The equipment rental business can be a solid source of passive income, and most importantly, your investments will always be safe. You can begin as a one-person entrepreneur, and later on, you can form a small-sized company. You May not even know how much equipment rental companies earn. So, what should be your rental business model, and what factors can hinder your path? Let’s share with you the whole blueprint of the rental business in this post.
Did You Know?
In 2020, the construction equipment rental market was worth ₹11000 crores 2020. The experts expect this industry to thrive at more than 4.5% CAGR from 2021 to 2027. The development of public infrastructure and Increasing government expenditure on smart cities are propelling this industry growth.
How to Start an Equipment Rental Business?
Research Your Market
Establishing this business in two different parts can result in dramatically different results. Downtown bike rentals will attract different customers than one at the beach.
They will also require different services. Before you start, make sure you know what your clients are looking for.
The most effective method for doing this is simply speaking to them. If you're looking for renting machinery, talk with local construction companies. Some questions you can ask are:
- What kind of equipment are you searching for? High-end or basic? What brands or particular products are the most well-known to you?
- What amount are you prepared to spend? Instead of picking the number from a speculatory perspective, try to get at least an estimation of the amount your customers will pay.
- Do you require more than just rentals? Are there additional services you could offer to create an all-in-one shop for your clients?
Also Read: How to Get an Unsecured Machinery Loan in India
Don’t Buy More, Buy Smarter
After you identify your customers' needs for machinery, you can find better options for the equipment you purchase. Beware of the use of idle inventory as it will eat up space. It will also cost money that could be used to expand your company!
Don't go overboard with purchasing equipment when you first start a rental business. Buy your minimum viable stock based on your market study, and when you're ready, buy more equipment that is the most sought-after and profitable.
Find the Most Affordable Price for Your Equipment
We are sure that you're not launching a rental company because you have won the lottery. You'll need to get the most value from every penny you spend.
Your equipment will be among your largest investments, so make wise investment choices. Instead of spending all your cash on the latest and top equipment you could locate, think about alternatives.
- What do your customers search for? Don’t purchase expensive items if they are seeking budget rental equipment.
- Do you have the option of purchasing second-hand equipment? This could help you save a significant amount of money and allow you to purchase more equipment or even invest more in different areas of your business.
Take Care of Your Equipment
Your rental business depends on an unwritten rule. No equipment, no rentals!
This is why it's vital to maintain the inventory of your equipment:
- Rapid & in-depth repairs: Repair any problems quickly and thoroughly so that they do not cause more problems in the future.
- Cosmetic upgrades: The equipment you have should perform like new and should appear new! Be sure to make an impression that pleases potential customers.
Be Respectful Towards Your Customers
Rentals are a recurring business. Customers only lease the equipment you provide for a certain amount of time, and they may require it in the future. So, they will need to rent it again. Make sure that next time they come to you!
- It's more than just renting equipment. Make your guests feel comfortable and offer them the right advice and direction, and provide generous service.
- Make your customers' experience easy. Do not overwhelm the customers you serve with documents or processes.
What Equipment Should You Select Before Launching the Equipment Rental Business?
Mini Excavators are used in the construction industry. You could consider it to be tiny construction equipment as it can be found in various locations worldwide. Certain machine-intensive countries use it extensively with a high labour force, and labour costs are less expensive than machines.
If you are interested in the specifications, you'll discover that the machine is offered in 2 ton and 8-ton capacities. Numerous construction equipment manufacturers construct this type of machine.
Manufacturing Companies that produce this type of machinery include Hyundai, Hitachi, Kubota, CAT, JCB, Deere, SANY and Yanmar.
The Walk Behind Roller (Padfoot Drum Roller) is a vibrating roller. This will help in the compaction of asphalt and soil. It is among the most famous equipment when we talk about renting machinery. It is generally used for smaller construction sites, where work is minimal, for example, the construction of gardens. Also, it is not widely used. It is possible to find numerous brands worldwide that are manufacturing this type of machine. Walk-behind rollers use their weight and vibrating to compress the area that is being rolled onto.
Manufacturing Companies: Dynapac, JCB, Wacker Neuson, Atlas Copco
Vibratory Tamping Rammer
Vibratory tamping rammer comes in two kinds of rammer installed in excavators for rock breaking and another type of rammer used to compact the soil and asphalt. A battery and diesel power the rammers. Hermann developed this vibratory rammer in the year 1930. It is small construction equipment commonly used on construction sites.
Manufacturing Companies: Masalta, Honda, Wacker Neuson, Mikasa and a few local brands.
The light tower is one of the most important pieces of construction equipment used in many construction sites. You'll be amazed to learn that it is manufactured in the hands of some top construction equipment manufacturers worldwide. We can find light towers in mining areas that require temporary construction sites for roads, where construction continues simultaneously as per the needs.
A great benefit is that it runs on diesel, so it's possible to use it anywhere inside. This is one of the smaller construction machines through which a company or an individual can generate rental income.
Manufacturing Companies: Wacker Neuson, Magnum, Terex, Ingersoll Rand, Baldor, Mobilight and Allmand.
Also Read: Government Loan Schemes for Small Businesses In India
What are the Advantages of the Construction Equipment Rental Business?
- There is no cost depreciation for rented construction equipment
- You are protected from market fluctuations
- Reduces the initial purchase price for a customer when they rent an equipment
- Reduces the amount of capital investment
- It results in less cost for maintenance and repairs.
- Solutions to storage problems for equipment are reduced
- Reduces the cost of transportation
- Helps to finish short-term tasks quickly
- It puts an end to the worries about resale
Turning a rental business into a stunning success story isn’t as simple as you think. Do your market research. Keep in mind the requirements of the locals, and build your rental business based on fulfilling those requirements. If there’s some high-level construction plan to begin in your area, it can be a sweet chance for you to begin the construction equipment rental business.
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