving sales

A professional-looking website will do wonders for instilling confidence and trust. Ensure your prices and availability are clear and include good descriptions and detailed photographs of your inventory. An online booking portal is essential too.

Read this article for helpful tips for setting up a rental website.

Operations and customer service

Breaking into the tool rental industry requires excellent service and a smooth and reliable business operation. 

Here are some tips that you can use.

Managing daily operations

Your day-to-day business operations will be less intense than other businesses. However, that's not to say it will be a walk in the park. You need solid processes for checking tools in and out. Moreover, you must ensure your inventory is functioning well and consistently maintained. Scheduling regular maintenance checks is essential.

Delivering excellent customer service

Excellent customer service is the best way to build trust and loyalty. It also helps you get online reviews, which are essential for growing your reputation.

Strive for the most responsive and attentive customer service possible. Treat your customers with compassion and kindness, and you'll build a positive reputation.

Growth and expansion

How much business you generate depends on various factors, such as your local market. Here are a few ways to measure your business and improve financial performance.

Key Performance Indicators to monitor

Aside from typical business KPIs like customer acquisition costs (CAC) and monthly recurring revenue (MRR), there are several rental industry-specific KPIs you should track. Here are some of the most important.

Time utilization rate: You can calculate the time utilization rate by taking the number of days in a month or year each piece of inventory can be rented and dividing it by the number of days it is out for rent. These figures help you track which stock is profitable and can influence scaling up or back parts of your inventory.

Time utilization rate = days rented/days available

Capital utilization rate: The capital utilization rate helps you track the profitability of each item. You can work it out over the month or year. Calculate the capital utilization rate by dividing revenue by the cost of the tool.

Capital utilization rate = revenue generated/tool cost

Average rental rate: Rental rates help you track the average rental rate of each item.

Rental rate = total rental revenue/number of rentals

Inventory rental ratio: This KPI helps you track how much of your inventory is being used and how much is sitting idle. Ideally, you want this number to be as close to 100% as possible.

Inventory rental ratio = # of rented items / total # of rented items

Strategies for growing your business

While revenue from tools and equipment rentals will be your primary source of income, there are several additional areas you can consider to grow your business. For example, you can expand into offering landscaping tools or even furniture and other services.

Offering collections and deliveries can add logistical complexities. However, this service could help you stand out and attract more business.

Potential challenges and how to overcome them

There are a few challenges that you might face when running a tool rental business. However, here are some tips to help you power through the problems.

New technology: Tool technology is improving all the time. You'll need to keep your tools current to attract potential customers.

Inventory tracking: Some people like to borrow tools but not drop them back. As mentioned above, you need solid rental policies and a way to capture security deposits to protect your investments.

Stiff competition: You'll need to compete against some pretty big-name brands. However, offering personalized service and serving particular niches can help you compete.

The equipment rental industry is growing. Remodeling and DIY are increasing in popularity, but many homeowners don't have the power tools and equipment for the job. That's where you come in. When you add the demand from professional contracts looking for tool rentals, there is enough demand to make a good income.

Of course, you'll have a lot of competition. Some big hardware stores offer equipment rental, but you can beat them with excellent service. You'll also need a good amount of initial capital to get started. So start small and pick a niche while your business grows.

Buy durable, high-quality tools and maintain them well, and you can make good annual revenue. Gross margins can be as much as 90% for some tools, so there is money to be made with the right strategy.

Make anything rentable in just a few clicks.

Article written by Akseli L.

A marketer who gets excited about all things e-commerce. Outside of office hours, you'll most likely find Akseli from the countryside, hiking and shooting landscapes.

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The equipment rental industry is expected to reach USD 58.49 billion by 2029, up from USD 42.64 billion in 2022. The constant industry growth means it is ripe for investment. Creating a robust plan can help you start your business in this industry today. 

If you are looking to start your own equipment rental business, there are numerous aspects to consider before you jump in. From finding the right niche to targeting the right audience, and from buying the right equipment to marketing it correctly – we cover every step. 

Here are 7 steps for you to follow to get your equipment rental business up and running : 

1. Get started with your equipment rental business 

The first step towards starting your equipment rental business is to understand the market, industry, and technical jargon. Get the idea down on paper or create a digital mindmap to get a clear picture of the business roadmap. Connect all the relevant dots to verify your idea and its realistic implementation. 

Conceptualize and refine your idea 

Once you have the first machine rental business idea drafted, sit down to refine it further. Funnel it repeatedly through different filters like industry saturation, niche saturation, local competition, etc. This will help you refine the exact idea that will work best for you. 

Here are a few tips that will help you: 

• Find the right equipment 

You can find different types of equipment to rent out for different purposes. For instance, if you have enough capital, you can build a fleet of heavy construction equipment like bulldozers, loaders, etc. You can also get portable and handheld equipment like drills, chainsaws, etc. that cater to a specific industry. 

You can buy everyday tools and equipment to rent out to customers in your neighborhood. So, choose the equipment that you are well-informed about as having ample information will help you at every step of the equipment lifecycle. 

• Target a specific niche

Find a niche within the umbrella of the equipment rental business that you either have some knowledge of or have experience in. This will give you a competitive advantage from the get-go. 

Some of the popular niches in equipment rental are: 

• Construction equipment 
• Heavy equipment 
• Tools and small equipment 
• Machinery equipment 
• Road equipment 
• Dumpster rental equipment
• Lawn and garden equipment
• Carpentry or metalwork equipment 
• Determine the demand 

The next step is to research the demand in the market you are targeting. Make sure that you choose the right equipment rental business that has ample demand. For instance, if you are in a small city or town, you can offer a one-stop-shop rental solution. 

Get everything under your roof, buy equipment that is used regularly, and sign an agreement with other vendors for low-utilization equipment. If your city or town is rebuilding its infrastructure, you can primarily, offer construction equipment. Research what is in demand and stays in demand for a good chunk of the year. 

• Identify gaps and opportunities 

Once you know what equipment you will be renting out, find your competitors. Research them. Find out any business gaps that you can fill in. For instance, their business may not have specific high-utilization equipment, or maybe it is always rented out. Find these gaps and fill them in. As the saying goes, if you can’t beat them, join them. 

So, find partnership opportunities with competitors. If they have a high-revenue customer that they can’t fulfill the demand for, step in and become their vendor. There are always multiple opportunities that can be utilized to stand out from the competition. Find them and use them to your advantage. 

Equipment rental industry terms and metrics 

Every industry has its unique jargon which has evolved to be commonly used and understood by those belonging to that industry in the equipment rental industry, this jargon has officially been listed by the American Rental Association (ARA) to keep the industry standardized. 

Here are a few terms and metrics you need to be aware of: 

• Original Equipment Cost (OEC)

OEC measures the size of a rental fleet expressed in a base currency. Consistent with the concept of gross book value under U.S. GAAP, it represents the undepreciated cost of acquiring a piece of equipment.

• For assets bought off lease, OEC represents the cost paid to buy out the lease 
• OEC includes the cost of any refurbishments that can be capitalized under U.S. GAAP
• Time (Physical) Utilization (TU) 

TU is the time an equipment unit is rented divided by the total time available. Fleet-wide TU is weighted by OEC and is a measure of fleet efficiency expressed as a percentage of the time the fleet is on rent.

• TU per equipment unit = (OEC on rent during the period)/(Total OEC for the period)
• Financial Utilization ($U)

$U is a function of annualized rental revenue exclusive of ancillary fees weighted by OEC. 

• $U is calculated by dividing ‘pure’ rental revenue by the average OEC 
•  ‘Pure’ rental revenue excludes ancillary fees such as environmental fees, damage waivers, delivery charges and re-rent revenue
• Fleet Age (Age)

Age is the OEC-weighted average age (expressed in months) of the equipment in the fleet.

• The in-service date is used to calculate fleet age 
• No adjustments for refurbishments
• Change in Rental Rate (%RR) 

The period-over-period change in rental rates measures the change in average contract rental rates. Rates vary depending on contract type (daily, weekly, or monthly) and the equipment rented. 

• When reporting period-over-period rental rate changes, rental companies measure the average change in contract rental rates weighted by the prior period revenue mix

(These terms have been taken directly from the ARA Rental Market Metrics ) 

2. Research your market and locality 

Conducting a detailed analysis of your target market and locality will give you meaningful insights that will help you make informed decisions about your equipment rental business. Analyze and understand the competition to effectively offer better rentals to your customers. 

Do an in-depth analysis

This is where pen and paper or a digital notetaking app will help you. Write down everything your competitors are offering, learn how they offer it, what prices they have, and how they’re able to retain their customers. These small details will significantly help you in the long run. 

Take these steps to set up Northstar for your equipment rental business: 

• Conduct thorough market research

In in-depth market research, try to find your competitors locally, county-wide, and in your state. The wider your scope of research, the more insights you will get. Keep in mind that if you’re starting a heavy equipment rental business, you may have to shorten the radius since logistics will be an important financial aspect to consider. However, you can bypass that by offering delivery and pickups as an additional service. 

• Analyze pricing strategies

The next step will be to check the average pricing for the equipment you are planning to rent out. The price may vary depending on factors like availability, time of the year, weather conditions, etc. For instance, the weather-specific equipment will be priced differently during high-utilization and low-utilization months. Consider all factors before finalizing the pricing for your equipment. 

• Figure out your USP 

The unique selling point (USP) of your business will be the decisive factor for customers to come to you rather than your competitors. So, stand out among the competition with a meaningful USP. For instance, you can offer to rent during days when all other competitors are closed. You can add extra services such as logistics, on-the-spot maintenance of your equipment, etc. Find something that solves crucial challenges your customer base is facing. 

3. Plan your equipment rental business 

The next phase in starting your construction rental equipment business is to plan it in detail. Take the initial concepts to the next stage. Define a future-proof business plan, estimate and set budgets, and keep all financial aspects in mind. 

Chalk out a future-proof business plan 

If you want to future-proof your business, you start with a roadmap that accounts for all factors that may affect your operations. You will have to define a proper business plan including deep dives into operations, finances, and marketing. 

Here’s what to do: 

• Detail the business plan

Outline a business model that covers all aspects of your operational workflows. Understand how your business will operate, which equipment rental software to use, what a single workday will look like, etc. From day-to-day operations to monthly reporting, and from quarterly projections to yearly goals – write down everything. 

• Define business goals for your target market

Once you have your unique value proposition in place, you will have a clear picture of what your business goals should be. Consider your target market. If you’re targeting construction equipment rentals, what value will your rental business provide to construction companies?

 If you are starting a small equipment rental business, why should your community come to you instead of buying their own? Have clear goals regarding what you want to achieve, and highlight the value you’ll add for your customers.

• Outline marketing strategy 

Once your business plan is ready, you will then have to figure out how you will market it to your customer base. Define a few ideal customer profiles (ICPs) that will help you provide more value to individual customers. For instance, if you are a small equipment rental business, one of your ICPs may be a hobbyist who enjoys making wood furniture as a side gig. Define your ICPs and market your business around them. 

Set a budget for your equipment rental business 

Once you’re done with the business plan, move on to budgeting your rental business. This will help you forecast all kinds of financials you need to be aware of. A robust financial plan will include equipment, startup, leasing, permits, insurance, logistics, marketing, and operational costs. 

These tips will help you create a solid financial plan: 

• Calculate all initial business costs 

Anticipate and note down every kind of cost that you will have to bear from the start of your rental business to when it’s operational. If there’s anything you think will have a price attached to it, note it down. It is always better to be prepared. 

• Identify operational costs 

It is important to be aware of all costs associated with running your equipment rental business. Depending on the type of equipment you offer, you will have to consider the cost of regular maintenance, servicing, repairs, and even breakdowns. Have a strategy in place to recover damages easily. Include costs for rental software, staffing, overheads, and marketing in operations as well. 

• Set revenue targets 

Once you have decided on the rental prices for your equipment, it will be easier for you to forecast your regular expected cash flow. Set revenue targets for every quarter and plan your business strategies accordingly. It is easier to set a revenue target first and then try to achieve it rather than jumping in and hoping for the best. Revenue targets will help you align your marketing and rental strategies. 

• Review quarterly and align 

Consider the first year of your rental business as a trial period. You will be testing out various strategies to find the one that works for you. Schedule weekly, monthly, and quarterly reviews to nudge your business in the right direction. This is crucial. 

Highlight what is working for you, what can be improved, and what needs to be eliminated. If you’re using holistic rental software , it will highlight which equipment is performing well and which has low utilization. You can add and subtract equipment to your rental assets to retain and increase revenue every quarter. 

Financial aspects to keep in mind 

For an equipment rental business, there are a few key financial aspects that you need to consider. These can easily make or break your business. Think them through properly, and come up with a strategy customized for your rental business and your customers. 

Here are the crucial financial metrics to consider: 

• Rental rates

You can set your rental rates for your equipment depending on the market, locality, demand, and customers. The rental rate for one specific piece of equipment will also vary depending on its type, the time of year, and the condition of the equipment. Generally, all equipment rental businesses offer a daily, weekly, and monthly rate. As a rule of thumb, the longer your equipment is rented, the higher the profit will be, even if the daily rate for that period is lower than the average daily rate. This is because you will have fewer costs added to it like maintenance, downtime, and delivery and pickup. 

• Utilization 

Keep in mind that equipment with high utilization will always yield a higher profit. But to cater to this high demand, you have to add more rental equipment to fulfill the demand. You can very easily lose business to a competitor if your high-utilization equipment is frequently unavailable due to being rented out or maintenance. Your competitors will happily jump in to fill this gap for your customers. 

• Seasonality 

Depending on where your business is located in the States, you have to consider seasons as a factor that will affect your rental business. The summer months are usually busier and the winter months are slower. You can add a wide range of equipment to cover both seasons. For instance, you can offer construction equipment during the summer and winter equipment during the snowy months. 

4. How to buy the right equipment for your business 

When buying equipment for your rental business, ensure that you get the best deal. The condition and durability of your equipment will determine how successful your rental business will be. Buy, lease, and get what your customers need. 

Think through the equipment purchases 

There can be multiple ways you can populate the assets and inventory of your equipment rental business. You should always get the best bargain via payment options that suit your needs and budget. 

Here’s what to look for: 

• Choose to lease or buy the equipment 

If you have enough capital to buy all the necessary equipment at the beginning of your business journey, go ahead and buy it all. If not, you can segment your equipment purchases into high-utilization and low-utilization, and buy the former first and buy the latter down the line. If you’re low on capital, leasing can be a great option to minimize startup costs. You won’t have to dip into too much capital upfront. 

• Find out the value of individual pieces of equipment 

Evaluate every single piece of equipment to assess its utilization level and profit margin. This way you’ll be able to get the right tools that get you the revenue you want to achieve your fiscal targets. Keep in mind that high-value equipment usually has regular high maintenance costs as well. If you’re only starting out, you can avoid the high-value equipment for the initial 3 to 6 months. As your business grows, you can buy those as well. 

• Buy the equipment your customers need 

Another best practice is to customize your equipment purchases to cater to the needs of your customers. Rather than buying the equipment you want, you can buy the equipment your customers need. That way, you will ensure regular bookings and rentals for your assets. 

Get the best possible deals 

Let your bargaining prowess shine through when you go out to buy the equipment you want for your business. It’s a simple game of getting the best deal possible after searching for what’s available in the market and for how much. 

Here are a few tips that will help you get the right equipment: 

• Get rates locally and online 

Although the same piece of equipment may be available at different prices in different States, you should always be aware of the price differences. First, go out into your local market, browse through the vendors, and compare prices there. Then, tally these prices with online stores even if they’re not from your own State. 

This will set a good baseline price for you. When comparing prices, include shipping costs, wherever applicable, in the overall price. Logistically, heavier equipment will be cheaper to buy locally, but you may get a better deal online for small equipment. 

• View warranties and reviews beforehand 

To make an informed decision when purchasing equipment, make sure you compare not only the prices but also the warranties offered. If you are buying equipment you personally have not used before, it is better to read customer reviews in depth, especially for high-value equipment. Chances are that a similar piece of equipment from two different manufacturers may have different longevity and durability. Also, dive deep into the troubleshooting forums of high-value equipment to find out if customers have faced a similar maintenance issue with certain equipment. It’s good to know all this before making a bad investment. 

• Buy in bulk or ask for further discounts 

Lastly, if you are purchasing more than one piece, buy it in bulk as it will reduce the overall cost. Find wholesalers who may be able to get you a better deal. Even if you are buying from a retailer, don’t shy away from asking for a further discount. Build good vendor relationships from the start. Let your vendors know you are here for the long run. It will help in creating a lasting customer relationship with them. 

Increase the lifecycle of your equipment 

Once you have bought the equipment you need for your rental business, the next step is to ensure that you increase their lifetime value. Your equipment will be your bread and butter, so make sure you maintain, service, and repair regularly. Well-maintained equipment will have zero to low downtime since it will keep on running like a well-oiled engine. 

Follow these tips to ensure longer equipment lifecycles: 

• Schedule and perform regular maintenance and inspections 

Great rental software will help you create regular maintenance checkups for your equipment. You can also schedule inspections to check if there is any problem that needs fixing. For heavy construction equipment, you will have to change oil, filters, etc. Maintain a way to schedule these regularly. A best practice is to fix a timeline or use the odometer readings. For instance, you can plan maintenance after every 100 hours or every 100 miles. 

• Track and analyze maintenance, servicing, and repairs 

Keep track of all your maintenance, servicing, and repairs to quickly assess the health of your equipment. Vehicles and construction equipment that have been cleaned, maintained, serviced, and repaired on time will always have a higher probability of being rented out frequently. Analyze your maintenance, schedule accordingly, and minimize your costs. 

• Provide necessary guidelines or train customers 

Most equipment breakdown happens when the equipment is not handled properly. To ensure that this doesn’t happen, provide guidelines to your customers on how to correctly operate and use the equipment. If your customer is a first-timer, you can offer to train them on the equipment, for free or with an additional charge. Always be available for support in case an experienced customer faces a mechanical breakdown while using your equipment. 

The best equipment to rent 

To get an idea of which equipment you should buy for your equipment rental business, you can browse this list. These items are utilized regularly and are rented frequently:  

• Regular and mini excavators for excavator rental business
• Skid steers
• Wheel loaders
• Graders 
• Bulldozers 
• Track loaders 
• Multi-terrain loaders 
• Wheel excavators 
• Trailers 
• DIY and everyday tools for small equipment rental business 
• Equipment for machine rental business 
• Lawn and garden tools 

5. Prep your equipment rental business for the web  

After purchasing the right equipment for your business, you have to find the right channels to market it. If your target market is local, you can print out flyers and put up a billboard in a strategic location. Apart from this, you can leverage the power of the internet to increase your outreach. 

How to rent out equipment online 

You can use rental software to manage your rentals online. You can also create a website and webstore to redirect your customers to your online portal. Since the rental software is a turnkey solution, you’ll be able to kickstart your rental business from day one. 

Here are a few steps you can take to highlight your online presence: 

• Create a professional website and webstore 

Start with a professional website for your equipment rental business. Research the available options as some rental software comes packed with the ability to create a website or a webstore directly. You can populate your equipment assets onto the webstore so your customers can book rentals online. An online webstore will take your business to the next level by allowing your customers to check availability and rent instantly. You won’t have to worry about the time and costs involved in booking orders on a one-on-one call. 

• Integrate industry keywords and SEO 

Research your industry and competitors, and find out what your customers are searching for on all popular search engines. Once you have a list of keywords they are using, you can incorporate them into your website to achieve higher discoverability. The more eyeballs you get on your business website, the more customers you may be able to do business with. 

• Leverage social media to build trust 

In this time and age when everyone is present on social media, leverage it for your business. Be present where your customers are, and engage with them frequently. Resolve their issues there, inform them of discounts, attract them to your business, and build long-lasting relationships.  

Build your team 

For a business to successfully grow, you need to hire a team of specialized professionals who can help you in different aspects of your rental business. To reduce costs at the start, you can be a one-person-army and handle everything yourself. But if you want to grow, you will have to build a team. 

These tips will be useful in building a dream team: 

• Identify critical roles 

Find out what the critical roles are for your equipment rental business. You may not need the conventional roles a regular company has, or you may have the margin to merge two similar roles into one. Plan your business team accordingly. Whatever you can do quickly, do it yourself, whatever else remains, delegate it. You can take ownership of sensitive business roles and hire professionals for all other tasks. This is where powerful rental software will act as another member of your team by automating a high number of your rental workflows. 

• Empower your team with knowledge 

A great business owner takes a leadership role and enables their team to take ownership of their individual departments. Take time out to train your employees with the right tools and knowledge so they can handle everything on their own rather than escalating every minor issue to you. Train them on the rental software as well or get the help of the rental software company to get your employees onboarded quickly. 

6. Consider legal aspects from every perspective  

There are certain legal considerations you need to be aware of for your equipment rental business. Safeguard your business by getting relevant guidance online and from related authorities. You will have to get permits, licenses, insurance, etc. before you can actually start your business. Research online, visit helpdesks of relevant government agencies or get insights from similar businesses in your area. 

Create robust procedures 

To streamline your rental operations and ensure consistency in the quality of your business, get proper and robust procedures in place. Fill the gaps and cover all contingencies by creating a process for every rental business workflow. 

Here are a few guiding points to help you get started: 

• Write down comprehensive rental agreements, contracts, and policies 

Have proper rental agreements and contracts on your rentals. In all of your customer-business interactions before, during, and after renting out, get an agreement document signed. Write clauses in that agreement or contract to cover all your bases. If it is high-value equipment, you can get pre-booking agreements signed by your customers as well. Jot down comprehensive agreements that help your customer understand how and what action needs to be taken in case of a contingency. 

• Detailed inventory management 

Manage your rental assets efficiently via rental software to always know where every piece of equipment is and for how long. Your inventory management will ensure that you get the best ROI on every piece of equipment available at your rental business. 

• Streamlined logistics, pickups, and deliveries 

If you are planning on offering delivery and pickup services to your customers, you can charge them for this service. If you want them to manage this on their own, make sure that you have a few logistics companies at your disposal to offer to them. Build trust with logistics and ensure peace of mind knowing your equipment won’t be damaged during transportation. 

• Establish maintenance and servicing protocols 

Have proper protocols in place for checking in and out of your rental equipment. Ensure that regular cleaning, maintenance, servicing, and repair protocols are followed. The time you spend in creating these protocols will save you time and money you won’t spend on breakdowns and equipment downtime. 

• Power up with rental software 

Get equipment rental software to automate your workflows. A holistic software will include every workflow your rental business needs. These crucial workflows are order management, customer management, bookings, tracking, invoice management, recurring orders, sub-renting, documentation, analysis, custom reports, customer portal, rental webstore, and much more. Go with rental software that helps you automate as many of your workflows as possible. 

7. Launch your equipment rental business 

Finally, when you have taken all the necessary steps, get ready to launch your equipment rental business. Market it to your customers through the right channels, book orders, and let the equipment rental business begin. 

Happy renting!

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Frequently asked questions, what construction equipment is rented out the most, how profitable is an equipment rental business, what is the most profitable construction machinery, explore more articles.

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Start a Power Tool Rental Business: Your Ultimate Guide

Do you want to be your own boss and have a successful business? If so, starting a power tool rental business could be the perfect opportunity for you.

In this ultimate guide, we will show you everything you need to know to get started, including how to find the right products, setting up your store, and marketing your business. By the end of this guide, you’ll be ready to start renting out power tools and making money!

Table of Contents

What is a power tool rental business, why would i want to start a power tool rental business, how do i find customers for my power tool rental business.

A power tool rental business allows individuals and companies to rent out various types of power tools for a set period of time. These tools can range from drills and saws to pressure washers and lawnmowers, depending on the specific business.

By renting these tools instead of purchasing them, customers can save money, especially if they only need the tool for a one-time project. Similarly, the rental business can also offer customers access to high-end or specialty tools that they may not have been able to afford otherwise. For those in the construction or landscaping industries, such a rental business can prove to be a valuable resource for completing jobs efficiently and effectively. Overall, a power tool rental business helps make certain equipment more accessible for both personal and professional use.

Are you an entrepreneur looking for your next business venture? If so, have you considered starting a power tool rental business? In this section, we’ll outline some of the benefits of starting a power tool rental business so that you can make an informed decision about whether this is the right business venture for you.

There are many benefits to starting a power tool rental business. For one, it’s a relatively low-cost business to start. You won’t need to invest in inventory until you have customers renting from you, so you can start small and grow your business as demand increases. Additionally, there’s a growing market for power tool rentals as more and more people are moving into urban areas where space is limited and they don’t have room to store all their own tools.

Another benefit of starting a power tool rental business is that it’s a recurring revenue model, which means that you’ll have a steady stream of income coming in every month. This will give you the stability and predictability that many businesses lack. Additionally, because people will need to rent tools on an ongoing basis, they’re likely to become repeat customers, which will further increase your income.

Finally, starting a power tool rental business is a great way to be your own boss and achieve financial independence. If you’re tired of working for someone else and want to be in control of your own destiny, this may be the perfect business venture for you.

As you can see, there are many benefits to starting a power tool rental business. If you’re considering becoming an entrepreneur, this may be the perfect opportunity for you. With a relatively low start-up cost and a recurring revenue model, starting a power tool rental business can provide you with the financial stability and independence that you’re looking for.

How do I start a Power Tool Rental business?

Have you ever thought about starting your own business, but didn’t know where to start? Power tool rental businesses can be a great option for entrepreneurs who are handy and have an interest in construction or home improvement. In this section, we’ll give you an overview of what you need to do to get started in this business. We’ll cover everything from finding the right location to stocking your inventory. So if you’re ready to start your own power tool rental business, read on!

Do your research

Before starting a power tool rental business, it is crucial to do your research and understand the industry. This means learning about the different types of power tools that are in demand, as well as the rental process and pricing. It is also important to understand the competition and how they conduct their business.

Additionally, make sure you have a clear plan for marketing and customer service strategies, as well as budgeting for maintenance and repairs of the tools. By taking the time to thoroughly research and plan, you will set yourself up for success in this competitive industry.

Choose your target market

When starting a power tool rental business, it’s important to first identify your target market. Will you primarily be renting to construction companies? Homeowners doing DIY projects? Landscapers? Each of these groups may have different needs and interests, so it’s important to carefully consider who you want to serve.

This will also help guide your inventory decisions – construction companies may be interested in large equipment like jackhammers and concrete saws, while landscapers may prefer lawnmowers and leaf blowers. By narrowing down your target market, you’ll be able to tailor your rental offerings and better meet the needs of your customers.

Set up your business

When starting a business, it’s crucial to set up your online presence in a professional and branded manner. First, create a website that clearly displays the services you offer, your contact information, and potentially even an online booking system. Next, set up social media pages on platforms where your target audience spends time – this could include Facebook, Instagram, Twitter, or LinkedIn.

Make sure to incorporate the same branding elements across all of your online channels – this includes colors, logos, and fonts. Finally, spend time regularly updating and maintaining these pages with relevant content such as promotions or new rental options to attract potential customers.

By creating a strong online presence for your power tool rental business, you’ll give yourself the best chance for success in the industry.

Source your tools

Starting a power tool rental business can quickly become expensive when purchasing new equipment. To save money and still provide reliable tools for your customers, consider sourcing them in different ways. Buying new tools can be a good option for some of your main, high-demand items, providing the latest technology and features.

However, leasing may also be a cost-effective solution for more specialized or infrequently used equipment. And don’t overlook the potential to find gently used tools in good working condition from secondhand sources like auctions and online marketplaces.

By diversifying your tool sources, you can keep costs low while still providing quality options for your customers.

Market your business

Starting a new business can be both exciting and nerve-wracking. It’s important to begin marketing efforts as soon as possible to attract customers and spread the word about your company. Luckily, there are numerous ways to advertise your power tool rental business both online and offline.

Consider creating a website or social media pages for your business, where customers can easily access information about rentals and availability.

Advertise in local newspapers or on community bulletin boards to reach potential clients in the immediate area.

Offer special promotions or discounts to incentivize customers to try out your services. The key is consistently getting your brand out there and making it known that you offer top-notch power tool rentals at competitive prices.

With some strategic marketing efforts, you’ll soon see an increase in customer interest and revenue for your new business.

Manage your business

Running a successful business requires keeping track of numerous details, but they are all necessary in order to keep the operation running smoothly. As a power tool rental business owner, it’s important to maintain an accurate and up-to-date inventory of your tools. This ensures you have enough equipment for customers and helps prevent any mix-ups or misunderstandings.

Likewise, it’s crucial to handle customer inquiries and complaints promptly and effectively. Not only does this ensure a positive experience for the customer, but it also shows that you value their feedback and are committed to providing excellent service.

Taking the time to manage these tasks may seem like added work, but ultimately it will make for a more successful and efficient business.

How much does it cost to start a Power Tool Rental business?

Perhaps you’re handy with carpentry and figure this could be a great way to make some extra money on the side. Or, maybe you’re looking for a new business venture and think a power tool rental shop would be perfect for your market. Regardless of your reasoning, starting any business comes with certain costs that must be considered before taking the plunge. Here’s a breakdown of some of the most important factors to keep in mind when estimating the cost of starting a power tool rental business.

Initial Investment Costs

The initial investment cost for starting a power tool rental business will vary depending on the size and scope of your operation. For instance, if you’re planning on opening a small shop out of your garage, your start-up costs will be less than someone who is looking to open a large storefront operation. Additionally, the location of your business will also play a role in how much you’ll need to spend upfront; leasing or purchasing commercial property in a high-traffic area will obviously cost more than setting up shop in a less desirable location.

Another important factor to consider is inventory. Obviously, you’ll need to have tools available for rent, so you’ll need to factor in the cost of purchasing or leasing these tools. If you’re planning on carrying higher-end brands or models, this cost will be higher than if you’re carrying more budget-friendly options. Additionally, you’ll need to consider the cost of maintaining and repairing your inventory; as with any type of machinery, power tools require regular upkeep and sometimes unexpected repairs, so you’ll need to factor those costs into your budget as well.

Ongoing Operating Expenses

In addition to your initial investment costs, there are also ongoing operating expenses that must be considered when budgeting for your new business. These include things like utilities (electricity, water, etc.), rent or mortgage payments (if applicable), insurance premiums, employee salaries (if applicable), and marketing costs.

One expense that is often overlooked by new business owners is licensing and permits. Depending on the type of power tool rental business you’re planning on starting, local regulations may require you to obtain certain licenses or permits before beginning operation. Failure to do so could result in hefty fines or even cause your business to be shut down completely, so it’s important to research the requirements in your area and factor those costs into your budget as well.

Starting a power tool rental business can be a great way to earn extra income or even launch a full-time career. However, as with any business venture, there are certain costs that must be considered before taking the plunge. From initial investment costs like property leases or purchases and inventory acquisitions to ongoing operating expenses like utilities and employee salaries, there are many factors that can impact the cost of starting and running a power tool rental business. By doing your research and carefully budgeting for all potential expenses, you can increase your chances of success when starting your own power tool rental business.

In order to be successful in any business, you have to have customers. It doesn’t matter how great your product or service is-if no one knows about it or wants to use it, your business will not thrive. This can be especially challenging for new businesses, which is why today we’re giving some tips on how to find customers for your power tool rental business. Whether you’re just starting out or have been in business for awhile, these tips will help you attract new customers and grow your business. So let’s get started!

Start by targeting your local community.

When starting a business, it can be tempting to cast a wide net in search of customers. However, one of the best ways to begin is by targeting your local community. This means identifying neighborhoods and communities that are likely to have a need for power tool rentals, such as residential construction or home improvement projects.

By focusing on a smaller, defined area, you can tailor your marketing efforts and build relationships with potential customers. Additionally, serving your local community enables you to understand their needs and provide personalized service, which can lead to repeat business and positive word-of-mouth recommendations.

So before expanding beyond your immediate surroundings, start by targeting your local community to ensure successful growth for your Power Tool Rental business.

Make a list of businesses and organizations in your area that may need power tool rentals for short-term projects or events.

Have you ever thought about reaching out to local businesses and organizations in your community for power tool rentals? Events companies may need rentals for setting up outdoor stages or tents. Construction firms might be in need of temporary equipment while their own gear is being repaired.

Homeowners associations might need rentals for community projects, such as building a new playground or fixing bike paths. Schools and universities may also have a need for power tool rentals for construction projects or various events. Don’t forget about small businesses like landscaping companies or home improvement stores that could use some extra equipment during busy periods.

By expanding beyond individual homeowners to include these types of organizations, you can increase the potential customer base for your power tool rental business. And don’t forget about word-of-mouth referrals – one satisfied customer could lead to repeat business or recommendations to others in the area. So start thinking outside the box and bringing in new business from your community!

Reach out to these businesses and organizations and let them know about your business and the services you offer.

One way to attract customers for your power tool rental business is by reaching out to local businesses and organizations. Contact contractors, home improvement stores, landscaping companies, event planners, schools, and community centers. Offer special discounts or packages for their frequent rentals.

These businesses may need temporary equipment for specific projects or events, and by offering competitive prices and convenient service, they will be likely to turn to you as their go-to source. You can also consider partnering with these businesses and organizations.

Offer a referral program where they recommend your services to their clients in exchange for commission or a discount on their own rentals. By actively utilizing the networks of these businesses and organizations, you can successfully expand your customer base and increase profitability for your power tool rental business.

Promote your business online, including on social media platforms and through online directories.

One effective strategy is to promote your business online. Start by creating a website, or update your current one with attractive graphics and descriptions of the equipment you offer. Then, branch out to popular social media platforms like Facebook and Instagram, where potential customers can easily find and interact with your business.

Don’t forget about online directories like Yelp and Google My Business, where customers can leave reviews and contact information for others to see. Overall, promoting your business online is a simple and cost-effective way to attract new customers and expand your reach.

Attend local events and meet-ups to network with potential customers and partners.

When it comes to finding new customers for your business, networking should definitely be a part of your marketing strategy. Attending local events and meet-ups is a great way to make valuable connections and get the word out about your Power Tool Rental business.

Not only can you discuss what sets your services apart from competitors, but you can also learn about the needs and interests of potential customers in your area. And don’t forget about follow-up – keeping in touch with those connections will help solidify them as repeat clients or even referrers to their own network. So next time an event or meet-up related to your industry pops up on your calendar, think about making an appearance – it just may bring some new business opportunities your way.

Offer special deals and discounts to attract new customers.

Attracting new customers is always crucial for a business’s success, and offering special deals and discounts can be a great way to bring them in. However, it’s important to consider why potential customers might choose to go with your business instead of a competitor’s.

Discounts can certainly be enticing, but offering added value through discounts on accessories or extended rental times can also make a difference. It’s also important to target the right audience – offering discounts to contractors or DIY enthusiasts who are likely to need power tools on a regular basis may bring in more repeat customers.

And don’t forget about word of mouth – incentivizing current customers to refer friends and family can not only bring in new business, but also build customer loyalty. Overall, offering deals and discounts can definitely attract new customers, but thoughtful consideration of your audience and what will truly add value for them can have even better results.

About Jeremy Reis

Jeremy Reis is a serial entrepreneur from the Franklin, Tennessee area. Jeremy is the founder of multiple businesses and is the VP of Marketing for CRISTA Ministries. Jeremy has his MBA with a focus in Entrepreneurship from The Ohio State University.

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5 Things to Include in Your Equipment Rental Business Plan

Whether you're just starting an equipment rental company or looking for ways to improve how you do business this year, it's crucial to create and constantly monitor the business plan that works best for achieving your specific goals.

There are multiple aspects to an equipment rental business plan. It should cover how you plan to make your business successful. Just a few of these include working through revenue sources, aligning with business legalities, identifying what innovative equipment you plan to offer, and more.

Starting and growing a business is hard work, and it's important to have a solid foundation. Here are a few must-haves to incorporate into your equipment rental business plan in order to rise to success.

1. Revenue sources

Identifying revenue sources is one of the most important parts of building your business plan–it's what's going to make or break it. In what ways are you going to generate income for your heavy equipment rental business? Here are just two options.

Brick-and-mortar store

Obviously, you need a place to house the equipment you plan to rent out to contractors. If you're not sure where to set up shop, research the customer base in a particular area. Check out your competitors, as well. Will you have enough of business there to be able to grow?

Online presence

Because of the constant rise in technology, you'll want to include having an online platform in your equipment rental business plan, or you'll be left in the dust. Create a plan for how you'll succeed digitally. 

One thing to do is to start a website. Whether you opt for online transactions or you just want to showcase your wide array of equipment, getting onto the World Wide Web is likely to increase your bottom line. Make sure to include these major items on your website:

• Available equipment
• Contact info
• Business hours

Don't forget to optimize for Local SEO. This is a crucial part of your online presence considering your customers will most likely all be local. Learn more about Local SEO here .

2. Business legalities

You can't create an equipment rental business plan without including your plans regarding legalities, taxes, and insurance.

There are several business types you could check out. Limited liability can be a good fit when starting a small rental company. However, make sure you talk to a business mentor or accountant before making a decision.

Insurance is necessary to avoid having your business shut down by a customer who's suing you for injury or damage. The following are a few types of insurance to consider including in your plan:

• General liability
• Property insurance
• Commercial vehicle insurance
• Workers' compensation

3. Equipment maintenance

Your business plan should include an efficient maintenance and repair process that you can implement after receiving equipment back from your customers.

There may be some cases in which contractors bring back your equipment damaged or missing parts. And don't forget to plan a preventive maintenance schedule to make sure your equipment continues functioning to its full potential.

If you're just starting out and you're familiar with the equipment, performing the maintenance yourself can help you cut corners and save money. You could also consider supporting a local shop that specializes in equipment repairs, or you could hire an in-house mechanic. Keep in mind in-house mechanics may be more efficient for your business in the long run.  

BONUS TIP : Be sure to keep up-to-date photos in your equipment maintenance records. Take photos before and after a piece of equipment is examined and repaired (if necessary) upon its return. This will help you determine how the machine was treated in a particular customer's care.

4. Marketing strategy

A marketing strategy is important for the growth of a company, and a brief outline of your strategy should be included in your rental equipment business plan. Here are two aspects to consider:

• Social Media Social media platforms like Facebook and Instagram can help increase brand awareness. From there, you can post and share photos, customer stories, and blog posts you've published. This builds connection and trust with potential and current customers.
• Advertising If you want to advertise your business, consider digital ads on Facebook and Google and print ads in trade magazines. If you're not sure where to get started with Facebook advertising, Boostpoint , a SaaS company associated with Equipter, can help! 

5. Innovative multipurpose equipment

Don't play guessing games when it comes to buying equipment for your business. Potential investors in your business want to know that you've done your research and plan to serve your community to the best of your ability. To find out what equipment you should purchase, scope out your competition and learn what your potential customers need. 

After finding out what's important to them, make sure to stress that you'll focus on quality equipment rather than quantity. It's better to have a few pieces of equipment of superior quality than a large fleet of unreliable and easily damaged machinery. 

The Equipter RB4000 is a low-maintenance, innovative piece of equipment that serves contractors in roofing, general construction, and restoration across the US and in lower parts of Canada. Click the link below to find out how it can enhance how your equipment rental company does business. 

Business plans for equipment rental companies are essential for attracting investors to get a kickstart on your next venture . Be sure to do your research to get a big picture view of how to create a plan unique to your vision.

HELPING SMALL BUSINESSES SUCCEED

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What do you need to know about starting a business?

• Start up business ideas
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• Skills and wellbeing
• Business planning
• Financing a business
• Tax and National Insurance
• Business law
• Sales and marketing
• Business premises
• Business IT
• Grow your business
• Types of business
• Testing business ideas
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• Is running a business really for you?
• Start up stories
• Registering as a sole trader
• Setting up a limited company
• Business names
• Buy a franchise
• Buying a business
• Starting an online business
• Setting up a social enterprise
• Small business support

Protect your wellbeing from the pressures of starting and running a business and develop key business skills.

• Dealing with stress
• Manage your time
• Self-confidence
• Write a business plan
• Business strategy
• Start up costs
• Start up funding
• Setting prices
• How to work out tax and NI
• Accounting and bookkeeping
• Licences and registration
• Protecting intellectual property
• Insurance for business
• Workplace health, safety and environmental rules
• Looking after your customers
• Promote your business
• Your marketing strategy
• Sales techniques
• Research your market
• Creating and optimising a website
• Commercial premises
• Premises security
• People management
• Recruitment, contracts, discipline and grievance
• Employment rights
• Hiring employees
• Buying IT for your new business
• Basic IT security
• Preparing for business growth
• How to scale up your business
• Funding business growth
• Start exporting
• Personal development

How to start up a tool hire business

If you want to start your own tool hire business, you'll need plenty of capital to buy the range of professional quality tools and other equipment that a tool hire venture needs. Our guide covers the key issues for starting and running your own tool hire business.

Research your tool hire business target market

Establish your customer profiles, why will people choose your tool hire business, specialising, pricing your tool hire services, promote your tool hire business, buy an existing tool hire business.

When you plan your tool hire business it's very important to think about who your potential customers will be and make a realistic estimate of the level of demand. It's also important to find out how much existing competition there is.

Estimating demand

Demand for tool and plant hire is closely linked to the strength of the housing market and the construction industry. The state of the local economy also has a big effect on the hire sector - when people have more money to spend they are more likely to carry out home and garden improvements and so to hire tools - or to engage trades-people who hire tools.

Trade customers

If you intend to target trade customers, remember that these will mostly be firms involved in the building and related sectors. Potential demand will depend on the number of such firms in your area. Before investing in expensive equipment, do some research into the number of businesses operating nearby which could be potential customers. A quick online search will give you an idea of the number of builders, decorators, landscape gardeners and so on, who are based locally. Larger firms will probably own most of the equipment that they need for the types of work they carry out. Smaller businesses may be a better source of trade - for many smaller businesses and sole traders it makes more sense to hire than spend lots of money on machinery which is only occasionally used.

Domestic customers

Demand from domestic customers is closely linked to the housing market - people moving to a new home are more likely to carry out some alterations or refurbishment. The size of the local population and any new housing developments will have a large bearing on the amount of trade you can expect. Also bear in mind that affluent homeowners are more likely to pay somebody else to decorate or carry out renovations than do it themselves. As a result, upmarket locations may not be the best location for your tool hire business.

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Other factors

Other things that influence the demand for hire tools include changing fashions in garden and interior design. TV programmes have encouraged more people to try refurbishing their homes and gardens. From time-to-time popular trends emerge - for example garden patios became very popular some years ago, but more recently wooden and composite decking has become fashionable. Inside, polished wooden floors have gained in popularity, increasing demand for sanding machines.

The weather can have an effect too - large parts of the UK have suffered from flooding in recent years, leading to a surge in demand for water pumps and dehumidifiers.

Check out the competition

Having thought about the potential demand locally, you need to consider the level of competition that your business will face. As people are unlikely to travel further than necessary to hire tools, your competitors will be limited to other local firms. These might range from independent hire shops to branches of large chains such as HSS Hire , Brandon Hire , Speedy , or other national or regional chains. Several of the big builders merchant chains offer tool hire, including Travis Perkins and Jewson , as do some of the large national DIY specialists.

Count how many of these businesses are already offering tool hire in your area. Have a look at the services offered by each of these competitors to establish:

• whether they concentrate on domestic or trade customers
• what range of tools they offer
• whether they hire out plant equipment
• if they offer repairs and servicing of customers' equipment
• whether they offer tools or other equipment for sale
• what prices they charge
• if they are members of a trade association
• if they are part of a quality standards scheme
• whether they specialise in any way - for example in garden or horticultural equipment
• what their opening hours are
• how knowledgeable and helpful their staff are
• whether the premises and fittings are modern and smart

Consider carefully how your new business will compete with any existing tool hire outlets.

Research current trends, plus legal and tax issues

• Sector trends for tool hire businesses
• Legal issues for tool hire businesses
• VAT rules for tool hire businesses

Before you can estimate demand, you'll need to consider who your customers will be.

Hire shop customers fall into two main groups with different needs - trade customers like builders and landscapers, and private householders. Trade customers will often want to hire larger items - for example, local building firms may need to make occasional use of an excavator, scaffolding tower or other plant equipment. Private householders (and some of the smallest construction businesses - typically self-employed trades-people who work on their own) are more likely to be looking for smaller items to undertake a DIY project at home. For example, a floor sander, garden rotavator or electric cement mixer, although they might occasionally wish to hire larger pieces of equipment too.

To attract trade customers you will need the financial resources and space to buy and store large pieces of machinery. Heavy plant equipment is expensive, requires costly maintenance and will need a large yard or covered storage area. Special vehicles may be needed to transport equipment to and from sites too. As a result, some small hire businesses concentrate on the domestic/small trades-person end of the market as the tools commonly hired are smaller, cheaper to buy and easier to store and maintain.

While private customers may be prepared to pick up smaller items of hire equipment from your outlet, trade customers may expect a delivery service to their sites. They will expect this to be prompt and efficient - and not too expensive.

There is a lot of overlap between the two sectors, however, and you may decide to target a mixture of both trade and domestic customers. Some smaller firms offer small plant equipment such as mini diggers and excavators and, if necessary, will occasionally hire in a large piece of equipment which a customer needs.

You'll need to make sure that enough people will use your business to make it profitable. There are a number of things to consider when trying to attract customers.

The right range of equipment

You must be able to supply the tools that your customers want to hire. If the tools that people need are not in stock and immediately available, there's a good chance that they will simply try somewhere else.

It is likely that you will be mainly targeting domestic rather than trade customers who require large plant equipment. A lot of your business will come from a range of basic items which are commonly hired, such as concrete mixers and floor sanders. Aim to ensure that you have enough of these to meet demand. Beyond such core items, the range of other tools that you are able to hold in stock will depend on your financial resources and the space available to you.

Having a reasonably wide range of tools and equipment will ensure that you can supply most customers with the item they want, but it may be unwise to try to stock everything - there's no point having money tied up in expensive tools that are very rarely hired. Remember that some outlets hire in specialist items when necessary, to re-hire on to a customer - you can consider doing the same should the need arise.

Price and convenience

When hiring tools, many people will simply look for the cheapest rates they can find. Competing with the prices charged by the large hire chain stores will be difficult, but you should try to ensure that your prices are at least broadly competitive with other nearby outlets.

Potential customers will also be greatly influenced by convenience. Location has a lot to do with this. Ideally the business will be located on or close to a main road, both for the convenience of customers and to attract passing trade. Adequate car parking will be an advantage. Town centre locations are usually expensive and an out-of-town enterprise park might offer a suitable alternative. You may not be able to choose or afford an ideal location, but you can still try to make things convenient for your customers - for example by offering a delivery and collection service.

Standards of service

Offering a high level of service and good quality tools will help to attract and retain business. Helpful, friendly advice from knowledgeable staff will greatly enhance people's opinion of your business. Keep the hire shop tidy and well organised and have efficient servicing and checking procedures for returned tools. Use good quality tools and keep them clean, well maintained, and attractively displayed.

Concentrating on these aspects will help you to attract customers in the first place and keep them coming back. Joining a trade association quality scheme will demonstrate that your business is run to a high standard and help to inspire confidence in it. You can find out about the SafeHIRE scheme and membership of the Hire Association Europe on the HAE website.

Quality of tools and equipment offered

Remember that all tools supplied for hire must comply with set safety standards. Within these standards there is a huge range of equipment of varying quality, cost and specifications. Customers will be concerned that the tools they are hiring are of a good quality and well maintained. As the tools are likely to have to withstand a lot of wear and tear, it makes sense to use sturdy ones to start with. You should put a rigid servicing and checking system in place to ensure that everything that leaves the shop is safe to use and fit for its intended purpose.

You may decide that your business needs to specialise in some way in order to distinguish it from others nearby. You could concentrate on a very specific section of the market, for example hiring out trailers or access equipment. You might decide to focus on plant hire. Alternatively, you could broaden the range of commonly used tools kept in stock to include some specialist items.

Before deciding whether to specialise, consider whether there will be sufficient demand. You don't want to spend lots of money on equipment that is rarely, if ever hired, so you must consider whether the investment will be worthwhile in terms of the extra business brought in.

To attract extra trade you might consider offering some or all of the following in addition to your standard tool hire range:

Garden tools

Gardening is a perennially popular pastime spurred on by the popularity of garden and home makeover programmes. People looking to redesign their gardens may require garden tool hire. The kind of garden equipment you might consider stocking includes items such as mowers, rotavators, chippers, leaf blowers, log splitters, chainsaws, hedge trimmers and rollers.

Mini diggers

Mini diggers are often in demand as they enable domestic customers to carry out larger garden projects that would not have been feasible before, such as garden landscaping, or digging foundations for an extension. Large excavators and other plant such as loaders or dumper trucks are usually hired complete with an operator on an hourly basis by firms that specialise in larger plant hire.

Cleaning equipment

Commonly hired interior cleaning equipment includes carpet cleaners, floor polishers, industrial vacuum cleaners and steam cleaners, which might be required by private householders, shops, offices or other businesses. You might also consider stocking pressure washers and leaf blowers, pumps and dehumidifiers.

Event hire items

Event organisers often need to hire major items when putting on an event such as an exhibition, show or sports meeting. These items might include crowd control barriers and temporary fencing, portable outdoor lighting and power, large-scale space heating and climate control equipment, marquees and tents, portable toilets (perhaps including larger toilet trailers and smartly turned out 'posh toilets'), and outdoor catering equipment. You will need plenty of space to store these if you decide to hire them out, and the capital cost of stocking them can be fairly high.

Sales, repairs and servicing

Some tool hire shops also offer sales of new and ex-hire tools, consumables (such as sanding discs, dust masks, saw blades or cleaning fluids) and safety equipment (such as goggles, masks, gloves and overalls). You might also consider offering repairs or servicing of customers' own equipment. A workshop will be needed for servicing hire tools anyway, so there will be little, if any, additional cost involved in offering this service to customers.

Getting the price right is very important. When you plan your pricing policy, remember that you must be able to cover your costs, overheads and drawings.

Hire charges

Tools are usually hired on a daily, weekly or weekend basis. It's generally cheaper per day to hire a tool for a week than for a single day. For longer-term hire, you might negotiate a significantly reduced rate with the customer. The amount charged generally increases with the size, complexity and initial cost of the equipment - for example, a large floor sander will cost more to hire than a wallpaper stripper. The exact amount you decide to charge will depend to a great extent on the going rate locally, so check to see what your competitors charge. Your customers will not be prepared to pay much over the odds for items that they can easily hire elsewhere. Think about whether you'll charge extra for delivering and collecting large items like cement mixers, and if so how much.

Bear in mind that the hire rate charged for each item must, over time, cover its initial cost, repairs, maintenance and transport if it is delivered and collected. Some items will be regularly hired and so constantly earning money. Other equipment may spend more time in storage than in use - you will have to charge a higher rate for such items if they are going to be worthwhile keeping in stock.

Other things to think about include cleaning charges if applicable and wear charges for machines that come with consumable blades and bits. You'll need to work out prices for other consumables like fluids and abrasives too.

When a customer collects a tool, the hire charge is usually paid and a refundable deposit taken. This is returned to the customer at the end of the hire period provided that the tool is brought back undamaged. Credit/debit card details and some proof of customer identity are usually taken as a safeguard against theft. You might decide to offer customers insurance cover against theft or damage of larger, more expensive items. Some hire firms insist on this.

Other services

Consider how you will cost any other services you provide (for example repairs and servicing of customer's own tools), how often you will review your prices and whether you will offer discounts such as reduced rates to regular customers, special offers and so on.

Special offers and discounts

You might decide to offer a standard discount as a matter of course to any trade customers. How much discount will depend on your pricing policy and the level of local competition.

Hire businesses which mainly target trade customers often offer special weekend hire deals. These are aimed at DIY customers - while trade customers like builders generally work Monday to Friday, this is the time when most DIY gets done. Weekend hire deals might run from Friday afternoon/evening until Monday morning and may be charged for at the same rate as a normal week-day's hire.

Many businesses also give discounts to employees, regular customers, family and friends. A reduced rate could be offered to groups such as pensioners. Check out your local opposition for ideas and keep a close eye on any special offers you do make to be sure that they are working for you. After all, these kinds of promotions might encourage extra business, but they will also affect the amount of profit you make.

If you deal only with business customers then you may well want to show VAT-exclusive prices. Many of your business customers will be VAT registered and will be able to claim back any VAT they pay on things like hire charges. However, if you also deal with private customers at the same outlet then the law says you need to show VAT-inclusive prices. As most tool hire shops have at least some private customers, the best policy may be to display both prices clearly.

Think about how you will market and promote your business, and about what messages you want to get across to potential customers.

The right image

People's first impression of your business will be influenced by the way it looks - so it is vital to project the right image. Try to keep your premises smart, clean and tidy. Use signs to indicate what tools are available and any other services you offer.

As well as a storage area, you will need a retail/display area, where customers can look at the tools available and you can offer them help and advice. You may well decide to display some consumables and items like safety equipment for sale in your retail area too. Provide some leaflets or posters about tool use and safety - a range of signs, posters, leaflets and marketing materials is available from the Hire Association Europe (HAE).

If you offer a delivery and collection service, bear in mind that your van can be a highly visible mobile advertisement for your business. Consider having the van sign written with your details and try to ensure that it looks smart and well-maintained.

Customer relations

Treating customers in a friendly, helpful and polite way is essential. Be prepared to explain to people how various tools work and advise them which will be the safest and most suitable for them to use. Make sure that people know how to use the tools they are hiring and if there is any doubt, offer to demonstrate. Provide printed safety sheets where appropriate and offer the necessary safety equipment for hire or sale. Make sure that the conditions of hire are clearly explained and there is no confusion over damage deposits or insurance cover if this is offered.

A good reputation can only be built over time, but from the outset you should aim to offer a high level of service and ensure customers are satisfied with the service they receive and the tools or other equipment supplied. It may be worthwhile giving your customers a bit of leeway over things like late returns - building up goodwill can pay real dividends when it comes to repeat business, customer loyalty and recommendations. Do your best to deal with any questions or complaints promptly and politely.

Quality standards

Joining a safety and quality accreditation scheme will demonstrate that your business is run to a high standard. Members of the HAE can apply to join the SafeHIRE scheme . This will involve a site assessment and unannounced test hires. Successful applicants earn the right to display a certification plaque and note their status as a member of the scheme in advertising literature. SafeHIRE certified members can also join the Contractors Health and Safety Assessment Scheme (CHAS) register as 'CHAS Accredited' businesses. This is used by many private companies, local authorities, government agencies and so on when shortlisting contractors or suppliers.

Advertising your business

It is important that you advertise your business so that potential customers know about you and the tools and services you offer. There are a number of things you can do to promote your business:

• set up a Google Business profile so that you appear in local searches
• your vehicle can be a very effective means of advertising if you have it sign written and keep it well-maintained and presentable
• use signs effectively to inform and attract passing trade
• advertise in your local newspaper and any local directories
• place an advertisement on Yell.com
• launch your own website to reach a wider market - particularly relevant if you offer specialist tools not usually stocked by others
• place advertising leaflets at local garden centres or builders' suppliers or mail them to local households

Members of the HAE are included in their online member database. This can be accessed by the public in order to locate companies in a certain area or dealing with a particular sector of the market. You can find out more about HAE membership and the SafeHIRE scheme on the HAE website.

Think about using social media, blogs, business directories and forums to market and promote your business.

You might decide to buy an existing tool hire business rather than start your own venture from scratch. Buying a going concern can mean that the products, customers, regular sales, staff, premises and equipment are already in place.

Buying a business  can be a hazardous, expensive process unless you have the right skills and experience on your team, including legal and financial know-how. Establish the genuine trading and financial position, so that the price you pay for the business is not too high.

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Equipment Rental Business

Back to All Business Ideas

How to Start a Tool and Equipment Rental Business

Written by: Carolyn Young

Carolyn Young is a business writer who focuses on entrepreneurial concepts and the business formation. She has over 25 years of experience in business roles, and has authored several entrepreneurship textbooks.

Edited by: David Lepeska

David has been writing and learning about business, finance and globalization for a quarter-century, starting with a small New York consulting firm in the 1990s.

Published on April 13, 2022

Investment range

$8,550 - $18,100

Revenue potential

$62,000 - $156,000 p.a.

Time to build

1 – 3 months

Profit potential

$50,000 - $125,000 p.a.

Industry trend

Important points to remember when setting up your equipment rental business:

• Market research — Identify your target market, understand their needs and preferences, and research competitors. 
• Define your niche — Decide on the types of equipment you will rent, such as construction equipment, party supplies, tools, medical equipment, or audiovisual equipment.
• Special permits — Depending on the type of equipment you rent, you may need additional permits or certifications, such as safety certifications for construction equipment .
• Sourcing equipment — Purchase high-quality, durable equipment from reputable suppliers. Consider buying new or used equipment depending on your budget and the expected demand.
• Inventory management — Implement an inventory management system to track equipment availability, rental history, maintenance schedules, and reservations.
• Register your business — A limited liability company (LLC) is the best legal structure for new businesses because it is fast and simple. Form your business immediately using ZenBusiness LLC formation service or hire one of the best LLC services on the market.
• Legal business aspects — Register for taxes, open a business bank account, and get an EIN .
• Partnerships — Build relationships with local businesses, contractors, event planners, and suppliers to generate referrals and collaborate on projects.

Interactive Checklist at your fingertips—begin your equipment rental business today!

You May Also Wonder:

Can an equipment rental business be profitable?

Yes, you can make good money from equipment rentals since your ongoing expenses will be low. The key is to purchase the equipment that people will be most likely to rent.

How do I handle maintenance and repairs for the rented equipment?

It is important to establish a maintenance schedule and set procedures for handling repairs, including regular inspections and preventative maintenance, as well as prompt response to customer complaints or concerns. 

Can I start an equipment rental business on the side?

Yes, it is possible to start an equipment rental business on the side, although it may require significant time and effort to manage both the business and your other commitments. It is important to carefully consider your available time, resources, and expertise, as well as the potential demand for your services and the competition in the market.

Are there any special considerations or regulations for renting out heavy machinery or specialized equipment?

Renting out heavy machinery or specialized equipment may be subject to additional regulations and safety requirements, depending on the type of equipment and the industry in which it is used. It is important to research and comply with all relevant regulations and safety standards, and to ensure that your staff and customers are trained and educated on safe operation and handling of the equipment.

How to increase customer retention for my equipment rental business?

To increase customer retention for your equipment rental business, you can focus on providing exceptional customer service, including prompt response to inquiries and complaints, flexible rental terms, and personalized attention to each customer’s needs. You can also offer loyalty programs or incentives for repeat business, and regularly communicate with customers to stay top of mind and offer new promotions or deals. 

Step 1: Decide if the Business Is Right for You

Pros and cons.

Starting an equipment rental business has pros and cons to consider before deciding if it’s right for you. 

• Good Money – Depending on the equipment, you can make hundreds a day
• Flexible – Run your business from home on your hours
• Minimal Labor – Pickups and drop-offs only
• Big Competition – Compete with companies like Home Depot
• Up Front Investment – Spend some money get started

Equipment rental industry trends

Industry size and growth.

• Industry size and past growth – The global equipment rental business was worth $53.2 billion in 2020, after more than a 60% decline from 2019 numbers.(( https://www.statista.com/topics/8063/equipment-rental-market-in-the-united-states/?#dossierKeyfigures )) 
• Growth forecast – The global equipment rental business is projected to grow more than 60% by 2023 to regain its 2019 total of more than $87 billion. 
• Number of businesses – In 2021, 10,873 tool and equipment rental businesses were operating in the US.(( https://www.ibisworld.com/united-states/market-research-reports/tool-equipment-rental-industry/ )) 
• Number of people employed – In 2021, the US tool and equipment rental business employed 27,798 people. 

Trends and challenges

Trends in the equipment rental industry include:

• More and more construction companies and builders are opting to rent large equipment rather than buy, which is good news for the equipment rental industry.
• The new infrastructure bill, which is driving the construction industry, is also expected to increase the equipment rental industry.
• DIY projects are trending, with homeowners attempting to do remodeling and repairs on their own, and these people tend to rent rather than buy tools and equipment.

Challenges in the equipment rental industry include:

• Evolving technology makes it necessary for equipment rental companies to periodically upgrade their equipment.
• New technologies are being used to track equipment, which is solving a consistent problem in the equipment rental business but is an added expense for rental companies to assume. 

How much does it cost to start an equipment rental business?

Startup costs for an equipment rental business range from $8,500 to $18,000, although the costs vary widely depending on the type of equipment. These calculations assume that you will start out with large tools such as chainsaws, tile saws, drills, power washers, and so on. Costs also include the down payment on a truck or van to transport your equipment. 

Be sure to have an equipment rental agreement in place that customers must sign, and it should include a liability waiver in case someone is injured by the equipment. Also, make sure that your equipment is properly insured. 

How much can you earn from an equipment rental business?

Daily rental rates for most smaller tools average about $40. Your profit margin should be about 80%. 

In your first year or two, you might have 10 pieces of equipment and rent six of them five days per week, bringing in more than $62,000 in annual revenue. This would mean $50,000 in profit, assuming that 80% margin. As your business gains traction, you could add 10 more pieces of equipment and rent 15 of them five days a week. With annual revenue of $156,000, you’d make a healthy profit of $125,000.

What barriers to entry are there?

There are a few barriers to entry for an equipment rental business. Your biggest challenges will be:

• The startup costs to purchase equipment
• The space to store your equipment

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Investing in Rental Properties: Your Business Startup Guide

Step 2: hone your idea.

Now that you know what’s involved in starting an equipment rental business, it’s a good idea to hone your concept in preparation to enter a competitive market. 

Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.

Why? Identify an opportunity

Research equipment rental businesses in your area to examine their products, price points, and what rents best. You’re looking for a market gap to fill. For instance, maybe the local market is missing a business that rents wet tile saws, or party supplies and party equipment like bouncy houses and karaoke machines.  

You might consider targeting a niche market by specializing in a certain aspect of your industry, such as construction equipment or larger tools for the do-it-yourself-er.

This could jumpstart your word-of-mouth marketing and attract clients right away. 

What? Determine your rental equipment

You’ll just need to determine what equipment you want to rent. You should specialize in a certain type of equipment so that you can focus on a certain target market. You might want to call construction or remodeling companies to see what they are most likely to rent.  Read how Lenny Tim innovated in the mobility scooter rental business and glean insights that could revolutionize your entrepreneurial approach.

How much should you charge for equipment rental?

Prices will vary based on the type of equipment that you rent. Check local market prices to make sure you’re competitive. You should aim for a profit margin of about 80%. 

Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.

Who? Identify your target market

Your target market will either be construction-related companies or homeowners. You should spread out your marketing to include TikTok, Instagram, Facebook, and LinkedIn. 

Where? Choose your business premises

In the early stages, you may want to run your business from home to keep costs low. But as your business grows, you’ll likely need to hire workers for various roles and may need to rent out a storage space for your equipment. You can find commercial space to rent in your area on sites such as Craigslist , Crexi , and Instant Offices .

When choosing a commercial space, you may want to follow these rules of thumb:

• Central location accessible via public transport
• Ventilated and spacious, with good natural light
• Flexible lease that can be extended as your business grows
• Ready-to-use space with no major renovations or repairs needed

Step 3: Brainstorm a Business Name

Here are some ideas for brainstorming your business name:

• Short, unique, and catchy names tend to stand out
• Names that are easy to say and spell tend to do better 
• Name should be relevant to your product or service offerings
• Ask around — family, friends, colleagues, social media — for suggestions
• Including keywords, such as “equipment rental” or “tool rental”, boosts SEO
• Name should allow for expansion, for ex: “Premier Rental Solutions” over “Power Tools Rental Solutions”
• A location-based name can help establish a strong connection with your local community and help with the SEO but might hinder future expansion

Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these. 

Find a Domain

Powered by GoDaddy.com

Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that sets your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.

Step 4: Create a Business Plan

Here are the key components of a business plan:

• Executive Summary: Summarize your equipment rental business’s goal to provide a wide range of quality, well-maintained equipment for short-term or long-term rental to various industries.
• Business Overview: Describe your business’s focus on renting out equipment such as construction machinery, event gear, or audio-visual technology to meet diverse client needs.
• Product and Services: Detail the types of equipment available for rent, including categories like heavy machinery, landscaping tools, party supplies, or audio-visual equipment.
• Market Analysis: Assess the demand for rental equipment, considering target markets like construction companies, event planners, or DIY homeowners.
• Competitive Analysis: Compare your rental offerings to other equipment rental businesses, focusing on your strengths like equipment variety, maintenance quality, or flexible rental terms.
• Sales and Marketing: Outline your strategy for attracting customers, including digital marketing, building relationships with industry professionals, or offering competitive pricing.
• Management Team: Highlight the experience and qualifications of your team, especially in areas like equipment maintenance, customer service, and business management.
• Operations Plan: Describe the process of equipment rental, from inventory management and maintenance to customer service and delivery logistics.
• Financial Plan: Provide an overview of financial aspects, covering startup costs, pricing strategy, and expected revenue.
• Appendix: Include supplementary documents such as equipment catalogs, maintenance records, or market research data to support your business plan.

If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.

Step 5: Register Your Business

Registering your business is an absolutely crucial step — it’s the prerequisite to paying taxes, raising capital, opening a bank account, and other guideposts on the road to getting a business up and running.

Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business! 

Choose where to register your company

Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you’re planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to equipment rental. 

If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state. 

Choose your business structure

Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your equipment rental business will shape your taxes, personal liability, and business registration requirements, so choose wisely. 

Here are the main options:

• Sole Proprietorship – The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
• General Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
• Limited Liability Company (LLC) – Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts.
• C Corp – Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation.
• S Corp – An S-Corporation refers to the tax classification of the business but is not a business entity. An S-Corp can be either a corporation or an LLC , which just need to elect to be an S-Corp for tax status. In an S-Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.

We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization , and answer any questions you might have.

Form Your LLC

Choose Your State

We recommend ZenBusiness as the Best LLC Service for 2024

Step 6: Register for Taxes

The final step before you’re able to pay taxes is getting an Employer Identification Number , or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN. 

Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.

The IRS website also offers a tax-payers checklist , and taxes can be filed online.

It is important to consult an accountant or other professional to help you with your taxes to ensure you’re completing them correctly.

Step 7: Fund your Business

Securing financing is your next step and there are plenty of ways to raise capital:

• Bank loans: This is the most common method but getting approved requires a rock-solid business plan and strong credit history.
• SBA-guaranteed loans: The Small Business Administration can act as guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan .
• Government grants: A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
• Friends and Family: Reach out to friends and family to provide a business loan or investment in your concept. It’s a good idea to have legal advice when doing so because SEC regulations apply.
• Crowdfunding: Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund your vision. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business.
• Personal: Self-fund your business via your savings or the sale of property or other assets.

Bank and SBA loans are probably the best option, other than friends and family, for funding an equipment rental business. You might also try crowdfunding if you have an innovative concept. 

Step 8: Apply for Licenses/Permits

Starting an equipment rental business requires obtaining a number of licenses and permits from local, state, and federal governments.

Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration ( OSHA ), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits. 

You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more. 

You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package . They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.

This is not a step to be taken lightly, as failing to comply with legal requirements can result in hefty penalties.

If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.

Step 9: Open a Business Bank Account

Before you start making money, you’ll need a place to keep it, and that requires opening a bank account .

Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your equipment rental business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.

Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account. 

Step 10: Get Business Insurance

Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.

Here are some types of insurance to consider:

• General liability: The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
• Business Property: Provides coverage for your equipment and supplies.
• Equipment Breakdown Insurance: Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
• Worker’s compensation: Provides compensation to employees injured on the job.
• Property: Covers your physical space, whether it is a cart, storefront, or office.
• Commercial auto: Protection for your company-owned vehicle.
• Professional liability: Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
• Business owner’s policy (BOP): This is an insurance plan that acts as an all-in-one insurance policy, a combination of the above insurance types.

Step 11: Prepare to Launch

As opening day nears, prepare for launch by reviewing and improving some key elements of your business. 

Essential software and tools

Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks. 

You may want to use industry-specific software, such as Rental 360 , EZ Rent Out , or Point of Rental , to manage your inventory, schedule, invoices, and payments. 

• Popular web-based accounting programs for smaller businesses include Quickbooks , Freshbooks , and Xero . 
• If you’re unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences for filing incorrect tax documents can be harsh, so accuracy is crucial. 

Develop your website

Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism.

You can create your own website using services like WordPress, Wix, or Squarespace . This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.

They are unlikely to find your website, however, unless you follow Search Engine Optimization ( SEO ) practices. These are steps that help pages rank higher in the results of top search engines like Google.

Here are some powerful marketing strategies for your future business:

• Strategic Partnerships: Forge partnerships with construction companies, event planners, or other businesses that frequently require equipment, offering them exclusive deals or discounts for consistent rental agreements.
• Social Media Campaigns: Leverage platforms like Instagram and LinkedIn to showcase your equipment in action, share success stories, and engage with your audience by running targeted ads to reach potential customers in your local area.
• Referral Programs: Implement a referral program that rewards existing customers who refer new clients, encouraging word-of-mouth marketing and building a strong network of satisfied clients.
• Local SEO Optimization: Optimize your online presence for local search by ensuring your business information is accurate and consistent across online directories, making it easier for potential customers in your area to find you.
• Specialized Equipment Packages: Create bundled packages for specific industries or events, offering a convenient and cost-effective solution for customers who may need a variety of equipment for a particular project or occasion.
• Community Involvement: Sponsor local events, join community groups, and participate in relevant industry associations to raise awareness about your business and build trust within your community.
• Online Reviews and Testimonials: Encourage satisfied customers to leave positive reviews on online platforms like Google, Yelp, or industry-specific websites, boosting your credibility and influencing potential clients.
• Seasonal Promotions: Introduce seasonal promotions or discounts during peak periods when demand for certain types of equipment is higher, attracting more customers during specific times of the year.
• Educational Content: Create informative content, such as blog posts, videos, or webinars, that educates your audience on how to use different types of equipment safely and effectively, positioning your business as an industry authority.
• Customer Loyalty Programs: Implement a loyalty program that rewards repeat customers with discounts, exclusive offers, or priority access to new equipment, fostering long-term relationships and customer retention.

Focus on USPs

Unique selling propositions, or USPs, are the characteristics of a product or service that set it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your equipment rental business meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire. 

Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your equipment rental business could be: 

• Rent top-of-the-line tools for your DIY projects
• Why buy when you can rent everything you need for your party?
• Heavy construction equipment at great rates 

You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running an equipment rental business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in equipment rental for years and can offer invaluable insight and industry connections. 

The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in equipment rental. You’ll probably generate new customers or find companies with which you could establish a partnership. 

Step 12: Build Your Team

If you’re starting out small from a home office, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for an equipment rental business include:

• Drivers – equipment drop-offs and pickups
• General Manager – scheduling, inventory management, accounting
• Marketing Lead – SEO strategies, social media

At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need. 

Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed , Glassdoor , or ZipRecruiter . Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent. 

Step 13: Start Making Money!

An equipment rental business is a great opportunity to start a company that can grow. You can run your business from home and make an excellent living. Start with small stuff, work your way up to larger items and someday your business could rival United Rentals, the largest equipment rental company in the world! 

Now that you understand the business of equipment rental, it’s time to head to the hardware store and start shopping so you can start your successful entrepreneurial journey.

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• Decide if the Business Is Right for You
• Hone Your Idea
• Brainstorm a Business Name
• Create a Business Plan
• Register Your Business
• Register for Taxes
• Fund your Business
• Apply for Licenses/Permits
• Open a Business Bank Account
• Get Business Insurance
• Prepare to Launch
• Build Your Team
• Start Making Money!

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Expert business plan and financial models

Tools Rental Business Plan Template & PDF Example

• September 4, 2024
• Business Plan

Creating a comprehensive business plan is crucial for launching and running a successful tools rental business. This plan serves as your roadmap, detailing your vision, operational strategies, and financial plan. It helps establish your tools rental business’s identity, navigate the competitive market, and secure funding for growth.

This article not only breaks down the critical components of a tools rental business plan, but also provides an example of a business plan to help you craft your own.

Whether you’re an experienced entrepreneur or new to the retail industry, this guide, complete with a business plan example, lays the groundwork for turning your tools rental business concept into reality. Let’s dive in!

Our tools rental business plan is structured to cover all essential aspects needed for a comprehensive strategy. It outlines the business’s operations, marketing strategy , market environment, competitors, management team, and financial forecasts.

• Executive Summary : Offers an overview of your tools rental business’s concept, market analysis , management, and financial strategy.
• Facility & Location: Describes the business’s operational base, amenities, and why its location is appealing to potential clients.
• Services & Rates: Lists the types of tools and equipment available for rent and the pricing structure.
• Key Stats: Shares industry size , growth trends, and relevant statistics for the tools rental market.
• Key Trends: Highlights recent trends affecting the tools rental sector.
• Key Competitors: Analyzes main competitors nearby and how your business differs from them.
• SWOT : Strengths, weaknesses, opportunities, and threats analysis.
• Marketing Plan : Strategies for attracting and retaining customers.
• Timeline : Key milestones and objectives from start-up through the first year of operation.
• Management: Information on who manages the tools rental business and their roles.
• Financial Plan: Projects the business’s 5-year financial performance, including revenue, profits, and expected expenses.

Tools Rental Business Plan

Fully editable 30+ slides Powerpoint presentation business plan template.

Download an expert-built 30+ slides Powerpoint business plan template

Executive Summary

The Executive Summary introduces your tools rental business plan, offering a concise overview of your business and its services. It should detail your market positioning, the range of tools and equipment you offer for rent, its location, size, and an outline of day-to-day operations.

This section should also explore how your tools rental business will integrate into the local market, including the number of direct competitors within the area, identifying who they are, along with your business’s unique selling points that differentiate it from these competitors.

Furthermore, you should include information about the management and co-founding team, detailing their roles and contributions to the business’s success. Additionally, a summary of your financial projections, including revenue and profits over the next five years, should be presented here to provide a clear picture of your tools rental business’s financial plan.

Business Overview

For a tools rental business, the Business Overview section can be concisely divided into 2 main slides:

Facility & Location

Briefly describe the tools rental business’s physical environment, emphasizing its organization, cleanliness, and overall functionality that appeals to clients. Mention the business’s location , highlighting its accessibility and the convenience it offers to clients, such as proximity to construction sites, residential areas, or ease of parking. Explain why this location is advantageous in attracting your target clientele.

Services & Rates

Detail the range of tools and equipment offered for rent, from basic hand tools and power tools to specialized equipment for construction, gardening, or home improvement projects. Outline your pricing strategy , ensuring it reflects the quality and condition of the tools provided and matches the market you’re targeting. Highlight any packages, membership deals, or loyalty programs that provide added value to your clients, encouraging repeat business and customer loyalty.

Market Overview

Industry Size & Growth

In the Market Overview of your tools rental business plan, start by examining the size of the tools and equipment rental industry and its growth potential. This analysis is crucial for understanding the market’s scope and identifying expansion opportunities.

Key Market Trends

Proceed to discuss recent market trends , such as the increasing consumer interest in DIY projects, home renovations, and sustainable practices in construction. For example, highlight the demand for high-quality, well-maintained rental tools and the preference for renting rather than buying expensive equipment. Emphasize trends like the growth in home improvement projects and the increasing adoption of advanced tools and technologies.

Competitive Landscape

A  competitive analysis  is not just a tool for gauging the position of your tools rental business in the market and its key competitors; it’s also a fundamental component of your business plan.

This analysis helps in identifying your tools rental business’s unique selling points, essential for differentiating your business in a competitive market.

In addition, the competitive analysis is integral in laying a solid foundation for your business plan. By examining various operational aspects of your competitors, you gain valuable information that ensures your business plan is robust, informed, and tailored to succeed in the current market environment.

Identifying Your Competitors in the Tools Rental Industry

The first step in a competitive analysis is to pinpoint your competitors. Begin by identifying other tools rental companies in your vicinity. If your business specializes in high-end power tools, your direct competitors include nearby tools rental businesses that offer similar products, as well as larger home improvement stores with rental services. Also, consider indirect competitors such as online tool rental services or equipment sales businesses that offer rental options.

Utilize online tools like Google Maps to visually assess the distribution of these competitors. Platforms like Yelp and other customer review sites can provide insights into the  strengths and weaknesses  of these competitors from user feedback. For instance, if a competitor consistently receives praise for its flexible rental terms and excellent customer service, these are significant competitive strengths.

Tools Rental Competitors’ Strategies

Analyzing the strategies of these competitors involves several key areas:

• Tool and Equipment Range:  Scrutinize the variety of tools and equipment they offer. If “ProTool Rentals” nearby is becoming popular for its comprehensive selection of construction equipment, it indicates a market trend or demand that you might need to address.
• Rental Terms:  Examine the flexibility and attractiveness of their rental agreements. A competitor like “EasyRent Tools” that offers customizable rental periods could appeal to a broad customer base, from professional contractors to DIY enthusiasts.
• Pricing Strategy :  Compare your pricing with those of competitors. Are your rental fees competitive with budget-friendly options like “Budget Tool Hire,” or do they align more closely with premium providers like “Elite Equipment Rentals”?
• Marketing Tactics:  Evaluate how competitors market their offerings. Do they leverage digital marketing, engage in local trade shows, or rely on partnerships with construction companies and local contractors?
• Customer Service:  Assess the quality of customer service. For example, “Helpful Hire” might be known for its knowledgeable staff and proactive customer support, enhancing the rental experience.
• Operational Efficiency:  Note if competitors utilize technology or innovative processes to improve service delivery, such as “Streamline Rentals” with its online booking system and mobile delivery service.

What’s Your Tools Rental Business’s Value Proposition?

Reflect on what sets your tools rental business apart. Perhaps you offer the latest in eco-friendly gardening equipment, or maybe your service includes free delivery and setup for heavy machinery.

Identify market opportunities through customer feedback and industry trends. For example, an increasing demand for smart home installation tools could represent a niche market if competitors have not yet tapped into this area.

Consider your location: A tools rental business in an urban setting might focus on light residential tools and small construction equipment, whereas one near industrial areas could specialize in heavy machinery and long-term leases.

First, conduct a SWOT analysis for the tools rental business, highlighting Strengths (such as diverse inventory and knowledgeable staff), Weaknesses (including high maintenance costs and limited brand recognition), Opportunities (for example, growing DIY trends and eco-friendly options), and Threats (such as economic downturns that may decrease consumer spending on rentals).

Marketing Plan

Next, develop a marketing strategy that outlines how to attract and retain clients through targeted advertising, promotional discounts, engaging social media presence, and community involvement.

Marketing Channels

Utilize various marketing channels to promote your tools rental business effectively, raise brand awareness, and attract customers.

Digital Marketing

Leverage the power of digital platforms:

• Website and SEO : Develop a user-friendly website showcasing your tool inventory, rental terms, and customer testimonials. Implement SEO strategies to rank higher in search engine results for relevant keywords.
• Social Media:  Utilize platforms like LinkedIn or industry-specific forums to engage with professionals. Showcase equipment demos, maintenance tips, and customer success stories on platforms like YouTube and Instagram.
• Email Marketing:  Build an email subscriber list and send newsletters featuring rental promotions, industry insights, and equipment updates.

Local Advertising

Target local audiences for increased visibility:

• Local SEO:  Optimize your online presence for local searches, ensuring your business appears in local directories and map listings.
• Community Engagement : Participate in community events, trade shows, or home improvement seminars to interact with potential customers and network within the community.
• Collaborations and Partnerships:  Partner with construction firms, event planners, or DIY workshops for mutual promotions or package deals.

Promotional Activities

Strategic promotions play a significant role in attracting and retaining customers for a tools rental business.

Special Offers

• Lifecycle-Based Offers:  Implement offers based on project timelines or seasons. For instance, offer discounts for longer rentals during slow business periods or tailored packages for seasonal projects like landscaping or home renovations.
• Educational Promotions:  Consider hosting workshops or webinars providing insights into efficient tool usage, maintenance tips, or project planning advice. These events can draw in potential customers and position your business as an industry authority.

Customer Loyalty Programs

• Tiered Benefits:  Expand loyalty programs to include tiered benefits where higher tiers unlock exclusive services or access to premium equipment. Make these programs aspirational, encouraging customers to strive for higher tiers.
• Feedback Integration : Use loyalty programs as a means to gather feedback. Encourage members to provide input through surveys or reviews, fostering a culture of continuous improvement.
• Referral Incentives:  Encourage existing clients to refer new customers by offering incentives such as discounts on future rentals or free tool hires.

Sales Channels

Optimize  sales channels  to maximize revenue streams and enhance customer satisfaction.

In-Person Sales

• Training and Knowledge Sharing:  Invest in ongoing staff training programs focusing not only on sales techniques but also on in-depth product knowledge. Empower staff to educate customers on tool functionalities and recommend the most suitable equipment for their needs.
• Customized Packages:  Tailor bundled packages or offers based on customer project requirements. Offer personalized recommendations that maximize the value of rentals for customers undertaking specific projects.

Online Rental Platform

• Ease of Use and Accessibility:  Continuously improve the online rental platform’s user experience. Implement features such as a mobile app, chat support, or a seamless checkout process to enhance accessibility and convenience for customers.
• Predictive Analytics:  Leverage predictive analytics to anticipate customer needs. Recommend complementary tools or accessories based on customers’ browsing history or previous rental patterns, facilitating upselling opportunities.

Membership and Loyalty Programs

• Exclusive Events and Benefits:  Organize exclusive events or training sessions for members, providing them with early access to new equipment or technologies. Offer members-only discounts on premium rentals or services, reinforcing their loyalty.
• Community Building:  Use membership programs to build a community around your brand. Encourage member interactions through forums, social groups, or networking events, fostering a sense of belonging and advocacy.

Strategy Timeline

Finally, create a detailed timeline that outlines critical milestones for the tools rental business’s opening, marketing efforts, client base growth, and expansion objectives, ensuring the business moves forward with clear direction and purpose.

The Management section focuses on the tools rental business’s management and their direct roles in daily operations and strategic direction. This part is crucial for understanding who is responsible for making key decisions and driving the tools rental business toward its financial and operational goals.

For your tools rental business plan, list the core team members, their specific responsibilities, and how their expertise supports the business.

Financial Plan

The Financial Plan section is a comprehensive analysis of your financial projections for revenue, expenses, and profitability. It lays out your tools rental business’s approach to securing funding, managing cash flow, and achieving breakeven.

This section typically includes detailed forecasts for the first 5 years of operation, highlighting expected revenue, operating costs and capital expenditures.

For your tools rental business plan, provide a snapshot of your financial statement (profit and loss, balance sheet, cash flow statement), as well as your key assumptions (e.g. number of customers and prices, expenses, etc.).

Make sure to cover here _ Profit and Loss _ Cash Flow Statement _ Balance Sheet _ Use of Funds

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How to Start a Tool Rental Business in 2024

Starting a tool rental business can open up a world of opportunities. It caters to a unique, high-demand market and provides a rewarding business venture that is both profitable and beneficial to your community. In this guide, we’ll walk you through the entire process of starting a tool rental business, equipping you with the knowledge you need to kick-start your entrepreneurial journey.

The tool rental industry is simple: tools, especially high-quality, professional-grade ones, can be expensive. For many people and businesses, investing heavily in tools they may only need once or infrequently doesn’t make financial sense. Here’s where tool rental businesses come in, allowing customers to access the tools they need without the hefty upfront cost and the burden of storage and maintenance.

Learn about your local tool rental market

The first step toward successfully starting your tool rental business is understanding your market in its entirety. Ask yourself: who are your potential customers? In most cases, your audience will span local construction companies, home improvement enthusiasts, and others who occasionally need specialized tools.

For instance, if you’re based in a rapidly developing city with many construction projects, there would likely be a high demand for construction-related tools such as jackhammers, concrete mixers, and power drills. However, if your locality is more residential with many homeowners, the market might lean more towards home improvement tools like lawnmowers, power washers, and gardening equipment.

Start your rental business for just $29/month

Put your toes in the water and test the demand in your area with a rental website for just $29/month.

• No credit card required

Choose what tools to rent out

The success of your tool rental business significantly relies on your tool inventory. It’s crucial to curate a selection of tools that align with your customer’s needs and preferences. Start by identifying the most commonly needed tools in your locality, from power drills for DIY enthusiasts to heavy machinery for construction projects.

While an extensive inventory may sound appealing, remember that each tool you stock represents an investment. Rather than offering an overwhelming variety of tools, focus on the ones that can maximize your customers’ value. For example, if you’re running a tool rental in a coastal town with a high incidence of hurricanes. In such a scenario, stocking up on chainsaws, generators, and heavy-duty pumps could be a wise move as these tools are often needed for post-storm clean-up.

Legal and regulatory compliance

Your business must comply with all necessary local, state, and federal laws to operate legally. This step involves choosing a suitable business structure (sole proprietorship, partnership, LLC, etc.), registering your business name, acquiring an EIN (Employer Identification Number), and obtaining necessary licenses and permits.

This part of the process can be complex, so we strongly recommend consulting with a business attorney or advisor to ensure you’re meeting all the legal obligations. Proper legal and regulatory compliance will protect your business in the long run and provide a solid foundation for your operations.

Start with building your rental website

Every new rental business starts with a website to get their first bookings.

Thoughtful tool rental pricing strategies

Developing a thoughtful pricing strategy is a delicate balance. While your prices must be competitive to attract customers, they must also cover overhead costs and ensure profitability. To determine your pricing, consider various factors, such as the cost of the tool, its lifespan, maintenance expenses, and existing market rates.

For example, if a power drill costs you $100 and has an expected lifespan of 100 rentals, you might price its rental at $10 per day to cover the cost and generate profit. However, if maintenance for the drill after each rental costs $2, you would also need to consider that in your pricing. A tiered pricing model based on the rental duration may also be desirable for customers who rent for longer periods.

Utilize the right tool rental software

To streamline your business operations, investing in a comprehensive tool rental software solution is a wise decision. The right software will automate inventory management, simplify booking processes, track tool maintenance schedules, and facilitate smooth financial transactions.

Choosing a user-friendly solution with robust features can significantly impact your business operations. Booqable offers features like real-time inventory tracking, online reservations, automated reminders, and integrated payments, making it easier for you to manage the day-to-day operations of your tool rental business.

Market your tool rental business

Marketing is the driving force behind attracting customers to your business. It starts with a professionally designed website that reflects your brand identity and provides essential information about your services. Optimize your website for local search engine results to ensure your business is easily found by customers in your area.

Diversify your marketing strategies by integrating social media advertising, content marketing, email marketing, and partnering with local businesses or construction firms. For example, a local home renovation company might be willing to refer their clients to your business in exchange for a small commission or preferential rates on their tool rentals. This sort of partnership can be a win-win situation for both companies.

Join thousands of rental business owners

In the last 12 months, hundreds of people have started their business with Booqable.

Champion customer service

Customer service is a cornerstone of any successful business. In the tool rental business, it becomes even more critical. From the moment customers inquire about the point they return the rented tool, strive to make their experience seamless and satisfactory. Customers want to rent from trustworthy people; a considerable part is being knowledgeable.

Train your staff to know your tools, respond promptly and courteously to inquiries, and resolve any issues or disputes professionally. This may include asking customers about their project, offering advice on using the tool effectively, and reassuring them that they can reach out if they encounter any issues. This level of service can turn a one-time renter into a loyal customer.

Filling a crucial niche

The tool rental industry is a crucial segment of the broader rental market, offering a unique service that fills a vital niche. This industry caters to a diverse clientele, from individual homeowners and DIY enthusiasts to professional contractors and large construction firms.

Starting a tool rental business within this burgeoning industry offers an exciting opportunity. By providing essential tools on a rental basis, you’ll cater to an underserved market, build a profitable business, and contribute to a more sustainable consumption model.

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Construction Equipment Rental Business Plan [Sample Template]

By: Author Tony Martins Ajaero

Home » Business ideas » Service Industry » Equipment Rental Business

Are you about starting an equipment rental company? If YES, here is a complete sample construction equipment rental business plan template & feasibility report you can use for FREE .

Okay, so we have considered all the requirements for starting a construction equipment rental business. We also took it further by analyzing and drafting a sample construction equipment rental marketing plan template backed up by actionable guerrilla marketing ideas for heavy equipment rental businesses. So let’s proceed to the business planning section.

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According to a facts report from the Equipment Leasing Association of America, close to 80% of businesses in the country rented or leased equipment on a daily basis, thereby making the business very lucrative for anyone intending to start the business.

The reason why many businesses are renting equipment is due to the fact that they do not consider it necessary or worthwhile to purchase heavy equipment for use either due to budget constraints or the fact that buying the equipment would be a waste of resources as regards to leasing it.

Due to the fact that this is a capital intensive business, you would need the input of an expert who is knowledgeable in the industry and who would carry out an analysis on your company in relation to your location to help you determine if going into the business would be a wise decision.

If the odds are for you, the consultant would then help draft strategies that would help make your business have an edge over others that you might likely be competing with in the same location or even industry. Asides from getting a business consultant to help you determine if going into the business is worthwhile, writing a business plan is another task you would need to undertake.

Below is a sample of an equipment rental business template that should guide you towards writing your own business plan for your equipment rental business;

A Sample Construction Equipment Rental Business Plan Template

1. industry overview.

The equipment rental industry according to IBIS World has several downstream businesses or industries that are its customers such as railcars, aircrafts, ships and drilling machineries.

The revenue from this industry amounts to $38 billion and the projected growth from 2011 to 2015 for this industry was pegged at 4.8%. There are more than 18,000 equipment rental businesses in the united states of America employing more than 78,000 people.

The last economic recession caused a slide in the industry’s revenue as few companies rented equipment during this period. However, according to statistics, the downstream sector will strongly drive the industry from 2016 to 2022.  Also, it is stated that construction and transportation industries will benefit from this strong projection in the next five years.

The equipment rental industry especially the heavy equipment is heavily fragmented as the four largest players in the industry, according to the industry’s 2016 revenue, account for close to 20.2%; other players in the industry operated in specialist markets or in disperse geographical locations.

However, as activities have dropped in the construction and transportation industries, it has caused many small players to exit the industry.

As at 2014, the construction equipment rental market globally was valued at over $4 billion and has been anticipated to go over $84 billion by 2022. This is due to the fact that construction activities were on the increase globally, especially as governments were investing in emerging economies.

The rental market for material handling has been anticipated to grow at 13% from 2015 to 2022 due to the fact that focus has been increased on automated production processes so as to efficiently use raw materials, resources and energy.

Demand for advanced machinery with eco-friendly as well as low maintenance features has continually grown and is likely to surge past demand for conventional equipment in the coming years. Also, another thing that responsible for a high adoption of rental products is the fact that consumers now have high purchasing power with a higher preference for rentals.

As at 2014, the earthmoving rental machinery market was valued at over $19 billion and was expected to see a significant growth of more than 12% by 2022. This is due to the fact that emerging economies have increased the demand for heavy equipment.

The equipment rental industry is very capital in nature and businesses in the industry are usually involved in mergers and acquisitions, strategic alliances and joint ventures so as to increase their penetration to their target markets.

2. Executive Summary

Tack Rentals (TR) is a standard and the exclusive go-to equipment rental business based in Atlanta – Georgia, USA and intends to rent its equipment to individuals and businesses. We also intend to sell some of our equipment and also become distributors for some major equipment manufacturing companies all over the United States of America.

Our vision as a company is to be the preferred equipment rental company here in Atlanta and also be amongst the top 10 equipment rental businesses in the United States of America by 2025. To ensure that we achieve the following vision and objectives, we intend to ensure that we build the best business structure.

Our equipment rental business is strategically located at Peachtree Street, NE in Atlanta and provides the required convenience for our various customers in easily locating us to make enquiries, buy or rent from us. Also, our online presence makes it quite easy for those who love shopping online to locate us, not only are we located on top of various search engines, we also respond promptly to any online enquiries.

Our equipment are of high quality and are designed to last for as long as possible, this is because we procure these equipment with our customers in mind, and we would want that the equipment they get from us carry out its tasks efficiently.

Our management team is the best that can be found as we carefully sourced for those who not only had an understanding of the industry, but who also believe in our core values and were willing to work to ensure we reached our attained height.

Our customer care teams are very knowledgeable about the trends in the industry and have been trained to understand the wants of our clients and ensure that it is fulfilled. All complaints are speedily attended to and resolved by our able customer care executives.

We know how important is it to garner promotion for a business and so we have drafted effective publicity strategies that will ensure that the business gets the awareness it deserves here in Atlanta as well as all over the United States of America.

Finally, our Chief Executive Officer, Mr. Rocha Taylor is one who has the necessary expertise to ensure that the business attains its goals and objectives as he has more than 10 years experience in the rentals industry and will therefore bring in some strategies that will ensure we come up tops above our various competitors.

3. Our Products and Services

Tack Rentals (TR) intends to deal in all sorts of services to its various customers in the target market. Our niche makes it very easy for us to be the exclusive equipment rental business here in Atlanta, Georgia.

However, instead of just providing core services to our customers, we intend to add other services to in order to gain more customers while also creating multiple sources of income. Our aim is to make profit as we legally can and as is permissible under the laws of the United States of America. Therefore some of the services and products we intend to offer are;

• Rentals of heavy equipment such as bulldozers, excavators , trenchers, and backhoes
• Sale of chainsaws, tillers and augers
• Distributor for several equipment manufacturing companies
• Equipment repair
• Consultancy and advisory services

4. Our Mission and Vision Statement

• Our vision is to be the exclusive equipment rental business here in Atlanta; and amongst the top 10 equipment rental businesses in United States of America by 2025.
• In order to achieve our goals and objectives, we intend to create a niche for ourselves in the area where we operate, so as to have little or no competition. We also intend to grow and expand as a company till we are known all over the United States of America

Our Business Structure

Having the right business structure is very important to us as a business, because we know that getting the business structure right will set us on the right path towards attaining success as an organization. It is for this reason that we would sources for and hire only the best employees that will help take our vision from where we are to where we intend to be.

We know how important it is to have the right management team that not only understands the core values of the company but also have the right knowledge and expertise to enable the company achieve its goals and objectives.

We are willing to pay all our employees well and also ensure that they are adequately trained so that they are able to handle the various responsibilities that would be assigned to them through our different sales and products offering. The training would also give them enhanced skills as well as increase their productivity for the overall benefit of the company.  Therefore, below is the business structure we intend to build at Tack Rentals (TR);

Chief Executive Officer

Rentals and Leasing Manager

Human Resources and Admin Manager

Maintenance Manager

Purchasing Manager

Marketing Executives

Accountants

Customer Executive Officers

Truck Drivers

Security Guard

5. Job Roles and Responsibilities

• Makes strategic decisions for the company
• Reviews company’s policies and growth and tweak ineffective strategies
• Meet with high-powered clients on behalf of the company
• In charge of all equipment that are rented by customers and ensure its proper documentation
• Checks the condition of outgoing and incoming equipment
• Liaises with the purchasing and maintenance managers to ensure that equipment procured is in line with industry trends
• Sources for and recruits the best employees for the available positions in the company
• In charge of employee training and welfare
• Conducts periodical performance appraisals on the employees on behalf of the company
• Checks the quality of new equipment and machineries
• Carries out light repairs on faulty equipment on behalf of the organization
• Works with team to effect repairs on customer’s equipment
• Sources for reliable vendors and suppliers on behalf of the organization
• Gets quotes for equipment and makes findings to ensure the company gets the best quote
• Liaises with the accountant to ensure that the right funds are transferred for the right equipment
• Conducts an in-depth analysis of the market to determine ways to penetrate the market
• Carries out one-on-one marketing on behalf of the company
• Reviews and discards ineffective marketing policies
• Prepares all accounting and financial information on behalf of Tack Rentals (TR)
• In charge of channeling funds for the procurement of equipment
• Prepares tax report for onward submission to tax authorities
• Possess updated information about the general equipment rental industry as well as Tack Rentals (TR)
• Attends to customers enquiries and complaints and ensure that they are promptly resolved
• Keeps and update an accurate customer database on behalf of the organization
• Ensures that the equipment arrives at its destination on time
• Inspects the offloading and on-loading of the equipment
•  Carries out light maintenance on truck
• Ensure that the premises is secured at all times
• Checks incoming and outgoing equipment and ensures that all documentation are in order
• Monitors the surveillance cameras to check if anything is amiss
• Ensure that the premises are kept clean before and after work hours
• Clean out the equipment store so as there won’t be buildup of dirt and grease
• Carry out any other tasks as might be assigned by the Admin Manager

6. SWOT Analysis

The SWOT ( Strength, Weakness, Opportunities and Threats ) analysis is usually a method that is used to evaluate the chances of a business’ survival. It is a necessary tool used to help the business understand and also carry out the best decisions on behalf of the organization.

In conducting a thorough analysis on our chances in the equipment rental business, we hired a reputable business consultant here in Atlanta who understands the business thoroughly and would evaluate our strengths and opportunities and use it to determine if they were worth more than our threats and weaknesses.

Below is the result from the SWOT analysis that was conducted on behalf of Tack Rentals (TR);

We have several strengths in our advantage and one of such is that we have competent employees that know how to handle our customers and also how to anticipate their needs, which is what our customers love most about us. Also, the fact that we can be found online and are actually responsive to enquiries and requests is one of our strengths.

Our brand is widely recognized in Atlanta which has led to more customers for us. Finally, our Chief Executive Officer, Mr. Rocha Taylor, has over 10 years experience in the equipment rental industry which is of a huge benefit to the business.

The fact that many businesses are into equipment rentals is a huge weakness for us as this would mean we would need to intensify efforts to get a good share of the target market that is already saturated. We however have strategies in place that would enable us make a huge impression on the public.

• Opportunities

The opportunities that abound to us in this industry stem from companies that will be looking to rent our equipment on a long term basis, thereby causing an increase in our revenue. There are also loads of people looking for advices on what equipment is best for use and whether they should rent or buy; these are opportunities we intend to use to our full advantage.

The threats we are likely to experience in this industry are from the arrival of new competitors who might be looking to grab a share of our target market by offering cheaper prices than what we were offering. Also, another threat we are likely to face is in having an economic downturn which will affect the rate customers lend equipment from us.

However, every business knows that it is likely to encounter threats during the start and running of the business and as a serious business we are fully prepared to handle every threat.

7. MARKET ANALYSIS

• Market Trends

The equipment rental business is one that has always been in demand and this is due to the fact that even though several individuals and companies require the use of heavy machinery to carry out certain tasks, they do not want to buy or have the means to buy such equipment.

Also, some of the heavy equipment are used few times by the end users and so there is no need to waste money purchasing these equipment only to use them once or a few times, hence the need to rent the equipment from rental companies.

However, any entrepreneur looking to go into this business must ensure that they think up innovative ways at earning money and staying on top of competition.

Equipment rental companies these days do not only rent out equipment, they are also involved in the sales of heavy and light equipment. Others also become distributors of some of this heavy equipment for equipment manufacturing companies.

This is so that they can gain a huge share of the target market, and keep generating revenue that would give them a healthy bottom line.

The use of the internet has made things quite easy for equipment rental companies, as most have built websites that has Search Engine Optimization (SEO) so that they could be amongst the top searches for customers who searched for equipment rental companies online.

There is also the trend of using online directories or paying Google so as to be able to appear in different forums, websites and blogs that register for Google’s Adsense. Asides this, owners of this kind of business always network with manufacturing companies as well as other stakeholders in the industry to help increase awareness about them.

8. Our Target Market

There are all sorts of people who make rent equipment for several purposes; this means that we cannot restrict our customers to a certain group as we have a huge target market to cater to here in Atlanta, Georgia.

Asides from having a large number of potential customers, we are also strategically located here in Atlanta, and have also chosen several other strategic locations in which to create awareness about Tack Rentals (TR). However to help us get a better perspective of our target market, we have carried out a market research that will not only help us understand their demands, but will also help us see what they would be expecting from us.

We therefore are in the equipment rental business to cater to the following group of individuals and industries according to our market research:

• construction industry
• agricultural industry
• Mining Industry
• Aviation industry
• Individuals and Businesses dealing In forestry
• Individuals and Businesses dealing in medical equipment
•  Waterways
• And other customers who generally lease heavy and light equipments for various activities

Our competitive advantage

Every business that intends to make profit knows that it is likely to have competitors and so it would be wise for such a business to set out competitive strategies that would ensure that it has an edge over its competitors either in the same location or in the whole industry.

With this, Tack Rentals (TR) has several competitive strategies which it intends to deploy against its competitors in the industry.

Our intention of being amongst the top ten equipment rentals in the United States of America and the only exclusive go-to equipment rental company here in Atlanta, Georgia means that we fully intend to deploy several strategies to ensure that we achieve this objectives, whilst maintaining a healthy bottom line.

Our different equipment are of high quality and so would not give our customers any hitches once they are being rented out. Not only do we stock the best equipment, we also ensure that our equipment are given a thorough inspection before and after use by our highly competent maintenance team.

Our customers would have the option of using our support personnel whenever they lease our equipment, this is so that any hitches that crop up during the use of our equipment would not only be speedily resolved but also recorded accurately for use by the company for future purposes.

Lastly, we offer the best customer care, the type that cannot be found anywhere in other similar start-ups in the industry. Our customer care executives are deeply knowledgeable about trends in the industry and are highly trained to handle our different types of customers no matter their temperaments.

9. SALES AND MARKETING STRATEGY

• Sources of Income

Tack Rentals (TR) is an established company in Atlanta, Georgia whose aim is to offer several services to its customers based within its target location.

We intend to give our customers several niche services that will ensure that they do not have to patronize our competitors, and that will also earn us income from various sources. Therefore, Tack Rentals (TR) will therefore generate income by offering the following services;

• Rentals of heavy equipment such as bulldozers, excavators, trenchers, and backhoes

10. Sales Forecast

The equipment rental business is such that will always grow especially as most businesses in America cannot go without leasing one or several equipment every day.  Our strategic location in Atlanta – Georgia has made us quite optimistic of generating revenue and making profit from the second year of operation and from which we can then grow and expand our business from there.

We conducted a critical analysis of our chances in the equipment leasing industry based on data and information that was gathered from several similar start-ups in the industry and based on our location as well. It is from this critical analysis that we were able to come up with the sales projections.

Below are the sales projections for Tack Rentals (TR) based on factors such as the location, positive state of the economy and lack of a competitor arriving during the stated period;

• First Fiscal Year-: $800,000
• Second Fiscal Year-: $1,600,000
• Third Fiscal Year-: $3,200,000

N.B: The above sales projections were carried out based on several facts and information from the industry. The above projections are based on the facts that there will be no change in the factors listed above. However, should any change occur either positively or negatively, it is likely to have an impact – increase or decrease – in the projected sales figures.

• Marketing Strategy and Sales Strategy

Even though the equipment rental business is a lucrative one, there are still several businesses within this industry collapsing and all because they did not carry out adequate marketing. Marketing is the process by which businesses research on and identify their target market so as to be able to draft the necessary strategies that would be effective on the identified target market.

Marketing is the major source by which a business makes its revenue to sustain and eventually expand it. Therefore, we have conducted a thorough marketing research on our target market and have identified several ways we would attract customers to our equipment rentals business.

To aid us in carrying out this market research, we sourced for the services of a reputable marketing consultant who is knowledgeable in this field to help us look over our market research and not only review it but also draft the right strategies that would see us standing out in our marketing campaigns.

Empowered to work with the hired marketing consultant is out marketing team, who understanding our corporate core values and foundation have to ensure that each marketing strategy promotes the company positively to existing and potential customers while also generating the intended revenue for the company.

We do not also intend to dismiss the importance of technology as we intend to incorporate it into our marketing strategies.

We are fully aware of the power of the internet and will deploy all means to ensure that we maintain a strong online presence that will be helpful when marketing our equipment rental business. Therefore, the marketing and sales strategies we intend to adopt for Tack Rentals (TR) are;

• Ensuring that we introduce our equipment rental business to all our target markets in our location by sending out formal letters that include our rates and a powerful brochure to the management of each companies
• Ensure that we thoroughly advertise our equipment rental business in local newspapers, magazines as well as on radio and television stations
• Make use of direct marketing for our equipment rental business
• Use our official website to market our equipment rental business
• Use our social media platforms – Facebook, Twitter and LinkedIn – to massively market Tack Rentals
• Ensure that we are listed on online as well as offline directories

11. Publicity and Advertising Strategy

Publicity and advertising is a very important aspect for any business that intends to play an active role in generating revenue whilst also creating the necessary awareness it needs for its brand. Due to this it is very essential that we carefully draft our publicity strategies that would project our image positively to our customers – existing and potential.

We have also hired a brand strategist who is quite knowledgeable about the industry and knows which strategies would likely be beneficial to us in the short and long run, to help look over our strategies and help to modify or draft new ones that we would implement in ensuring that Tack Rentals (TR) is not only known here in Atlanta but in other surrounding cities as well.

Therefore the platforms we intend to use in promoting and advertising Tack Rentals (TR) to our various customers are;

• Ensuring that we pay for Google Ads to help advertise our business on all web pages, forums and blogs that is guaranteed to give us the maximum exposure
• To sponsor relevant school programs that is related to equipment in our local community
• To place adverts in local newspapers, magazines as well as on radio and television stations
• To use the social media platforms, such as Facebook, Twitter and LinkedIn to massively educate people about the advantages of patronizing Tack Rentals (TR) as well promoting us as well
• To ensure that our billboards are strategically and conspicuously located all around Atlanta, Georgia
• To ensure that we distribute our handbills and paste our fliers in strategic locations

12. Our Pricing Strategy

We know how important pricing is to a company and so we intend to take our pricing strategy very seriously when it comes to setting the rates and prices for our customers.

We would give our customers an affordable price or rates for our equipment, and will ensure that the price given fetches us a good margin that will cover not only our overhead but our running costs as well. However, in order to attract customers to our business and make them loyal to us, we intend to reduce our rates during the first few months (3 months) of business.

The rates would not however be lowered to the point that they affect our business negatively, we would only be running on low margins. We would however raise our prices later so as to conform to what is obtainable in the rental industry.

• Payment Options

The days where there were only one or two ways by which customers could pay for services or a product is long gone as there are several available platforms available to suit the different needs of the customers. At Tack Rentals (TR), we are a business that understands that our customers might have different preferences and so we have different payment options available.

Therefore, the payment options we intend to offer all our various customers are;

• Payment via cash
• Payment via check
• Payment via bank draft
• Payment via Credit Card
• Payment via Point of Sale (POS) Machine
• Payment via online payment portal

The above payment options were carefully chosen by our bank and we have been assured that they will offer our customers no problems during transactions.

13. Startup Expenditure (Budget)

The equipment rental business is a capital intensive business especially if one intends to set up a business that is of a certain standard.

In generating start-up capital for our equipment rental business, it should be noted that the bulk of the capital would go into purchasing these heavy equipment, while the other heavy spending will be on paying employee salaries and bills. Therefore the key areas where we intend to spend our start-up capital on are;

• Total fee for registering the business in the United States of America – $750
• Obtaining of licenses, permits and accounting software as well as other legalities – $3,250
• Cost of hiring business consultant – $5,000
• Insurance coverage (general liability, asset insurance, workers’ compensation) – $3,000
• Cost of purchasing several equipment for business start-up – $600,000
• Operational cost for the first 6 months (employee salaries and utility payments) – $200,000
• Cost of leasing and renovating a facility for use for at least 1 year – $100,000
• Marketing expenses (grand opening party promotion and general marketing) – $10,000
• Other start-up expenses (furniture, stationeries, computers, printers, and phones) – $9,000
• Cost of store equipment (security, and ventilation) – $3,000
• Cost of purchasing two heavy duty transport trucks – $155,000
• Cost of launching a website – $1,000
• Cost of throwing a launching party – $5,000
• Miscellaneous – $10,000

From the above analysis, we would need the sum of $1,100,000 in order to not only start but successfully run our equipment rental business here in Atlanta, Georgia. It should be noted that the bulk of the capital will go into buying the heavy equipment that would be rented out to various customers as well as payment employee salaries and lease and furnish the facility we intend to use for our business.

Generating Funding / Startup Capital for Tack Rental Business

Tack Rentals (TR) is owned by businessman Mr. Rocha Taylor, who has over 10 years experience in the industry. In seeking for funds to start this business, Mr. Rocha intends to source for funds from different sources including the bank and external investors, so that his business can start off successfully. Therefore the areas where he intends to generate start-up capital for Tack Rentals (TR) are;

• Generate part capital from sale of personal stock and properties
• Approach the bank for a loan
• Approach a private investor for a loan in exchange for part equity

N.B: Mr. Rocha Taylor was able to generate $100,000 from the sale of personal stock and properties. The bank in which Mr. Rocha Taylor approached for a loan of $500,000 has given approval after verifying his documents. The loan from the bank will be repayable in 7 years with a 3% interest rate.

Mr. Taylor has additionally approached a private investor for the sum of $500,000 in return for 3% equity; the deal is nearly being done as both parties are waiting for the lawyers to fine-tune the agreement.

14. Sustainability and Expansion Strategy

A business that has no sustainability and expansion strategies has no future, and so because we have established our business not only to make profit but have a future as well, we intend to ensure that we implement our sustainability – employee competence, customers’ loyalty – and expansion – reinvestment – strategies to our advantage.

One first aim of sustaining our business is to ensure that we employ those who are very competent and have a good understanding of how to run the business. In a bid to ensure that the business runs smoothly, we intend to pay our employees well exactly what is obtainable in the industry for start-ups such as ours, and ensure we provide them with a great welfare package.

We intend to share our profits with our management team especially those who have shown a great commitment and zeal for at least a 3 year period; and we also intend to provide incentives by promoting lower end staff after conducting periodical performance appraisals.

Retaining our customers is such a big deal for us and we intend to ensure we deploy all the strategies that will make our customers stick to us.

We intend to offer them excellent customer care, by always listening and attending promptly to their complaints and also responding to whatever enquiries they might have. We will also reward loyal customers by providing discounts every now.

Having a healthy bottom line is important and so we would ensure that we re-invest part of our profit back into the company so that we do not need to source for external sources to fund our company all the time. We believe that once we apply these strategies, we would be able to not only sustain but also expand our equipment rental business as well.

Check List / Milestone

• Business Name Availability Check: Completed
• Business Registration: Completed
• Opening of Corporate Bank Accounts: Completed
• Securing Point of Sales (POS) Machines: Completed
• Opening Mobile Money Accounts: Completed
• Opening Online Payment Platforms: Completed
• Application and Obtaining Tax Payer’s ID: In Progress
• Application for business license and permit: Completed
• Purchase of Insurance for the Business: Completed
• Conducting feasibility studies: Completed
• Generating capital from family members: Completed
• Applications for Loan from the bank: In Progress
• Writing of Business Plan: Completed
• Drafting of Employee’s Handbook: Completed
• Drafting of Contract Documents and other relevant Legal Documents: In Progress
• Design of The Company’s Logo: Completed
• Graphic Designs and Printing of Packaging Marketing / Promotional Materials: In Progress
• Recruitment of employees: In Progress
• Creating Official Website for the Company: In Progress
• Creating Awareness for the business both online and around the community: In Progress
• Health and Safety and Fire Safety Arrangement (License): Secured
• Opening party / launching party planning: In Progress
• Establishing business relationship with vendors – wholesale suppliers / merchants: In Progress
• Purchase of trucks: Completed

Product Overview

• Inventory Management
• Booking & Scheduling
• Invoicing and Payments
• Rental Website Builder
• Quickbooks Online Integration
• Service and Repair
• SEO & Online Marketing
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• General Tool
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How to Create a Business Plan for a Construction Equipment Rental Company

No matter what kind of business you’re interested in starting, you’re going to need a well-put-together business plan if you’re going to succeed.

Not only is planning essential to your success, but it’s also something that any lender will have to see before providing a loan to start your business. With a good small equipment rental business plan, you can make a great impression and get the funding you need.

Your business plan should start with an industry overview, which serves as a sort of introduction. This brief section will discuss the general state of the construction industry to serve as a lead in to why you believe that your business will be profitable in this area.

The Industry Overview section should include some publicly available statistics on construction and rental industries, total revenue in the country and the state, growth percentages over the last few years, and other very general information at this point in your plan.

The Industry Overview

The executive summary.

The executive summary is just that, a summary. In this section, you can go over why you’re interested in starting a construction equipment rental company, what kinds of services you’re going to provide, and some details about your background.

While this is one of the first sections of any heavy equipment rental business plan PDF template , it’s often the best practice to write it last. Because it serves as an introduction to the remainder of the plan, you should have a very firm idea of what’s to follow.

Your Services

Next, you’ll need a thorough description of what your actual services are going to be. In the case of equipment rentals, you’ll describe that you’ll be acquiring equipment to rent to individuals and companies in your area.

At this point, you should consider if rentals are going to be your only service. Most rental businesses sell at least accessories for some equipment and often provide repairs as well. If you intend to provide additional services, you’ll have to include them here.

The Mission Statement and Vision

While this section might seem like a bit of departure from the more practical parts of the business plan, it is expected and will be included in any construction equipment rental business plan PDF templates.

Here, you’ll generally explain that your mission statement and vision are to provide quality service as a rental business and to thrive within the market. You don’t have to make up something about values or principles; you’re here to start a business.

The Structure and Roles

Getting back to the details of how your business is going to run, you’ll have to define what the roles in your company are going to be. Depending on the size of the business you’re setting up, are you going to be the CEO, owner, manager, or all three?

Small businesses could just be one person, or perhaps several who all share in a variety of duties. For larger endeavors, you’ll have to define roles like maintenance manager, rentals and leasing manager, and more.

The SWOT Analysis

SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. It’s a way of looking at your business to find which areas you believe you’ll excel in and which will present challenges.

For your strengths, you might like to mention any past experience in either equipment or business in general. You don’t want to go too far into your weaknesses, perhaps just mentioning that there are plenty of competitors, but make sure to mention how your business plans to differentiate itself.

Your Sales and Marketing Strategies

Here, you’ll have to explain how your business plans to present itself and put itself out there to get started and find customers. Some common strategies might include brochures, a website, social media, or ads in local print publications.

You should also specify who your target market is supposed to be. Are you exclusively renting heavy equipment to construction contractors? Are you renting smaller equipment to mostly homeowners?

Your Sales Forecast

When dealing with lenders, they’re going to want to know how much money your business plans on making. While determining these kinds of forecasts can be difficult, you can often base them on industry averages within your region.

These should be broken down by fiscal year, so basically stating what you forecast your sales to be in the first, second, and third years of operation. Any information about a similar business would be very helpful in putting this together.

Your Pricing Strategy

So you’ve acquired some equipment to rent out, but how much does it cost to rent? Are there additional fees? Do customers have to put down deposits? What payment methods are accepted? These are some important questions to answer in your pricing strategy.

This section should also reference the ratio between equipment costs and rental rates to demonstrate that equipment rentals will be profitable over the lifetime of the equipment.

Your Business Expenses

Of course, your business plan is going to have to include a breakdown of your expected expenses. This breakdown will have to include both the initial expenses of opening your business and the ongoing operational expenses you can expect to continue into the future.

Your startup expenses will play a big part in justifying any loans you’re seeking, and a well-defined explanation of operational expenses will play a big part in demonstrating that your business can be profitable.

If this all sounds like a bit much, you can greatly streamline the process of developing your equipment rental business plan by downloading our straightforward business plan template PDF.

Setting Up Your New Rental Business for Success With Quipli

Even with an effective business plan, your rental business needs careful oversight and the right tools to succeed. Quipli provides an integrated platform that combines your inventory management and online presence to make online bookings that much easier for your customers.

To find out more about the many features of the Quipli platform and what they can do for your business, Contact our Team at Quipli for a demo of online equipment rental checkout software t oday!

Get Started With Quipli’s Construction Rental Equipment Software Today

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About the author

Kyle Clements is the Founder & CEO of Quipli, a provider of modern software for independent equipment rental companies. Kyle has a decade of software startup experience and has been part of several successful ventures that have become publicly traded or been privately acquired, such as Uber and Clutch Technologies. In the past few years, Kyle has completed thousands of customer interviews understanding needs and trends in the growing equipment rental market. Kyle brings a unique perspective to the equipment rental industry and is passionate about partnering with independent equipment rental companies to run their operations more effectively and assist them in creating an impactful experience for their customers.

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Starting an equipment rental business here is our advice.

Are you thinking about starting a rental business? Get off to a great start with these tips!

It doesn’t matter whether you want to rent out camera equipment, bikes, luxury cars, party supplies, … Our advice will help you make your rental business a success.

Visit our Youtube channel  to watch more videos about equipment management!

1. Study your market

Starting the exact same business in two locations mere miles apart can lead to radically different results. A bike rental downtown will have different customers than one by the beach, and they will have different needs. So before you get started make sure that you know what your customers are looking for!

The best way to do this is quite simple – talk to them. If you want to rent out construction equipment, talk to local construction companies. Kayaks and canoes, talk to tourists, etc. Some questions you can ask:

• What kind of equipment are you looking for? Basic or high-end? Which brands or specific items are most and least popular?
• How much are you willing to pay? Instead of pulling a number out of a hat, get at least a rough estimate of how much your customers are able and willing to pay.
• Do you need more than rentals? Are there other services you can offer to become a one-stop shop for your customers?

Professional market research can quickly become expensive, but you can do a lot yourself!

2. Don’t buy more, buy smarter

By knowing your customers and what they are looking for, you can make smarter decisions about the equipment you buy. Avoid idle inventory at all costs – it only takes up space and money that you could use to grow your business!  Don’t overspend on equipment at the start: buy your minimum viable inventory based on your market research. Once you get started, buy more of the equipment that is most popular and lucrative. It is cheaper and easier to buy more equipment later than to get rid of excess unwanted equipment. To track what you have and decide what to buy, it's easier to use asset management software to stay ahead.

3. Find the best deal for your equipment

Unless you’re starting a rental business because you won the lottery and got bored, you’ll want to make the most of every cent or penny you spend.

Your equipment is likely to be one of your biggest investments, so make sure you invest your money wisely. Instead of blowing all of your money on the newest and best equipment you can find, consider your alternatives.

• What are your customers looking for? Will they be twice as happy if you spend twice as much? Don’t buy high-end if they are looking for budget rentals.
• Can you buy used equipment? This can save you a massive amount of money, allowing you to buy more equipment or invest in other areas.

4. Treat your equipment right

Your business depends on your equipment – no equipment, no rentals! That is why it is so important that you take good care of your equipment inventory:

• Regular maintenance – spot & fix potential problems before your customers do!
• Prompt and thorough repairs – fix any issues quickly and thoroughly so they don’t cause you more trouble in the future.
• Cosmetic fixes – your equipment shouldn’t just work like new. It should look like new as well! Make sure you create a good impression for (potential) customers.

Take care of your equipment, and it will take care of you!

5. Stake your claim online

The good news first: you don’t need to invest a massive amount of time, money, and effort into creating your website. It is vital, however, that you have an online presence and that when people visit your site, you create a good impression. The first thing your potential customers will do is search for information online. That is why you need:

• A professional-looking website that shows you can be trusted
• With the information customers need – what and how can they rent from you?
• That is easy to find online – even the best website is useless without visitors!

Looking for more information about setting up your own website? This article provides a more comprehensive overview . Creating a presence on social media is important as well. If you rent to other businesses, they are less likely to check Facebook for options, but they might look on LinkedIn. Here is some advice on using social media for your small business . Even with social media, your own website is your most important online property – it is your home online, that is fully under your control. So make sure it reflects well on you!

6. Create partnerships

Start by asking yourself, ‘What other products or services are my customers looking for?’ If you are starting a bike rental shop, your customers might also need:

• Places to stay – hotels, bed & breakfasts, …
• Places to visit- nature parks, museums, …
• Things to do – amusement parks, shopping malls, restaurants, …

Contact these companies or organizations and ask them if they would be interested in a referral partnership: if someone asks for a bike rental, they refer them to you. And if someone asks you for a place to stay, eat, or visit, … you refer them to your partners.

By referring customers to each other, you create a win-win-win situation.

• You and your partners get more customers
• Your customers quickly and easily get the products or services they need

The referrals you make reflect back on you – so only make recommendations that you feel confident about! The last thing you want is customers complaining about the advice you gave them. This advice is valid for other industries as well – e.g. if you are starting an AV or party rental business, your customers probably need catering and a venue.

7. Find the right tools for your business

As a small business owner, you need to take care of more than just renting equipment. Accounting, communication with (potential) customers, managing employees, … As luck would have it, we have created a list of business applications that we recommend . Every application on this list is designed to help you manage your small business!

8. Get your paperwork in order

Not the sexiest of topics, but an important one! The work you need to do depends on where you are based ( here is an overview for starting a new business in the US ) Besides the formalities of starting any business, a rental business has extra insurance liabilities. Your entire business depends on non-employees interacting with your equipment.

So while you want to make sure you have good insurance for your equipment, your customers are your biggest risk. Even with no-liability waivers, make sure you have the right insurance. You don’t want one big hospital bill to jeopardize your entire business!

9. Treat your customers right

Rentals are repetitive – your customers only rent your equipment for a period of time, so if they need it again in the future, they have to rent it again. Make sure that when they rent again, they come to you!

• Be more than just a place to rent – make your customers feel welcome and give them relevant advice and guidance alongside friendly service
• Create a hassle-free experience – don’t overwhelm your customers with procedures and paperwork
• Don’t wring out every last cent – would you rather make another $2 once or have your customers return and keep spending their money?

At the same time, don’t neglect general customer service.

10. Create a waterproof agreement

Do you think customers enjoy arguing with you? And do you enjoy arguing with them? The answer to the first question is ‘no’, and ‘no’ should be your answer for the second question as well. But what can you do to avoid arguments?

Make sure you and your customers are on the same page.  Sign a check-out agreement !

• How should the rental equipment be treated – what is acceptable wear and tear?
• When and where does the rental agreement end and start?
• What should the customer do if something goes wrong?
• What are the penalties for damage, loss, theft, late returns,…?

Clearly communicate the answers to these questions upfront to avoid confusion and conflict later on. Have these terms in writing as well, signed by both you and the customer. Be thorough & complete, and don’t ‘hide’ anything in the small print. If you make something hard to read, don’t be surprised if your customers don’t read it!

The final step: bring everything together

If you’ve followed all of this advice, you should have a pretty good idea by now about what you should do to make your new rental business a stunning success. But don’t just keep it in your head! Bring it together in a business plan for your rental business – a rental business plan. A business plan is essential for the success of your business. Remember the old proverb – failing to plan is planning to fail. So here is some advice from the US Small Business Administration on creating a business plan!

These are our tips for starting your own equipment rental business. We hope that this guide has been helpful to you.

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9 o-col-12 s-wysiwyg"> faq on starting a rental business, do i need much equipment to start a rental business.

Don’t overspend on equipment at the start: buy your minimum viable inventory based on your market research. Once you get started, buy more of the equipment that is most popular and lucrative.

How to take care of my equipment inventory

Assure regular maintenance; Do prompt and thorough repairs, fix any issues quickly and thoroughly. Do cosmetic fixes- your equipment shouldn’t just work like new, it should look like new as well.

How to be a good rental business

Create partnerships with locals or companies with which you can exchange referrals, help each-other out. Be good to your customers, meaning hassle-free with friendly service and don’t go after their money.

Don't bother with copy and paste.

Get this complete sample business plan as a free text document.

Equipment Rental Sales Business Plan

Start your own equipment rental sales business plan

Equipment Rental

Executive summary executive summary is a brief introduction to your business plan. it describes your business, the problem that it solves, your target market, and financial highlights.">.

Equipment Rental, Inc. (ER) is a Breaux Bridge, Tennessee company that sells and rents heavy equipment such as dozers, backhoes, excavators, and trenchers as well as small home use and construction equipment such as tillers, augers, and chain saws.

ER has obtained the authorization to be a distributor for Hancor Pipe, Stone Equipment, Pro-Cut Diamond Products, Echo Lawn Care, Compact Excavators, and Skid Steer Loaders. The company is the only authorized distributor for the South-Tennessee area for Ramrod Equipment and Komatsu Forklifts.

ER has a world-class management team with direct knowledge of the industry, extensive research experience, and unique administrative skills. Its team includes Mr. David James and Mrs. Sally James. Having lived in Denton Parish for six years, and worked throughout the state, as well as parts of Texas, Mississippi, Alabama, and Georgia, President/CEO, Mr. James has compiled an extensive list of customers/potential customers, vendors, and contacts for equipment consignment.

The company plans to employ two people from the area, in positions within the shop. By employing local individuals, ER would be contributing toward the development of the area. Funds would remain in the area thereby boosting the economy and contributing to the community as a whole. Loyal customers help to expand the company’s business area by word-of-mouth and a pocketful of ER’s business cards.

A key component of the company’s strategy is to continue to add to its ever-increasing product line which currently includes homeowner equipment from Echo and Interstate Batteries, commercial, equipment from Ramrod, Compact S/I Technology, and industrial equipment from Komatsu.

The company is seeking a loan/credit line in the amount of $300,000 for the purpose of expanding the business. Expansion plans include the purchase of additional land and construction of a larger shop/service area, increase rental inventory, purchase of delivery truck, and the hiring of additional personnel including a mechanic and delivery driver. Projected revenues for Year 1 to Year 3 are $210,000, $420,000, and $840,000, respectively.

1.1 Mission

ER’s mission is to become THE exclusive full-service equipment rental, sales, and service company in upper and lower Denton Parish with the ability to service the surrounding parishes of Memphis, Knoxville, Grand Prairie, Plano, Garland, Irvine, and Riverside. Therefore the company’s strategy is to create a limited geographical niche for itself where there are no potential competitors.

ER’s vision is to continue to expand its service to other areas. The company’s coverage area is constantly increasing, as the areas are becoming aware of the company’s presence.

Company Summary company overview ) is an overview of the most important points about your company—your history, management team, location, mission statement and legal structure.">

ER began its operations on May 2, 1997 with little capital investment. The company combined 10 years of experience in the sales and rental field to generate a large customer base. After eight months of operations at the present facility, the company has increased its customer list by 100% and its vendor list by 75%. ER takes pride in having brought several new items to this area that were otherwise unknown, such as the spreader/grader and Ramrod products.

2.1 Company Ownership

ER was founded in Memphis, Tennessee in May 1997 to sell and rent heavy equipment, small home use machines, and construction equipment. The company was formed by Mr. David James and Mrs. Sally James. ER is a Tennessee S-Corporation, with principal offices located in Memphis, TN.

2.2 Locations and Facilities

The company has one office currently in Memphis, TN.

ER is located 1/2 mile from the Interstate (I-65) with easy access and a large turnaround area for larger vehicles used in pick up and delivery of equipment. ER is not inside any municipal jurisdiction which would restrict the type of business being conducted. The location also benefits from easy access to hotels (1/2 mile), banks (less than 1/4 mile), groceries (1/8 mile), repair shops (1/4 mile), service stations (1/8 mile), and a parts supply house (1/3 mile).

Currently, there are no environmental concerns, but the company hopes to be able to have a repair shop located on the premises at which time any environmental concerns will be seen to. ER’s current hours of operation are from 8:00 a.m. until 5:00 p.m. However, the company does receive after hours calls and provides assistance as needed. Work hours have sometimes extended from 5:00 a.m. to later than 6:00 p.m. as needed.

2.3 Past Performance

The following is the company’s past three years of performance since start-up.

2.4 Future Facilities

There is 1/2 – 1 acre of additional property directly to the north side and is available for the construction of a storage/equipment yard if necessary. Mr. James has worked with a steel building construction company and is able to purchase items to construct a building at cost or at a sufficient discount that it would not be necessary to use the greater portion of the loan for building needs. The estimated cost of building is expected to be between $10,000 and $13,500. ER has access to a main highway with concrete entrances to and from the property.

ER sells and rents heavy equipment such as dozers, backhoes, excavators, and trenchers, as well as small home use, and construction equipment such as tillers, augers, and chain saws. ER takes pride in having brought several new items to this area that were otherwise unknown, such as the spreader/grader and Ramrod products.

3.1 Product Summary

Interstate ER carries a range of Interstate equipment including:

• Megatron Plus – 72 month;
• Megatron – 60 month;
• Light truck and van (LTV);
• Interstate – 50 month;
• Extreme performance;
• Interstate – 50 month (imported cars);
• Special use – lawn and garden, etc.;
• Marine/RV – 12 volt;
• Commercial – Very HD 12 volt;
• Commercial – 6 volt;
• Commercial – 8 volt special duty.

Komatsu ER carries gasoline, diesel, LPG, and electric forklifts from Komatsu. The benefits of Komatsu products include:

• Low noise designs reduce operator fatigue;
• Non-asbestos brakes;
• Open mast designs for excellent visibility;
• Heavy-duty air filtration systems with high air intake for extended engine life;
• Easy access to mechanical components.

Ramrod ER carries a series of Ramrod Taskmaster products that are designed for any task. They include:

• The post hole auger (9″ and 12″) – can dig up to 60 holes in one hour;
• 32″ forks – mini fork lift;
• Leveller – for back landscaping;
• The trencher – the attachment of choice for digging trenches;
• Hay and mower fork – horse and cattle stall cleanup;
• Scattrack. ER carries a series of mini excavators and skid steer loaders with various attachments;
• Hydraulic breakers – for breaking concrete, rock, or other hard surfaces;
• Trenchers – for installing electric lines and underground cables;
• Pallet fork – for handling heavy palletized material;
• Grapples – for clean up of loose, bulky, or baled materials;
• Augers – for digging holes and wide trenches in tight areas;
• Angle blade – for grading;
• Mini excavator – for construction, landscaping, and utility applications;
• Trimmers and bushcutters and accessories;
• Tiller/Cultivator;
• Power blowers and accessories;
• Hedge clippers;
• Power pruners and accessories;
• Chain saws;
• Safety accessories.

3.1.1 Future Products

Stone ER anticipates carrying a series of Stone products including:

• WolfPac asphalt rollers;
• Rhino ride-on vibratory dirt rollers;
• Bulldog trench rollers;
• Hydroblend continuous mixers.

3.1.2 Product Support

ER is also listed on the bidder list for several states and receive bid packages by mail, fax, and email which is checked daily. The company is currently on the Atchafalaya Basin Development Committee mailing list and is working with the Henderson Area Committee.

Market Analysis Summary how to do a market analysis for your business plan.">

The company expects to participate in a variety of different industries, including commercial and residential construction and farm machinery. The following sections will describe the industries in which ER hopes to compete.

4.1 Target Market Segment Strategy

ER currently has customers in the industrial and commercial fields, petro-chemical plants, contractors, sub-contractors, oil fields, and municipalities, with expansion potential in other areas. The Market Analysis table below gives the total potential number of businesses that could rent or buy our equipment in the local area.

4.2 Market Growth

Most of ER’s client industries such as the petro-chemical and farm industries have flat or very slow growth because these are mature or declining industries. However, often times there are other factors that make them attractive in the long run. The farming industry is heavily subsidized by the government and many of the farms in the local area are small plots with less than 100 acres. This means that most are poorly capitalized and seasonally require heavy equipment for planting and harvesting. This makes for an excellent cash-cow type client.

The one industry that can be counted on to grow significantly for the short-term is the contractor/commercial construction industry. The housing boom of the past five years has produced annual growth rates ranging from 5-10%. In evaluating our total market we plan to concentrate on this industry as our primary target market.

4.3 Marketing

The overall marketing plan for ER’s products and services is based on the following fundamentals:

• The segment of the market(s) planned to reach.
• Distribution channels planned to be used to reach market segments: television, radio, sales associates, and mailings.
• Share of the market expected to capture over a fixed period of time.

Market Responsibilities ER is committed to an extensive promotional campaign. This will be done aggressively and on a broad scale. To accomplish initial sales goals, the company will require an extremely effective promotional campaign to accomplish two primary objectives:

• Attract quality sales/service personnel that have a desire to be successful.
• Attract customers that will constantly look to ER for their projects.

In addition, ER plans to advertise in magazines, newspapers, television, radio, and on billboards throughout the state.

Promotion In addition to standard advertisement practices, ER will gain considerable recognition through these additional promotional mediums:

• Press releases sent to major radio stations, newspapers, and magazines.
• Radio advertising on secondary stations.
• Incentives. As an extra incentive for customers and potential customers to ER’s name, the company plans to distribute coffee mugs, T-shirts, pens, and other advertising specialties with the company logo. This will be an ongoing program for the company, when appropriate and where it is identified as beneficial.
• Brochures. The objective of brochures is to portray ERs’ goals and products as an attractive functionality. It is also to show customers how to use the latest in technology as it relates to construction and building services. ER will develop three brochures: one to be used to promote sales, one to use to announce the product in a new market, and the other to recruit sales associates.

Investment in Advertising and Promotion For the first year of operation, advertising, and promotion is budgeted at a combined total of $14,000. A fixed amount of sales revenues will go toward the state ER advertisement campaign. On an ongoing basis, ER feels that it can budget advertising expenses at less than 10% of revenues to ER.

4.3.1 Pricing

Currently, ER maintains a commercial credit department for business customers with a 1% net 30-day limit. This loan will enable the company to establish its lending ability but will be structured so as not to hamper its ability to assist other customers (due on receipt with approved credit references). Most of ER’s customers choose to deal with their own financial sources, however ER does have several financial sources to choose from, thereby giving them references should it become necessary to do so.

The company offers competitive prices, which are subject to review when necessary. ER has done sufficient work in this area to know that it can place a markup on merchandise and still retain sufficient funds to be competitive. Knowledge of market and competitor prices gives ER the advantage of pricing in-line with competitors. ER suppliers have and will continue to supply products that enable the company to meet the customers price range.

Most companies have a 15-20% markup on their merchandise. Having worked for most of the larger companies in the area, Mr. James has an advantage of knowing which companies are firm with the prices and how much others will decrease their prices. Several companies do not have a working list of rental prices and change with the market thereby causing a delay of several hours or even days to allow for a check of existing rental rates.

At ER, pricing is derived from an American Rental Association (ARA) formula used to price sales and rental items in relation to cost and resale/use value.

4.3.2 Marketing Communications

The company’s promotional plan is diverse and includes a range of marketing communications:

• Trade shows. Company representatives will attend and participate in several trade shows, such as Lagcoe.
• Print advertising. The company’s print advertising program includes advertisements in the Denton Parish newspaper, church bulletin, Denton Economics 101 directory, and restaurant menus in Memphis and Denton Parish.
• Festivals. The company plans to take part in various local shows.
• Additional methods include:
• Yard signs – changed on a two week rotating schedule.
• Magnetic signs – for trucks.
• Business cards.
• Sponsoring baseball and soccer teams.

4.4 Industry Analysis

Industry Description (information provided by imarketinc.com)

Market size statistics – Industrial trucks and tractors Establishments primarily engaged in manufacturing industrial trucks, tractors, trailers, stackers (truck type), and related equipment used for handling materials on floors and paved surfaces in and around industrial and commercial plants, depots, docks, airports, and terminals.

Market size statistics – Farm machinery and equipment Establishments primarily engaged in manufacturing farm machinery and equipment including soil preparation machinery, for use in the preparation and maintenance of the soil, planting and harvesting of the crop, preparing crops for market on the farm, or for use in performing other farm operations and processes.

Market size statistics – Construction machinery Establishments primarily engaged in manufacturing heavy machinery and equipment, such as bulldozers, concrete mixers, cranes.

4.4.1 Market Statistics

The market in ER’s area is very large with new construction being at an all-time high. ER is in need of inventory to be able to supply the local area and neighboring communities. The company has been able to sub-rent some equipment but would like to obtain certain items to put into its fleet thereby increasing profit margins. ER plans on offering a substantial line of equipment for rental and sales to meet customer needs as well as service for the equipment and those owned by others in the area.

The housing industry has proceeded at a red-hot pace for several years running. An all-time record was set in 1998, when 886,000 new-site single family homes were sold. That represented a 10% gain from the robust total of 804,000 homes sold in 1997, and an 8.1% rise from the prior record of 819,000 units in 1977. Single-family housing construction accounted for $47,539 million of the total $124,953 million generated in the industry.

Home sales were strengthened even further during most of 1999’s first 10 months. In that period, new single-family home sales increased by 4.8% on a year-to-year basis, to 791,000 units, according to the U.S. Department of Commerce. Through October 1999, seasonally adjusted sales had exceeded 800,000 on an annualized basis in every month since the start of 1998.

The record setting string of home sales since the second half of 1997 has forced builders to pick up the pace of their construction activity. During 1998, total starts increased by 9.7% to 1.62 million units. Starts for single family units moved up 12% for the year, and those of multi-family units were ahead by 1.5%. As an indication of building activity at year-end 1999, housing starts in November 1999 came in at a seasonally adjusted annual rate of 1.6 million units.

Market size statistics – Single-family housing construction General contractors primarily engaged in construction of single-family houses.

Market size statistics – Residential construction, nec General contractors primarily engaged in construction (including new work additions, alterations, remodeling, and repair) of residential buildings other than single-family houses. This includes hotels, motels, apartments, and multi-family homes.

Market size statistics – Heavy construction, nec General and special trade contractors primarily engaged in the construction of heavy projects not elsewhere classified. This includes canal, drainage system, athletic and recreation facilities, land preparation, rock removal, waste water and sewage treatment plant, and trenching construction.

Market size statistics – Bridge, tunnel, and elevated highway construction General contractors primarily engaged in the construction of bridges, viaducts, elevated highways, and pedestrian and railway tunnels.

Market size statistics – Highway and street construction General and special trade contractors primarily engaged in the construction of roads, streets, alleys, public sidewalks, guardrails, parkways, and airports.

Market size statistics – Nonresidential construction, nec General contractors primarily engaged in the construction (including new work additions, alterations, remodeling, and repair) of nonresidential buildings other than industrial buildings and warehouses. This includes commercial, institutional, religious, and amusement and recreational buildings.

4.4.2 Competition and Buying Patterns

ER’s closest competitors are located in Memphis Parish. They include the following five companies:

• CBC Equipment;
• Northern Equipment;
• Jones Rental Service;
• Rental Service Center;
• Memphis Rental.

Being located in or near Memphis, they charge a drop off and/or pick up fee. ER can, in most cases, wave this fee which will allow the customer more funds to purchase/rent additional equipment.

Strategy and Implementation Summary

The company plans to rapidly develop marketing alliances with industry leaders and pursue new sales of homeowner, commercial, and industrial equipment. The market strategy is to capitalize on ER’s ever-increasing customer base and contacts by offering the latest products and personalized service.

The company’s goal in the next year is to obtain financing which will allow for expanding the shop/service area with up-to-date servicing equipment, hiring additional employees, and obtaining a delivery truck as well as rental and sales inventory for all aspects of the company’s customer base.

The company’s goal in the next two to five years is to hire additional employees, concentrate on customer service, and promote the company and the environment that has allowed for this increase in service by way of discounts and promotional specials that will benefit the company and the customer.

5.1 Competitive Edge

• Obtain financing. The company is currently working to obtain financing that will enable it to carry out its operations.
• Expansion. ER is currently in need of property for expansion and display, rental and sale, and to increase its product line. Storage is a constant problem without a building and additional land to met ER’s current needs.
• Purchase additional equipment. Most previous equipment purchases have been for resale/consignment, and the markup has not allowed for a great increase in supplies.
• Hire more employees. The company plans to employ two people from the area, in positions within the shop. They will be responsible for maintenance, repair, and delivery. This will enable Mr. and Mrs. James to focus on the core of the business.
• Increase advertising. The company is currently working to expand its advertising campaigns. The company has designed a tri-fold brochure that will make people in the area aware of its product offering and how it can meet their needs.
• Establish more alliances. ER has contacts with several companies with floor plans, which will enable the company to stock several of their items for resale. The company plans to purchase some of their products, leaving them to furnish the display equipment.

5.2 Marketing Strategy

The company has strategic alliances with the ARA. This alliance is valuable to ER because the company gets to air television ads, and they are valuable to the ally firms because they are promoting a local company and this helps in community development. ER plans to also form strategic alliances with Internet sites, area publications, and other equipment dealers.

Sales Forecast forecast sales .">

The following table and charts show the Projected Sales Forecast for Equipment Rental.

Management Summary management summary will include information about who's on your team and why they're the right people for the job, as well as your future hiring plans.">

7.1 personnel plan.

ER’s management is highly experienced and qualified. Its key management team includes Mr. David James and Mrs. Sally James.

Jointly, they are responsible for processing quotes, arranging financing, as needed, scheduling invoices for pickup and delivery, and contract sales/rentals.

Descriptions of the management team and responsibilities are as follows.

Mr. David James. Mr. James has 10 years of marketing experience, 15 years rental/sales experience, and 15 years mechanical experience.

Mr. James makes all decisions concerning equipment purchases, as this is his area of expertise. Mr. James is in charge of obtaining all equipment for sales and rentals, completing contracts, working up quotes, setting up delivery of merchandise, arranging financing as needed, contacting customers, and verifying pickup and delivery.

Mrs. Sally L. James. Mrs. James has 10 years secretarial experience and 12 years accounts payable and receivable experience.

Mrs. James answers the phone, faxes, does all the computer work, files any monthly or quarterly tax forms, compiles correspondence as needed, accounts receivable, accounts payable, meets with a bookkeeper for end of year tax return, keeps all office needs running smoothly, filing, typing, copies, and is majority stock holder in the company (45%).

Future plans call for the hiring of a mechanic and shopman with hopes of adding a truck and delivery driver shortly there after from the area, with additional office/shop personnel to be added as needed.

On occasion part-time personnel will be used and job training provided through the area schools for those interested in this area of the job market.

Financial Plan investor-ready personnel plan .">

ER was capitalized with $5,000 when it was formed in May 1997. A strong knowledge of the area and supply and demand needs led to the formation of the company. Most items purchased to this date (truck, trailer, computer, office supplies, envelopes, and stationery) have been financed through personal funds, and a $4,000 line of credit with Hibernia Bank.

ER’s first sales placed $5,145 into the business account, most of which was used to pay off initial purchases with the balance being used for office and truck expenses such as telephone bill, postage, and fuel. As of April 1, 2000, the truck has been paid in full along with several of the smaller home use items. The company has generated sales in the amount of $52,490 with cost being $38,870 and a profit of $13,620 (97-98 Income Tax Return).

Funding Requirements and Uses The company is seeking a loan/credit line in the amount of $300,000 for the purpose of expanding the business. Expansion plans include the purchase of additional land and construction of a larger shop/service area, increase rental inventory, and hiring of additional personnel including a mechanic and delivery driver. The table below provides a breakdown of the use of funds.

Use of Funds

Shop equipment to include: air compressor, air tools and accessories, blow torch, welding machine and accessories, 1 1/2 ton chain hoist, oil/water separator, holding tank, assorted hand tools, washing vat, chain saw sharpener and repair accessories.

Rental inventory to include: Trash and diaphragm pumps 2 ea. 2″ and 3″, 3/4″ submersible pump and accessories, 3 hp. concrete vibrator, 2-48″ concrete power trowels, Case 580L or JD 310 Backhoe, small trailer and larger trailer, 1-ton Ford F350 or F450 Diesel delivery truck, air compressor, 90 lb. air hammer and accessories, rotovator for tractor, 1 push mower, 1 lawn tractor.

8.1 General Assumptions

The following table lists the general assumptions.

8.2 Key Financial Indicators

The following chart shows the important benchmarks for Equipment Rental.

8.3 Break-even Analysis

The table and chart below contain the Break-even Analysis for Equipment Rental.

8.4 Projected Profit and Loss

The Projected Profit and Loss can be seen in the following table and charts.

8.5 Cash Flow

The following table and chart are the Projected Cash Flow figures for Equipment Rental.

8.6 Projected Balance Sheet

ER’s projected balance sheets for 2000-2002.

8.7 Business Ratios

Business ratios for the years of this plan are shown below. Industry profile ratios based on the Standard Industrial Classification (SIC) code 7359, [Equipment Rental and Leasing, nec], are shown for comparison.

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