business plan for a construction equipment rental company

Construction Equipment Rental Business Plan [Sample Template]

By: Author Tony Martins Ajaero

Home » Business ideas » Service Industry » Equipment Rental & Leasing 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.

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

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Guide To Starting A Profitable Equipment Rental Company In 2021

Sept. 18, 2021

The equipment rental industry has outgrown the overall construction industry over the past few decades. Learn how you can start your own equipment rental company.

Equipment Rental Industry Overview

Owning and operating an equipment rental business can be very rewarding and profitable. Many equipment rental business owners started out with one used machine, and gradually built up their businesses through hard work, great customer service and maintaining a fresh and healthy equipment fleet.

Starting an equipment rental company is not as expensive or encumbering as you would think. With some careful planning, initial capital, and passion for the industry, you can start your own equipment rental company in a few weeks.

The equipment rental industry has grown at about 5% per year over the past few decades. The outlook for the industry is very positive, with many industry experts forecasting 4-5% annual growth over the coming years. The long-term shift by contractors to rent more equipment is causing the equipment rental industry to outgrow the overall construction industry.

Equipment Rental Industry Market Share

The equipment rental industry is very fragmented - this means that the vast majority of industry sales are generated by small and medium-sized rental companies. According to the American Rental Association (ARA), the top 10 equipment rental companies have about 35% market share, and the top 3 companies have about 25% market share.

The largest North American equipment rental companies include United Rentals , Sunbelt Rentals , Herc Rentals , Home Depot Rentals , and Ahern Rentals . The total annual industry sales are over $50 billion, and the long-term growth rate is about 5% per year.

Source: United Rentals and Equipment Radar Takeaway: The top three industry players have a 25% combined market share. This means the industry is very fragmented and comprised mostly of small and medium-size companies.

Source: United Rentals , American Rental Association (ARA) , Rental Equipment Register (RER) , and US Census Bureau Takeaway: The US Equipment Rental industry size is over $50 billion, with a growth rate of about 5% each year.

Source: United Rentals, ARA, RER, and US Census Bureau Takeaway: The US Equipment Rental industry has outgrown overall construction spending since 1997.

Equipment Rental Covers More Than Just Construction Machinery

Many equipment rental companies augment their equipment fleets to include general tools, HVAC, power generation, and event (party, wedding, concerts, etc) equipment.

The ARA segments the rental industry into three primary categories:

• Construction and Industrial Equipment: This category primarily serves construction firms and contractors. Equipment typically includes earthmoving equipment such as excavators, loaders, backhoes and compaction machinery, light towers, aerial work platforms. This segment can also include road infrastructure, energy projects, commercial buildings, malls, demolition and more.
• DIY General Tool Equipment: This category includes equipment typically rented by professional contractors and do-it-yourself (DIY) homeowners. Equipment includes small and light construction equipment such as power tools, air compressors, aerators, lawn tractors, compact tractors, skid-steer loaders and small excavators, etc.
• Party/Wedding/Event Equipment: This category includes equipment rented by consumers, homeowners and businesses for parties and events. Items can include tents, tables, chairs, lights, dance floors, decorations, linens, plates and glassware, portable restrooms, concession equipment, inflatables (moonwalks), and other furniture. Projects can range from large corporate events to small family gatherings.

When you start your rental company, you can choose to serve one or more categories. Many established rental companies offer an all-in-one stop rental offering. You should research your local market demand for each category to understand which suits your local market best.

Aerial lifts and earthmoving equipment tend to be popular categories for equipment rental companies. When you choose your categories, you should study the local rental rates, seasonality (demand fluctuates through the year based on weather and construction patterns) and competition.

Herc Rentals Equipment Fleet Mix

Source: Herc Rentals Takeaway: Large rental companies such as Herc Rentals have diverse fleets. Both United Rentals and Herc Rentals have placed increased focus on expanding into the specialty rentals category over the past few years.

Equipment Rental Customers

The equipment and event rental industry offers customers the opportunity to gain the benefit of using goods (from excavators and aerial lifts to party tents) for a defined time. Customers are attracted to rentals instead of purchasing equipment for multiple reasons, including:

• Control expenses and inventory
• Wide selection of equipment
• Professional customer care / service
• No need for maintenance or downtime
• Save on storage / warehousing
• Reliability
• Equipment tracking
• Conserve capital
• Manage risk

Customers can range from professional contractors who need aerial lifts for several months to an average homeowner who needs a stump grinder for a weekend project.

Steps to Starting Your Equipment Rental Business

1. business plan.

Every great business out there today started with a simple idea. To transform that idea from something imaginary into something real, you should make a business plan that outlines your strategy and thoughts. Writing a business plan is one of the best ways to force yourself to think about your business from many angles. It also is a helpful document to share with potential investors and lenders.

When you create your business plan, it is important to keep your expectations realistic. Setting goals and metrics too high at the beginning can lead to wasted time and money down the road. Remember that there are always unforeseen costs and challenges with any new venture, so it is prudent to bake in padding and leeway.

A typical business plan includes the following sections:

• Summary: Wait to write this at the end. This is the 30,000-foot view of your entire business plan summarized in a few paragraphs. This helps others understand the business plan without reading the entire document.
• Company Description: Write about what your company will do, who it will involve (you and any others), where it will be located, what kind of equipment you will buy for your fleet, what hours you plan on working, etc.
• Market Analysis: Understand the rental industry in your area. Get to know the rental rates in your area. Talk with people in the industry to understand who your main customers would include.
• Competitive Analysis: List out the competition, what they do, how big they are, and how you plan to offer a better value proposition.
• Product/Service Offering: Determine which types of equipment you will offer for rent. Also, make a road map of where you plan on expanding as your business grows. Will you offer parts and service too?
• Marketing Plan: Figure out how you will tell the world about your new company. Create social media pages and advertise in local publications. Make sure you add your business to online directories such as Google Maps and the Equipment Radar Directory so people can find it.
• Financial Plan: Spend a lot of time thinking about the capital resources you have to deploy and how you plan on deploying them. Most equipment rental companies borrow money from banks to make new and used machinery purchases. Figure out which lenders you can work with to buy your machinery.

2. Form Your Company

You should create a legal entity such as a corporation or LLC to separate your business interests from your personal interests. You must register your business with your state, pay a registration fee, and also register with the IRS . Once you have formed your company, you should open a bank account and deposit initial capital into it.

3. Purchase New or Used Equipment For Fleet

Many newly-formed rental companies start with just one used machine, and later they upgrade and expand their fleets over time. You can shop online for new and used equipment to buy your first equipment.

4. Create Safety & Risk Management Plans

Buy proper insurance to cover your business from accidents and injuries. Talk with your business insurer, so you understand what is covered and what is not covered.

Create safety guidelines for your shop, and teach employees how to handle the equipment safely. Make sure any dangerous areas in your storage or warehouse are safeguarded.

5. Organize Business Operations

Choose a store location. You will need enough space to store your equipment, an office area for you and other workers to work, a service area, a check-in/out counter to handle customers, and a showroom for equipment, accessories and more.

A nice-looking showroom can be a strong selling point for your business. It gives your customers an opportunity to look around and see what you have to offer. You should think of your showroom as your marketing platform.

6. Make Maintenance & Fleet Refresh Plan

You should pay close attention to the condition of your fleet. Inspect it after every rental, and perform both scheduled and unscheduled maintenance as needed. The top-performing rental companies typically have a systematized process to inspect, clean and renew equipment after it is returned from a job site.

As your equipment begins to age, you should consider selling your older equipment and buying newer equipment to keep your overall rental fleet relatively new. Large rental companies typically target an average fleet age of about 50 months (4 years old), which means that they sell equipment when it gets to be about 7-8 years old. Customers often prefer newer equipment that looks good.

Financial Planning

Rental rates.

Rental rates are often determined by local supply and demand for rental equipment in your area. Rates go up and down based on time of year, type of equipment and equipment condition.

Rental rate changes are very important to monitor. Each $1 change in rental rate is a $1 increase or decrease to the bottom line. When your rental rate changes, your other costs do not change much.

Typically most companies will provide daily, weekly and monthly rental rates. As the rental term extends, the average daily rate tends to go lower. Weekly and monthly rentals can often be more profitable for equipment rental companies even if their average daily rental rates are lower because there are not as many inefficiencies associated with them (transportation to and from the location, downtime for inspection and servicing, etc).

Utilization

Utilization is an important metric that you should watch carefully. Higher utilization typically means higher profitability. The equipment rental business is largely a fixed-cost business - your equipment, building lease, employee costs all stay about the same whether you have your equipment out on rent or not.

Utilization is a two-edged sword. If your utilization is too high and you do not have any equipment available for rent, then customers may be forced to go with a competitor. It's best to increase your fleet size if utilization goes too high, and reduce your fleet size if your utilization goes too low.

Seasonality

Construction tends to be very seasonal, depending on your geographic location. You should research the swings in seasonality to understand business trends during the busy summertime and slower wintertime.

Cyclicality

Equipment rental is susceptible to economic cycles. When the broader economy slows and construction pulls back, the demand for rental equipment also slows. Typically rental rates will soften or fall during a downturn.

Rental Industry Terms & Metrics

The industry uses several common terms to measure equipment fleets and financial performance. Below is a list created by the ARA to help you get acquainted with industry standards:

Original Equipment Cost (OEC)

Time (physical) utilization (tu), financial utilization ($u), fleet age (age), change in rental rate %rr.

Keeping a fresh fleet that is well-maintained and serviced is very important to managing customer relations and expectations. Typically rental companies will target an average age for the entire fleet. By regularly buying newer equipment and selling older equipment, the rental company can maintain a constant fleet age.

Below is a sample overview of United Rental's fleet statistics from its 2020 annual report :

Starting your own equipment rental company is within the realm of possibilities. Spend time researching your local market and creating a business plan, and soon enough, you will be ready to launch your new venture.

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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

Learn about Quipli’s rental software

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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Construction Equipment Rental – Profitable Business Plan

Construction businesses require heavy equipment for several tasks. And it is not always possible to purchase this bulky equipment and block their finances and space. So instead, they will prefer to rent the heavy equipment and return it to the company once their job is done. Hence, more and more construction businesses are looking for corporations that can provide them the requisite equipment on a rental basis. 

Well, if you decided to go into the heavy construction equipment rental business, congratulations! You are good to go! But you are supposed to remember a few facts about this venture. For instance, remember that it is a capital-intensive business. If you have limited capital, you cannot think of diving into this business. Secondly, it is advisable to seek the advice of a consultant or an advisor regarding the planning and implementation matters.

You cannot simply start this business just because an idea stuck with you. You ought to do your research and feasibility studies and not miss out, a lot of business planning before starting this venture. 

Writing a business plan is crucial , and that’s why we are here to help you out. Follow the below business plan sample that will help you in starting the business.

Construction Industry Overview 

The revenue generated out of the construction equipment rental is a whopping $38 billion and is projected to grow at the rate of 4.8 percent in the last five years. You can find more than 18,000 equipment rental businesses in the United States. Since construction activities have been on the rise in the country due to several factors, there is a surging demand for related equipment hire. 

But one has to note that there is more demand for hi-tech machinery that is also eco-friendly and has low maintenance elements. Compared to the demand for traditional equipment, the demand for such advanced yet sustainable equipment can be seen on the rise. Consumers have higher purchasing abilities to rent the equipment instead of buying it. 

Executive Summary 

Being a standard and registered business, your company should have a unique yet easy-to-recollect name and must have a good location in a city where construction activities can be seen in a large number. The next thing is to specify your services, intentions, work values, and ethical standards, promises, and other aspects that will drive the person’s attention reading your business plan. It should also serve as a motivating factor for the business partners in the future when they lose the energy to carry forward the business. 

Mention all the driving factors, including the experience and qualifications of the owners involved in the business. You can also write down the work standards you will be following while delivering service and client support as and when needed. 

Services 

The equipment rental services provided by your company are of all types and are time-bound. The intention is to generate profit but as per the laws defined by the United States. 

• To provide equipment on the rental basis such as trenchers that are useful for construction companies. 
• To sell materials and tools such as chainsaws. 
• To distribute equipment for all manufacturing companies. 
• To repair equipment and tools set up at the manufacturing units of companies. 
• To train staff on how to use certain equipment as it is rented to them. This ensures that you will get your equipment back in order and not with issues. 
• To provide consultancy and advisory services accordingly. 

Mission Statement

To set unique goals and objectives for the business, to thrive and be the number one in the relevant business, and create no competition in the industry. To become a well-known rental brand in the country.

To be the best equipment rental business in the city, and rank in the top equipment rental businesses in the United States in the coming five years.” 

Business Structure – Jobs and Responsibilities 

The business structure consists of several job positions and responsibilities that can be created to provide your specific products and services to the customers. Remember that you will need a huge number of manual staff as well as skilled staff to carry out the said duties and responsibilities. 

• CEO – The pioneer, he is the person to evaluate, monitor, and take over project work. 
• Manager – Rental and Leasing – He will handle the given projects, allocate resources, and check at each stage whether the project is at par with the expectations or not. 
• Manager – Maintenance and Purchasing – He will be responsible for the purchase and maintenance of the said equipment. 
• Truck drivers, security guards – they are required for the said tasks. 
• HR Executive – He will handle the administrative as well as recruitment and selection of staff activities. 
• Marketing Executive – A business needs to be promoted, and a marketing executive knows how to do it. 
• Accountants – They will process accounts and financial statements on a per-project basis and as a whole. 
• Client Executive Officers – They will communicate with the clients on behalf of the company. 

SWOT Analysis 

This assessment tool seems to be classic as it still helps a business gauge its abilities and discrepancies without lowering morale. 

• Strengths – Online available, easy response to the queries, a keen desire for customer requirements, and more prior experience in the rental industry. 
• Weaknesses – Chances of saturation of the businesses and insufficient finances. 
• Opportunities – Long-term goals, advisory services, and other opportunities. 
• Threats – Competition and economic recession. 

Market Analysis 

Even if the name says you need to rent equipment, you can indulge in several activities such as the sale of heavy equipment, distribution services, advisory and consultancy, and training services. It doesn’t have to be limited to rental activities. The following target audience will be interested in availing your services: 

• Construction companies and agricultural entities. 
• Mining and aviation industry. 
• Business organizations are involved in the supply of medical devices, forestry, and other equipment. 
• Waterways and railways. 
• Households. 

Business Sales Forecast 

If you have planned to provide all the services mentioned in the Services Section of this business plan, you shouldn’t aim less. You should raise your revenue standards as you can expect clients and businesses all the time availing your services. 

It could be $800,000 in the first year, and you can double it in the following years. But ensure that you have a solid marketing and sales strategy going in hand with the sales objectives you set. 

Sales, Marketing, and Advertising Strategies 

You should know to hit the hammer at the right place. It means if you are into the rental business, you should target only those companies who are in dire need of equipment and tools or need advisory services in connection with the same. 

• Introduce your business and associated services to the target audience in your area and city. You can send them brochures and make a presentation at their workplace. 
• Do not underestimate the power of print media – newspapers and magazines, and traditional media such as newspapers and TV. They will surely help you to create awareness of your brand in the city. 
• Use digital media and direct marketing techniques – website, social media, and meeting with concerned authorities. 
• Listing in online and print directories. You never know who will come across your brand. 
• Advertise business using Google AdSense. 

Business Pricing Strategy

Pricing strategies will only be effective if you do enough feasibility analysis in connection with the costs and charges levied by other companies. Go a little overboard and study cases of reputed rental companies and how they achieved success. It really helps you to set competitive and reasonable prices and still achieve the sales predictions. 

Since you understand client specifications, ensure that you customize packages and payment modes for them. 

Business Expense Estimates 

The expenditure during the start-up phases of the company is a huge concern. Since you will be purchasing heavy construction equipment, you cannot lower or compromise the budget. It could be between $1,000,000 and even more than the said amount. A proper financing strategy can help you get out of the mess and streamline your funds. 

We are hopeful that this business plan is of help to you. 

You can rent a variety of construction equipment such as excavators, skid steers, boom lifts, scissor lifts, trenchers, and more.

Rentals can be for as long as you need them—from days, to weeks, to months.

Rental options include short-term, long-term, and rent-to-own options.

Yes, most construction equipment rental providers have a minimum rental period which is typically a day or a week.

Yes, most providers will require some sort of insurance coverage on their equipment.

This depends on the rental provider and the terms of the rental agreement.

Yes, most companies offer discounted rates for long-term rentals.

Yes, many companies offer delivery options for an additional fee.

Most companies accept cash, checks, major credit cards, or wire transfers.

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Starting an Equipment Rental Business – A Complete Guide

• November 28, 2023

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 over time 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 own 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!

What construction equipment is rented out the most?

Some of the most rented-out pieces of equipment in construction rentals are: Excavators and mini-excavators Bulldozers Forklifts and scissor lifts Dump trucks Backhoes Skid Steers Wheel loaders Trailers Bucket truck, and more These are some of the construction equipment that have the highest profit margins. All of these have high utilization as well which means that each unit may frequently be unavailable for rent unless you have a larger fleet.

How profitable is an equipment rental business?

The type of assets you have for rent will determine the profitability of your equipment rental business. If you have a fleet of high-value construction equipment, expect high-profit margins. If you are primarily renting out tools and equipment for everyday DIY projects, the profit margin will be low. You can either mix and match your range of equipment to cater to every kind of customer or you can target a specific niche in your local market that has zero to low competition.

What is the most profitable construction machinery?

The most profitable construction machinery to rent out is wheel loaders. These come in various sizes for maximum flexibility. They can be transported with ease and the medium to small ones can be driven directly to a job (if the traffic laws allow it). This piece of equipment has a high profit margin as well with reasonable servicing costs.

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How to Start an Equipment Rental Business in 14 Steps (In-Depth Guide)

Updated:   February 22, 2024

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The equipment rental industry is a major market, projected to grow at a compound annual growth rate of 5% from 2023 to 2030. With construction and industrial activity continuing to expand, the demand for rented equipment like aerial platforms, forklifts, and compactors will only increase.

This guide will walk you through how to start an equipment rental business. Topics include market research, competitive analysis, registering an EIN, obtaining business insurance, forming a legal business entity, and more. Here’s everything to know about starting an equipment rental company.

1. Conduct Equipment Rental Market Research

Market research into the equipment rental industry helps you formulate a structured business plan.

Some details you’ll learn through business research include:

• The industry is also becoming more consolidated as national chains acquire independent rental companies.
• Specialty equipment like trenchers, concrete pumps, and carpet cleaners have high daily rates and strong margins. Focusing on a specialty rental niche can be lucrative.
• Companies are renting equipment for longer periods as projects expand in scope and complexity. The average rental duration has doubled over the past decade.
• Penetration of rentals vs direct equipment purchases will also rise. As more contractors and event planners realize the flexibility and cost savings of renting instead of buying equipment outright, these penetration rates will increase.

The equipment rental industry offers several promising opportunities, especially for specialized niches such as pest control , gardening work, mobile welding , and more. The outlook for both revenue growth and improved profit margins looks positive over the next five years.

2. Analyze the Competition

Understanding the competitive landscape is critical for any new business, including equipment rentals. First, identify direct competitors in your geographic area to analyze.

Drive around town and note current rental companies’ locations, fleet sizes, facility conditions, and marketing messages. Search Google Maps and business directories for rental companies to ensure you have a comprehensive list.

Scrutinize competitors’ websites and online listings. Evaluate site quality, search rankings, reviews and ratings, rental fleet details, and ease of rental reservations. Poor web presence and lack of online booking signal opportunities to outcompete. Compare rental rates and equipment availability across these listings.

You can also learn volumes from competitors’ customers. Search online reviews across Google, Facebook, and rental review platforms like RentEq . Look for customer complaints and shortcomings like broken equipment and slow repairs. Use sentiment analysis to gauge relative brand perception.

Analyzing rental industry data at a metropolitan and national level provides useful context around market size, growth, segments, consumers, pricing, and trends to incorporate into competitive plans too. Established companies’ financial filings may indicate their revenue scale, costs, and inventory investments.

3. Costs to Start an Equipment Rental Business

When starting a heavy equipment rental business, there are a variety of one-time start-up costs to consider even before opening for business. Properly estimating and budgeting for these expenses is vital:

Start-up Costs

One of the biggest initial investments is securing a rental facility, whether leasing, renting, or purchasing property. Leasing warehouse space of at least 2,500 square feet could cost $3,000-$4,000 per month in lease payments, or around $150,000 to purchase a similar-sized site.

The equipment rental fleet forms the core offering and largest capital investment. Most operators start small with 5-10 rental assets, but an ideal starter fleet is 15-25 units with a mix of equipment types like aerial lifts, forklifts, excavators, loaders, and compactors.

Specialized commercial insurance is mandatory, including general liability ($2,000/year) and commercial property insurance ($4,000/year). Carry adequate umbrella insurance limits as protection from lawsuits. Work comp insurance will also be necessary if hiring employees.

A box truck, trailer, van, or pickup will be needed for equipment delivery and transport. Allocate $40,000+ for a reliable used vehicle that can haul equipment. Shop tools, safety gear, an office computer, and materials handling equipment (pallet jack, lifts, etc.) also add up.

An attorney can provide legal guidance on forming the business entity and reviewing contracts and leases for roughly $3,000-$7,000. Accountants handle taxation paperwork for $1,000-$2,000. Logo design, branding, and creating online assets cost around $4,000.

Registration fees and licensing for commercial rental businesses depend on state and locality but often total less than $500 annually. More substantial costs may apply for emissions permits, waste disposal, bonded contractors, and safety certifications.

Ongoing Costs

On the flip side, monthly and annual operating expenses tend to be lower after launch:

A small operation may only require hiring delivery drivers and equipment technicians as needed at $15-$25 per hour. As the business grows to support office administration and sales staff, estimate $45,000+ in total annual payroll expenses.

Aside from the mortgage/rent and utilities on the warehouse and office space at roughly $4,000-$7,000 monthly, there are also facility maintenance and equipment repair costs to consider down the line.

Digital advertising, print mailers, sponsorship of events, website hosting, and graphics work to promote the brand will likely require a marketing budget of $7,500 per year initially.

Insurance, licensing, accounting fees, and other fixed costs will persist while equipment financing payments may continue for years. However, keeping inventory utilization and customer retention high will keep the doors open and profitable.

4. Form a Legal Business Entity

Running your own equipment rental business requires you to form a legal business entity. To rent equipment to customers, you’ll need to be registered as one of the following four entities:

Sole Proprietorship

Sole proprietorships are the simplest structure with no distinction between the individual owner and their company from a legal and tax perspective. Equipment rental companies operated as sole proprietorships benefit from the ease of setup and minimal paperwork. The owner assumes unlimited personal liability for debts and legal disputes involving the business.

Partnership

General partnerships involve two or more co-owners sharing control and profit. Partnerships allow pooling more startup capital to invest in an equipment rental fleet and tapping partners’ complementary experience. However they provide no liability protections for partners; each partner can be held personally liable if sued by a customer, vendor, or employee.

Limited Liability Company (LLC)

Limited liability companies (LLCs) represent the best overall choice. LLCs combine pass-through taxation similar to sole proprietors without unlimited liability. LLC status shields personal assets from rental business debts and lawsuits. Compared to corporations, LLC operating agreements offer greater flexibility.

Corporation

C corporations stand as distinct legal entities from their owners. Shareholders have limited liability, but profits are taxed at both the corporate rate and shareholder level upon distribution of dividends. Significant record-keeping and reporting requirements also apply to corporations.

5. Register Your Business For Taxes

An Employer Identification Number (EIN), also called a Federal Tax Identification Number, essentially serves as the Social Security number for your small business when forming a legal entity like an LLC. Specifically, an EIN is crucial for equipment rental companies to:

• Open a business bank account
• Pay taxes on company profits and employees
• Apply for business licenses and permits
• Operate as an LLC or corporation

Obtaining an EIN is thankfully quick and convenient through the IRS website. Follow these steps:

First, go to the IRS EIN online application . Select View Additional Types, click View All Additional Types, then choose Limited Liability Company for the business type.

Enter the LLC’s legal name and address. Select the appropriate reason for applying and attest you have the authority to apply for the EIN.

Finally, select owner or member-managed LLC classification and provide owner information. Specify the number of LLC members and if the LLC will have employees in the next 12 months. Agree to the terms and submit the EIN application.

The EIN should be assigned immediately upon hitting submit to the applicant or the IRS will send it by mail within 7 days. Now the rental business can officially operate as an LLC!

Finally, remember to complete state or local requirements around sales tax permits, business licenses, and any rental or contractor-specific registrations. Many jurisdictions have associated filing fees under $100. With the EIN and state-level obligations fulfilled, equipment leasing can commence!

6. Setup Your Accounting

With significant investments in rental equipment and revenues tied to utilization rates, astute financial management is imperative in the equipment leasing sector. Tracking all expenses related to fleet purchases, transport, repairs, staffing, marketing, facilities, and other overheads ensures adequate cash flow and profit margins month-to-month.

Accounting Software

Implementing small business accounting software like QuickBooks provides the foundation for organizing financial data. QuickBooks seamlessly syncs with bank and credit card accounts to import and categorize transactions. It automates tasks like invoicing clients, tracking receivables, processing payroll, and generating financial statements.

Hire an Accountant

Most equipment rental businesses should partner with an accountant for advisory services beyond what software allows. Common requests include establishing capital equipment depreciation schedules to optimize tax deductions, preparing fiscal year-end tax filings, and conducting audits or compilations of financial statements.

Apply for a Business Bank Account and Credit Card

Properly separating business and personal finances prevents commingling assets that muddle profitability and tax liability. Start by opening a dedicated small business checking account and apply for a business credit card in the company name using the recently acquired EIN.

7. Obtain Licenses and Permits

Before an equipment rental operation conducts its first customer transaction, becoming properly licensed and permitted at both state and local levels is an absolute must. Find federal license information through the U.S. Small Business Administration . The SBA also offers a local search tool for state and city requirements.

Common rental licensing includes:

General business licenses to legally register the company based on location and corporate structure. In some areas, additional registrations like bonded contractor licenses help qualify for public sector rentals.

Industrial equipment operation permits mandating designated operators pass certified training to legally handle certain rental equipment like forklifts, backhoes, boom lifts, or truck-mounted diggers.

Pollution Control permits related to emissions from gas- or diesel-powered compressors, generators, pumps, and other rental equipment. Rental fleets must comply with state thresholds for allowable emissions of dust particulates, fumes, and gases.

Waste disposal permits for hazmat substances like oil, lubricants, and coolants used in repairing equipment. Proper transportation manifests and disposal procedures apply.

Facility-specific permits around occupancy, zoning, parking, utility usage, stormwater management, fire safety, security, and accessibility dictate where rental businesses can physically operate. Local commercial leasing agents or permitting departments assist with navigating prerequisites.

Review all policy exemptions closely and inquire about rental industry endorsements for niche equipment. Filing proper permits and insurance paperwork takes diligence upfront but prevents significant hassles down the road.

8. Get Business Insurance

Covering financial risks through specialized insurance lets equipment rental business owners breathe easier. The sheer variety of liabilities involving heavy machinery, commercial vehicles, customer injuries, and property damage make adequate coverage mandatory.

Consider disasters like a disgruntled employee intentionally damaging rental inventory, operators incorrectly securing loads leading to a deadly highway accident, or faulty wiring burning down the warehouse facility and entire fleet.

Obtaining appropriate protection hinges on clearly communicating potential exposures to agents. Types of essential rental insurance include:

• General Liability – Covers 3rd party bodily injury and property damage claims. Vital given customer use of dangerous equipment.
• Commercial Auto – For company vehicles transporting rental equipment to client sites.
• Property/Inland Marine – Protects physical assets like rental fleet, facilities, and tools/equipment from floods, fires, vandalism, and theft.
• Umbrella Liability – Additional liability limits atop underlying policies, from $1M up to $100M limits.
• Workers Compensation – Covers injuries, disability, and death benefits for employees. Most states mandate Workers Comp.

Obtaining coverage begins with reaching out to leading insurers for quotes or finding an independent agent to shop rates. Come prepared with past-year financials, theft prevention protocols, driver training certifications, and any positive risk characteristics.

9. Create an Office Space

While equipment rental operations focus heavily on warehouse space for inventory storage, securing practical office accommodations remains important for conducting daily administrative work. An office provides managers and staff space to tackle needs like:

• Signing rental contracts, purchase orders, and bidding paperwork
• Receiving walk-in inquiries from prospective customers
• Interviewing and training new hires
• Analyzing financial performance, inventory management, and growth planning,

When scoping office requirements, three main possibilities exist:

Coworking Office

For flexible shared office space at around $300 monthly, coworking firms like WeWork offer convenient locations with business amenities like meeting rooms, printers, wifi, and front desk staff. But privacy proves limited in open layouts. Storage space for inventory is still separately required.

Retail Office

Specialized retail rental centers combine showroom displays with small private offices on the premises. While the most aligned to rental operations logistically, average rents of $4,000+ monthly for prime locations deter new market entrants.

Commercial Office

Basic commercial office suites provide private rooms for focused work at around $1,000-$1,500 monthly. However, separate warehousing space is still needed with most complexes lacking appropriate equipment parking or materials handling capabilities on site.

10. Source Your Equipment

The anchor assets for any equipment leasing venture are the machines themselves. Fleet selection and acquisition costs represent the largest startup investment. Strategic decisions around buying new, used, leased, or rented inventory impact capital requirements and initial profit potential. Four main sourcing avenues exist:

When buying new equipment, major OEMs like Cat , John Deere , and others offer huge selections ideal for new model preferences. However, prepared to pay premium rates around MSRP plus added transportation, setup, and extended warranty fees. Lead delivery times often drag 8-12 weeks as well.

Purchasing quality used rental gear through auction sites, dealers, or directly from other operators saves 25-60% upfront versus new options. Search sites like Ritchie Bros , eBay , Facebook Marketplace , or Craigslist for local sellers liquidating fleet assets or upgrading inventory. Just budget for slightly higher maintenance costs.

Lease or Rent

Rather than buying equipment, newer entrepreneurs can also lease or rent assets month-to-month from national chains. This essentially outsources ownership responsibilities to focus purely on renting out gear for profit as utilization allows. Smaller independent players lack the scale for reasonable master lease rates on mid-sized fleets.

11. Establish Your Brand Assets

Strategically nurturing a distinct brand builds awareness, cultivates customer loyalty, and conveys professionalism for rental businesses. Beyond a creative logo and slogan, unifying visual identity across online and offline touchpoints signals operational scale.

Get a Business Phone Number

Acquiring a unique business phone number via providers like RingCentral easily forwards calls anywhere with custom greetings and extensions. Toll-free numbers project an enterprise image for less than $30 monthly.

Design a Logo

A thoughtfully designed logo like those created through Looka encapsulates the essence of rental brands through symbolic shapes and color palettes. Given equipment varieties, consider bold industrial themes yet friendly enough for event clients. Vector formats enable scalable use digitally or commercially printed.

Print Business Cards

Business card printing services from Vistaprint also efficiently distribute permanent contact information at tradeshows, sales meetings, and new equipment demos on job sites. Their online design tools allow matching branding with the colors and feel of websites and signage.

Get a Domain Name

An informational homepage on a registered domain from Namecheap legitimizes operations 24/7. Short catchy URLs with logical keywords aid search visibility.

Design a Website

For self-service sites, Wix’s drag-and-drop editor facilitates basic rental catalog listings, contact forms, and online reservations. Outsourcing custom development through marketplaces like Fiverr produces higher-end sites integrating fleet management tools and dynamic rate calculators – albeit at steeper service fees.

12. Join Associations and Groups

Tapping into established rental networks, experts, and large peer groups transfers invaluable insider knowledge no guide could fully detail. Through regular community engagement, unique perspectives, growth tactics, safety procedures, product launches, and lead opportunities all get shared.

Local Associations

At a local level, trade associations like the American Rental Association facilitate regional networking, discounted insurance, annual trade show invites, and government lobbying efforts to benefit equipment rental business interests. Neighboring operators willingly share supplier referrals or even inventory during times of peak project demand.

Local Meetups

Speaking of meetups, sites like Meetup index countless niche gatherings centered around construction techniques, risk management, equipment demos, etc. Search for topics like “Construction Rentals” or “Party Equipment Networking” to likely find free monthly happy hours or workshops to attend. Exchanging business cards leads to customer sharing.

Facebook Groups

For 24/7 peer access online, countless rental-focused Facebook Groups host thousands of international members. Browse Heavy Construction Equipment for Sale or Rent and Nationwide New & Used Restaurant Equipment to start. The crowdsourced wisdom of these massive communities offers on-demand market research and sentiment analyses.

13. How to Market an Equipment Rental Business

Implementing multifaceted marketing immediately generates brand visibility and client leads to accelerate sustainable growth. While word-of-mouth referrals from satisfied regular customers remain invaluable, proactively nurturing online and offline visibility proves vital.

Referral Marketing

Start by incentivizing happy existing patrons to endorse the rental brand on social channels or directly connect owners with similar project leads in their networks. Providing 10-20% discounts on the next rentals in exchange for referrals or online reviews is common.

Digital Marketing

Ongoing digital marketing efforts should include:

• Search ads on Google to appear for relevant rental equipment and location keywords
• Targeted Facebook and Instagram ads focused on contractor/event planner demographics
• Optimizing GMB listings for local SEO rankings and customer reviews
• Publishing help articles on a rental blog to attract organic search traffic
• Creating explainer or demo product videos for YouTube

Traditional Marketing

Conventional promotion formats also assist with broadening local visibility:

• Direct mail postcards showcasing new inventory to contractor mailing lists
• Rental flyers distributed at nearby construction sites and industry job fairs
• Radio spot ads on local stations during peak drive times
• Vehicle wraps or local billboards placed along commuter highways
• Event booth sponsorship and giveaways in alignment with target customers

Diversifying messages across both digital and tangible platforms ensures equipment rental brands capture the interest of prospective clientele however they consume information. Then consistent execution cements trust in capabilities and favorable positioning amongst regional rental market competition.

14. Focus on the Customer

More than simply resolving account issues, customer service in your rental company presents opportunities for rental brands to uniquely wow clients. How equipment is delivered, set up, safely explained, and operated delights patrons and fosters enduring loyalty even amongst steep market competition.

Consider a contractor requiring an urgent trencher rental to complete underground piping before a forecasted rain storm. Getting the equipment delivered quickly, having a technician provide thorough on-site operation guidance, and picking up the equipment on schedule after project completion all reduce delays. Avoiding lost hours from work stoppages nets delighted referrals.

Alternatively, when an event planner realizes the ordered tenting exceeds maximum occupancy mid-event, promptly swapping in properly-sized equipment and refunding delivery fees saves their client relationship and event success. Such hero moments earn loud public praise across social channels.

Even smaller gestures like personalized email check-ins about active rentals, complimentary safety vest offers, or onboarding tutorials build rapport with regulars across organizations of every scale. Rental clients value uptime and reliability over all else given pressing project timelines.

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Galerie de Beaute will be the first salon mall in the state, sub-leasing mini-salon units to hairdressers, nail technicians, aestheticians, and massage therapists.

Tools Rental Business Plan

Borrow My Tools is a start-up company serving the San Mateo, CA community with home improvement tools for lease or rental.

Starting an equipment rental business makes a ton of sense in today’s world. With a trend towards minimalism and reducing environmental impact, allowing customers to rent the equipment they need versus purchasing outright is a win-win for both you and your customers. You might be wondering how much inventory should I take in, and how long should rental terms be, and the like.

The only want to determine these scenarios is putting the effort into creating a business plan that will unpack and optimize your equipment rental business opportunity. Get started today by perusing our selection of equipment rental business plans.

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Sales Articles

It’s not easy selling manual labor services anymore. Whether you’re your own salesperson or you have a sales team, these resources will help improve your sales presentations when dealing with skeptical homeowners.

How to Start an Equipment Rental Business [WITH RESOURCES]

Not sure where to start when building an equipment rental business? Don’t stress. 

This article covers everything from identifying your target audience to starting a business plan. Set yourself up for success with this quick how-to guide for starting your own equipment rental business.

Identify your target market.

The first step to ensuring success is knowing what industries you’ll serve. Also consider the number of businesses in that industry located within an average 50 miles from your business. 

Already know what equipment you plan to carry? Then you likely know your target audience!

Research your rental competition.

It’s important to note local competition. How many rental businesses are in your area? Is success feasible? 

When considering the competition, be sure to note the following for each company: 

• Type of equipment available
• Rental prices (daily, weekly, monthly)
• Services (in addition to renting, do they sell new/used equipment)
• Hours of operation (the later you’re open, the more convenient you are for contractors)
• Business size
• Industries served

Then, develop a plan for making your business stand out. Will you stay open later to give contractors more time to return your equipment? Will you offer equipment that helps roofers, contractors, and restoration professionals, so it’s always out in the field making you money?

Determine what equipment you should offer at your equipment rental business.

Once you know your audience and familiarize yourself with the competition, it’s easier to determine what equipment you should carry. If you plan to serve the general construction community, for example, consider equipment that will help them accomplish their one-off jobs. Contractors are more likely to rent equipment they don’t use regularly.

Here are a few tools and equipment to consider for your rental fleet: 

• Pneumatic nail guns
• Air compressors
• Portable generators
• Scissor lifts
• Self-propelled dump trailers
• Compact cranes

Build and maintain a budget.

In order to build your business without going bankrupt, it’s important to develop and stick to a budget. If you plan to consult investors, they’ll want to know your growth strategy, as well, so consider creating a business plan. 

Keep your budget in mind when choosing equipment for your new rental company. Don’t be afraid to start small–every little bit helps!

Create a website and marketing strategy for your equipment rental company. 

Make it easy for the right people to find you. One way to do this is to build a professional website for your equipment rental business. According to a survey by Clutch.com , 36% of small businesses don’t have websites, yet most people today look up businesses online before heading to their physical locations. True Co. Marketing in Leola, PA , creates custom websites so you can devote more time to researching equipment and other ways to build your business.

Some equipment manufacturers’ websites feature search tools that allow contractors to locate nearby stores carrying their equipment. For example, when you invest in Equipter products for your rental company, you can also be added to Equipter’s database of rental locations for free, searchable by anyone. The Equipter Find A Rental Tool delivers each searcher a list of local rental companies based on their zip code. That’s free brand awareness for you and just one more way to get in front of your target audience. Click below to watch a success story and learn more about adding Equipter products to your rental fleet.

Check out these resources to learn more about how to start an equipment rental business.

Need more info? We’re happy to help! Explore the two collections of resources below to efficiently kickstart your new equipment rental business in no time.

General Resources

• Write Your Business Plan (U.S. Small Business Administration)
• Create a Small Business Budget in 5 Simple Steps (FreshBooks Cloud Accounting)
• Why the RB4000 is Perfect for Your Rental Fleet (Equipter)
• 6 Ways to Boost Your Equipment Rental Business Profitability (Equipter)
• Guide to Financing Equipment for Roofing (Equipter)

Resources for New Equipter Rental Businesses

• How to Start an Equipter Rental Business (Equipter)
• 5 Tips for Running a Successful Equipter Rental Business (Equipter)
• Financing the Equipter (Equipter)

One way to stay up to date with the happenings in the rental industry is to sign up for Equipter’s quarterly newsletter, the Rental Insider. Enter your info below, select "Equipment Rental" in the Industry Detail dropdown, and you’ll be all set to receive information on the latest trends and products from reputable sources.

We earn commissions if you shop through the links below.  Read more

Equipment Rental Business

Back to All Business Ideas

How to Start an 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 Updated on March 19, 2024

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

If you’re looking to start a business from home and make good money, an equipment rental business may be just the ticket. It’s a large and growing industry, expected to rebound more than 60% from a huge dip in 2020. Equipment rental offers all kinds of opportunities – from party equipment to large tool rental and heavy construction equipment. You’ll need to make an investment to get started, but you should start seeing a return relatively quickly. 

Before you start shopping for your items of choice, you’ll need to learn more about the business side of things. Luckily, this step-by-step guide details the entire process of developing and launching a successful equipment rental business. 

Looking to 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 .

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

Related Business Ideas

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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 products or services

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

Your business name is your business identity, so choose one that encapsulates your objectives, services, and mission in just a few words. You probably want a name that’s short and easy to remember, since much of your business, and your initial business in particular, will come from word-of-mouth referrals.

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”
• Avoid location-based names that might hinder future expansion
• Use online tools like the Step by Step Business Name Generator . Just type in a few keywords and hit “generate” and you’ll have dozens of suggestions at your fingertips.

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

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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

Every business needs a plan. This will function as a guidebook to take your startup through the launch process and maintain focus on your key goals. A business plan also enables potential partners and investors to better understand your company and its vision:

• 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 2023

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.

• Equipment Rental Business FAQs

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.

Prices will vary based on the type of equipment you rent. Check local market prices to make sure that 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.

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. 

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.

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.

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. 

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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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• Marketing Plan

Introduction

Construction equipment rental businesses have seen an increase in demand, with in the industry experiencing growth of 8.3% annually. These businesses offer an array of equipment to their customers, such as cranes, jackhammers, bulldozers, forklifts, scaffolding and more. Starting a successful construction equipment rental business requires in-depth planning and a strategic approach. This blog post provides a 12-step checklist for those interested in launching their own business in the construction equipment rental space.

Plan Your Business

Starting a construction equipment rental business requires careful preparation and planning. You'll need to identify your target market, develop a business model and financial plan, acquire the necessary permits and licenses, source and purchase inventory, and build a marketing and branding plan. Before you do all that, you need to plan your business.

The first step in planning your business is to assess your goals and capabilities. It is important to identify the strengths and weaknesses of your business, and whether you have the skills and resources necessary to start up and operate. Ask yourself questions such as: What is the purpose of my business? What will I offer and to whom? What sets my business apart from the competition?

During this step, you should also decide whether to operate as an individual or a corporation. Each has its advantages and disadvantages, so it's important to conduct research and determine which structure is right for you. Additionally, consider the best location for your business, taking into account the available infrastructure, market size, and potential customer base.

Once you gain a better understanding of the business, you'll want to start developing a business plan. A business plan is a comprehensive document that outlines your business's mission, strategies, and goals. It should also outline your financial projections and provide a roadmap for success. Additionally, you may want to create a separate operational plan that outlines the daily operations of your business, such as how you will promote and manage it, how you will structure the organization, and how you will manage the finances.

Finally, you should research and understand the local, state, and federal regulations related to your business. This will help ensure you stay compliant and that your business is protected. Set aside time to learn about any relevant labor laws, zoning regulations, and environmental requirements and determine how they will affect your operations.

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Identify Your Target Market

Before you start a construction equipment rental business, it’s important to know who your target market is. This will help you determine pricing, locations and the types of equipment you’ll need to rent. To identify your target market, here are some steps you can take:

• Research the construction market in your region and identify the main players.
• Think about the types of customers who could benefit from your services: Homeowners? Contractors? Small Business Owners?
• Dig into their needs and challenges to gain better insight into their rental plans and rental preferences.
• Investigate other rental companies to gain a better understanding of the local prices and the types of equipment. This will help you create a competitive pricing strategy.
• Become part of the industry and its events. Attend conventions, seminars, and conferences related to rental prices and find out what customers are talking about. This will give you a better understanding of the demands and needs of your target market.
• Create a customer profile that outlines their needs and preferences. With this profile, you’ll be better equipped to order the correct type of equipment and create a pricing structure that meets those needs.

By taking the time to research your target market, you’ll be better equipped to address the needs of this specific customer base, position your rental business in the market and identify pricing opportunities. With the right target market identified, you’ll be able to launch a successful construction equipment rental business.

Develop A Business Model And Financial Plan

Having a business model and a clear financial plan are essential components of running a successful construction equipment rental business. Taking the time to properly plan out the financial aspects of your business can help ensure your long-term success and growth.

When developing your business model and financial plan, it is important to consider the following:

• Analyze the market - Conduct a thorough analysis of the construction equipment rental market to identify potential opportunities and challenges.
• Set realistic financial goals - Establish financial targets that are realistic and achievable, and adjust them as needed.
• Determine pricing strategies - Work out strategies for setting competitive prices that will allow you to remain profitable.
• Identify sources of funding - Explore potential sources of funding that could help get your construction equipment rental business off the ground.
• Plan for the long term - Make sure to plan for success in the long term by developing strategies to handle growth, manage costs, and diversify revenue streams.

Creating a detailed and comprehensive business model and financial plan will help ensure the success of your construction equipment rental business. Taking the time to analyze the market, set realistic goals, determine pricing strategies, identify sources of funding, and plan for the long term will all contribute to your business' longevity.

Acquire The Necessary Permits & Licenses

The key to successfully launching a construction equipment rental business is having the necessary permits and licenses in place. Depending on where you are planning to start and operate your business, the requirements may vary. With that in mind, here are some tips for getting your business off the ground:

• Research local and state laws regarding the type of business you are operating. Make sure you are in compliance with all applicable regulations, including any zoning ordinances and necessary permits and licenses.
• Contact your local chamber of commerce, small business administration, or department of commerce to ask questions and get all the necessary information to get your business up and running.
• Apply for any necessary permits or licenses at the local, state, and/or federal levels, like building permits, business permits, and business licenses.
• If you are planning on hiring any employees, make sure you inform the relevant agencies and register your business for payroll tax and unemployment tax.
• Obtain any necessary licenses or certificates to operate equipment or anything else related to the services you offer.
• If you are selling any goods or services, make sure you register with the government for sales tax.
• If you are operating a business from your home, make sure you check with your local government for any applicable business license or zoning requirements.
• If you are planning to serve customers outside of the state where you are operating, you may need additional permits or licenses.

Start Building Relationships With Vendors

As a business owner in the construction equipment rental industry, building relationships with vendors is key to running a successful company. After researching what you need and understanding the different types of products available, you’ll need to start building relationships with vendors to ensure you have reliable access to the highest quality products.

To facilitate this process and make it more efficient, here are some tips and tricks for how you should go about building relationships with vendors:

• Start by researching potential vendors online. This can help you narrow down your options and determine which vendors provide the best products and services to fit your company’s needs.
• Once you’ve identified potential vendors, reach out to them via email or telephone to introduce yourself and your business. This can help you make an initial connection and allow you to discuss what product/services you’re interested in.
• Make sure to ask questions and gain a clear understanding of what the vendor can provide. Being detail-oriented and asking questions can help ensure you get the best product and service fit.
• Ensure you establish a clear timeline for when you need the product/services and be realistic with deadlines to create a smooth process.
• Communicate regularly with the vendor. This helps build a strong rapport and allows you to develop a mutually beneficial relationship.
• Compare costs when dealing with multiple vendors, but also take into account customer support and delivery times.

By following these steps, you’ll be well on your way to building successful relationships with vendors and creating an impressive product/service portfolio for your company. For more information about starting a construction equipment rental business, please visit our website for more detailed advice.

Source and Purchase the Needed Inventory

When you begin to open a construction equipment rental business, purchasing the necessary inventory is key to success. As such, you should be careful and thorough in selecting the right type of construction equipment for your inventory. There are several things to think about when sourcing and purchasing your inventory.

First, consider your available budget. Depending on your startup funds, you may not be able to purchase all the equipment you need all at once. Think strategically about what you need to get your business up and running, and then plan to buy additional equipment as needed.

Another important issue to consider when sourcing and purchasing inventory is location. Are you buying inventory near your rental business, or are you sourcing inventory from a different region? Depending on your target market and the kind of equipment you’re offering, you may need to ship inventory from afar. If so, you should factor in transportation costs into your budget.

Finally, look into warranties and return policies. Make sure you are working with reliable vendors who provide warranties and repair services in the case of any equipment malfunctions. Additionally, learn about any return policies offered by vendors, so that you have a clear understanding of your rights and obligations before you purchase any inventory.

• Plan your budget and resources for purchasing the inventory.
• Research and compare different vendors.
• Calculate any transport costs associated with shipping inventory.
• Familiarize yourself with vendors' warranties and return policies.
• Only purchase inventory from reliable and reputable vendors.

Build Marketing and Branding Plan

When launching a construction equipment rental business, marketing and branding are essential, and so it's important that you develop a solid plan to ensure your success. Here are some tips and tricks to consider when creating your marketing and branding plan.

• Perform extensive market research: Knowing your target audience and the competitors in your space will help you develop effective messaging and branding.
• Establish objectives and goals: Having a full understanding of what you want to accomplish with your marketing and branding plan will help you set the direction and expectations and keep you on track.
• Create a budget: Knowing your budget limitations and investing intelligently in marketing and branding from the very start will be essential for long-term success.
• Identify primary channels for communication: Understanding how to best communicate with your target customers is an essential part of creating a successful plan.
• Develop a comprehensive brand package: From logos to visuals, the components of your brand should be carefully considered since it will be the face of your business.
• Strategize for long-term success: Establishing a plan for maintaining and building your brand over time is critical and requires focus and dedication.

Create A Website And Online Presence

Creating a website and online presence for your construction equipment rental business will help you attract new customers, promote your services, and grow your business. To do this, you will need to choose a domain name, hosting service, content management system, design and development team, and website themes and plugins. Here are a few tips and tricks to consider when developing your construction equipment rental website:

• Choose a domain name that reflects your business’s goals and is easy for customers to remember.
• Find a hosting service that is reliable, secure, and cost-effective.
• Graphical user interface (GUI) content management systems, like WordPress, are great for beginners, while open source content management systems like Joomla or Drupal are better for more sophistication.
• Creating the design of your website should be a collaborative effort between you and your design and development team. Make sure your design matches your branding scheme.
• Research and select appropriate website themes and plugins that are compatible with your hosting and content management system.
• Make sure to add relevant SEO tags and optimize your website for search engine optimization in order to get your website to rank higher on search engine results pages.
• Test your website and make adjustments as needed with the guidance of the development team.

By following these tips and tricks, you will be well on your way to creating a functional and visually appealing website for your construction equipment rental business.

Explore Available Sources Of Funding

One of the most important steps to launching a construction equipment rental business is to explore different options for funding . This is an essential part of the business planning process and can help you get the capital you need to move forward with your business goals.

To get started, do the research to determine which types of funding best fit the needs of your business. Here are some sources of funding that may be available to you:

• Small business grants
• Angel investors
• Venture capitalists
• Traditional bank loans
• Crowdfunding
• Online lenders

It’s important to evaluate each potential funding source, the terms and conditions provided, and any funding criteria that you may need to meet. Speak to other businesses in your field, and to financial advisors, to get advice on your options.

You will also need to do a thorough analysis of the costs associated with your business, and the projected return on investment you expect from any expansion. With this data in hand, you are better prepared to approach potential investors and present your business plan with confidence.

Finally, you will need to create a comprehensive business plan that clearly outlines your goals and objectives. This should include a full financial estimate of the costs associated with the launch, the revenue you hope to generate, and the return on investment overtime. This will provide potential investors with assurance that your business is viable, and it will help strengthen your chances of getting the funding you need.

Prepare To Launch The Business

Before officially launching your construction equipment rental business, you must ensure the business has all the necessary components in place. This includes finalizing the financial plan, legal documents, and marketing plan. Additionally, you should complete the necessary steps to ensure the business is operating effectively, efficiently, and compliantly. Here are some tips and tricks to prepare to launch your construction equipment rental business:

• Develop hiring plans by reviewing resumes and interviewing potential employees.
• Create employee handbooks and other documents to set the expectations for workers.
• Create vendor contracts, ensuring the terms and conditions for the rental equipment are clearly defined.
• Draft rental agreements and define the terms, conditions, and fees associated with the equipment.
• Create an operations manual to detail the processes and procedures necessary for running the business.
• Secure appropriate insurance for your business, protecting equipment and personnel.
• Procure the latest and most up-to-date software to track and manage the business.
• Print promotional materials, including business cards, flyers, and brochures.
• Ensure the website is up-to-date and includes sections detailing rental services and pricing.
• Set up custom budgets in your accounting software and define what will be expected from each department.
• Test and inspect all rental equipment before leasing to ensure it is in working condition.

Launching your construction equipment rental business can be overwhelming but following these steps will help streamline operations, set expectations for employees and clients, and protect your business from legal and financial liabilities.

Go Live And Start Operating

Now that your business is ready to go live, it's time to start operating. But before you do, it's important to take a few steps to ensure things run smoothly. Here are some tips and tricks to help you get started.

• Be organized: create a system to track customers, track the equipment inventory and have procedures in place that everyone should follow.
• Develop a customer service process: Have a system in place to answer customer questions and resolve any issues that arise.
• Set up billing and payment processes: Have a system in place to charge customers for rental fees, as well as late fees and other fees if needed.
• Develop staff training process: Ensure that your staff is equipped with the knowledge to accurately answer questions, set up rental agreements, and maintain the equipment.
• Set up an inventory management system: Ensure that all equipment is in good working order, and use a system to track when the equipment has been returned and when it needs to be replaced.
• Stay up to date with industry trends: Staying current with new developments in the construction industry will help you understand the ever-changing rental rates and capabilities of your equipment.

By following these tips and tricks, you'll be able to successfully launch and operate your construction equipment rental business. Good luck!

Track, Measure, And Adjust Your Business As Necessary

Once you’ve successfully launched your construction equipment rental business, it’s important to develop a strategy to monitor, measure, and adjust your operations as necessary. Here are some tips and tricks to do just that:

• Keep track of customer feedback , reviews, and ratings. Monitor what feedback customers are giving you, make quick changes when necessary, and always thank the customer for the feedback.
• Record key financial metrics such as sales, profits, and overhead expenses. Keep a spreadsheet of costs, income, and other financial data, and use this information to project future costs and revenue.
• Tracking your online presence by monitoring places such as Google Reviews and Bing Local. Know what people are saying about you online and use this information to inform your business decisions.
• Regularly reviewing your operations so that you understand which areas require adjustments. Consider having a monthly review of operations so that you are consistently making needed changes.
• Benchmarking your performance against competitors. Understand where you fall in the market and make adjustments so that you stay competitive.

By tracking, measuring, and adjusting your construction equipment rental business as necessary, you’ll be sure to remain competitive in the market and bring in new customers.

Starting a construction equipment rental business can be a daunting task. However, if you have a clear plan of action and follow the 12 steps outlined in this blog post, you will be well on your way to setting up a successful and profitable business. Be sure to network with industry professionals, source high-quality products, and have a marketing and branding plan in place before you launch your business. With the right strategy and dedication, your construction equipment rental business could be a great success.

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How to write a business plan for an equipment rental company?

Writing a business plan for an equipment rental company can be an intimidating task, especially for those just starting.

This in-depth guide is designed to help entrepreneurs like you understand how to create a comprehensive business plan so that you can approach the exercise with method and confidence.

We'll cover: why writing an equipment rental company business plan is so important - both when starting up, and when running and growing the business - what information you need to include in your plan, how it should be structured, and what tools you can use to get the job done efficiently.

Let's get started!

In this guide:

Why write a business plan for an equipment rental company?

What information is needed to create a business plan for an equipment rental company.

• What goes in the financial forecast for an equipment rental company?
• What goes in the written part of an equipment rental company business plan?
• What tool can I use to write my equipment rental company business plan?

Having a clear understanding of why you want to write a business plan for your equipment rental company will make it simpler for you to grasp the rationale behind its structure and content. So before delving into the plan's actual details, let's take a moment to remind ourselves of the primary reasons why you'd want to create an equipment rental company business plan.

To have a clear roadmap to grow the business

It's rarely business as usual for small businesses. The economy follows cycles where years of growth are followed by recessions, and the business environment is always changing with new technologies, new regulations, new competitors, and new consumer behaviours appearing all the time...

In this context, running a business without a clear roadmap is like driving blindfolded: it's dangerous at best. That's why writing a business plan for an equipment rental company is essential to create successful and sustainable businesses.

To write an effective business plan, you will need to take stock of where you are (if you are already in business) and where you want the business to go in the next three to five years.

Once you know where you want your equipment rental company to be, you'll have to identify:

• what resources (human, equipment, and capital) are needed to get there,
• at what pace the business needs to progress to get there in time,
• and what risks you'll face along the way.

Going through this process regularly is beneficial, both for startups and existing companies, as it helps make informed decisions about how best to allocate resources to ensure the long-term success of the business.

To get visibility on future cash flows

If your small equipment rental company runs out of cash: it's game over. That's why we often say "cash is king", and it's crucial to have a clear view of your equipment rental company's future cash flows.

So, how can you achieve this? It's simple - you need to have an up-to-date financial forecast.

The good news is that your equipment rental company business plan already includes a financial forecast (which we'll discuss further in this guide). Your task is to ensure it stays current.

To accomplish this, it's essential to regularly compare your actual financial performance with what was planned in your financial forecast. Based on your business's current trajectory, you can make adjustments to the forecast.

By diligently monitoring your equipment rental company's financial health, you'll be able to spot potential financial issues, like unexpected cash shortfalls, early on and take corrective actions. Moreover, this practice will enable you to recognize and capitalize on growth opportunities, such as excess cash flow enabling you to expand to new locations.

To secure financing

Whether you are a startup or an existing business, writing a detailed equipment rental company business plan is essential when seeking financing from banks or investors.

This makes sense given what we've just seen: financiers want to ensure you have a clear roadmap and visibility on your future cash flows.

Banks will use the information included in the plan to assess your borrowing capacity (how much debt your business can support) and your ability to repay the loan before deciding whether they will extend credit to your business and on what terms.

Similarly, investors will review your plan carefully to assess if their investment can generate an attractive return on investment.

To do so, they will be looking for evidence that your equipment rental company has the potential for healthy growth, profitability, and cash flow generation over time.

Now that you understand why it is important to create a business plan for an equipment rental company, let's take a look at what information is needed to create one.

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The Business Plan Shop makes it easy to create a financial forecast to assess the potential profitability of your projects, and write a business plan that’ll wow investors.

Writing an equipment rental company business plan requires research so that you can project sales, investments and cost accurately in your financial forecast.

In this section, we cover three key pieces of information you should gather before drafting your business plan!

Carrying out market research for an equipment rental company

As you consider writing your business plan for an equipment rental company, conducting market research becomes a vital step to ensure accurate and realistic financial projections.

Market research provides valuable insights into your target customer base, competitors, pricing strategies, and other key factors that can significantly impact the commercial success of your business.

Through this research, you may uncover trends that could influence your equipment rental company.

Your market research may reveal that your customers may be looking for rental equipment with more advanced features. Additionally, it could reveal that they may be interested in renting equipment at a lower cost.

Such market trends play a significant role in forecasting revenue, as they offer valuable data about potential customers' spending habits and preferences.

By incorporating these findings into your financial projections, you can present investors with more accurate information, helping them make informed decisions about investing in your equipment rental company.

Developing the sales and marketing plan for an equipment rental company

Budgeting sales and marketing expenses is essential before creating an equipment rental company business plan.

A comprehensive sales and marketing plan should provide an accurate projection of what actions need to be implemented to acquire and retain customers, how many people are needed to carry out these initiatives, and how much needs to be spent on promotions, advertising, and other aspects.

This helps ensure that the right amount of resources is allocated to these activities in order to hit the sales and growth objectives forecasted in your business plan.

The staffing and capital expenditure requirements of an equipment rental company

Whether you are starting or expanding an equipment rental company, it is important to have a clear plan for recruitment and capital expenditures (investment in equipment and real estate) in order to ensure the success of the business.

Both the recruitment and investment plans need to be coherent with the timing and level of growth planned in your forecast, and require appropriate funding.

A equipment rental company might incur staffing costs such as salaries for administrative staff, customer service staff, and sales staff. Additionally, they might incur costs for equipment such as forklifts, generators, and scaffolding. They may also need to purchase tools and parts to maintain their equipment, as well as transport and safety equipment.

In order to create a realistic financial forecast, you will also need to consider the other operating expenses associated with running the business on a day-to-day basis (insurance, bookkeeping, etc.). 

Once you have all the necessary information to create a business plan for your equipment rental company, it is time to start creating your financial forecast.

What goes into your equipment rental company's financial forecast?

The financial forecast of your equipment rental company's business plan will enable you to assess the growth, profitability, funding requirements, and cash generation potential of your business in the coming years.

The four key outputs of a financial forecast for a equipment rental company are:

• The profit and loss (P&L) statement ,
• The projected balance sheet ,
• The cash flow forecast ,
• And the sources and uses table .

Let's look at each of these in a bit more detail.

The projected P&L statement

The projected P&L statement for an equipment rental company shows how much revenue and profits your business is expected to generate in the future.

Ideally, your equipment rental company's P&L statement should show:

• Healthy growth - above inflation level
• Improving or stable profit margins
• Positive net profit

Expectations will vary based on the stage of your business. A startup will be expected to grow faster than an established equipment rental company. And similarly, an established company should showcase a higher level of profitability than a new venture.

The forecasted balance sheet of your equipment rental company

The projected balance sheet of your equipment rental company will enable the reader of your business plan to assess the overall financial health of your business.

It shows three elements: assets, liabilities and equity:

• Assets: are productive resources owned by the business, such as equipment, cash, and accounts receivable (money owed by clients).
• Liabilities: are debts owed to creditors, lenders, and other entities, such as accounts payable (money owed to suppliers).
• Equity: includes the sums invested by the shareholders or business owners and the profits and losses accumulated by the business to date (which are called retained earnings). It is a proxy for the value of the owner's stake in the business.

Analysing your equipment rental company projected balance sheet provides an understanding of your equipment rental company's working capital structure, investment and financing policies.

In particular, the readers of your plan can compare the level of financial debt on the balance sheet to the equity value to measure the level of financial risk (equity doesn't need to be reimbursed, while financial debt must be repaid, making it riskier).

They can also use your balance sheet to assess your equipment rental company's liquidity and solvency:

• A liquidity analysis: focuses on whether or not your business has sufficient cash and short-term assets to cover its liabilities due in the next 12 months.
• A solvency analysis: takes and longer view to assess whether or not your business has the capacity to repay its debts over the medium-term.

The cash flow forecast

As we've seen earlier in this guide, monitoring future cash flows is the key to success and the only way of ensuring that your equipment rental company has enough cash to operate.

As you can expect showing future cash flows is the main role of the cash flow forecast in your equipment rental company business plan.

It is best practice to organise the cash flow statement by nature in order to show the cash impact of the following areas:

• Cash flow generated from operations: the operating cash flow shows how much cash is generated or consumed by the business's commercial activities
• Cash flow from investing activities: the investing cash flow shows how much cash is being invested in capital expenditure (equipment, real estate, etc.) either to maintain the business's equipment or to expand its capabilities
• Cash flow from financing activities: the financing cash flow shows how much cash is raised or distributed to financiers

Looking at the cash flow forecast helps you to make sure that your business has enough cash to keep running, and can help you anticipate potential cash shortfalls.

Your equipment rental company business plan will normally include both yearly and monthly cash flow forecasts so that the readers can view the impact of seasonality on your business cash position and generation.

The initial financing plan

The sources and uses table or initial financing plan is a key component of your business plan when starting an equipment rental company.

It shows where the capital needed to set up the business will come from (sources) and how it will be spent (uses).

This table helps size the investment required to set up the equipment rental company, and understand how risks will be distributed between the business owners, and the financiers.

The sources and uses table also highlights what the starting cash position will be. This is key for startups as the business needs to have sufficient funding to sustain operations until the break-even point is reached.

Now that you have a clear understanding of what will go into the financial forecast of your equipment rental company business plan, let's have a look at the written part of the plan.

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The written part of an equipment rental company business plan

The written part of an equipment rental company business plan is composed of 7 main sections:

• The executive summary
• The presentation of the company
• The products and services
• The market analysis
• The strategy
• The operations
• The financial plan

Throughout these sections, you will seek to provide the reader with the details and context needed for them to form a view on whether or not your business plan is achievable and your forecast a realistic possibility.

Let's go through the content of each section in more detail!

1. The executive summary

The executive summary, the first section of your equipment rental company's business plan, serves as an inviting snapshot of your entire plan, leaving readers eager to know more about your business.

To compose an effective executive summary, start with a concise introduction of your business, covering its name, concept, location, history, and unique aspects. Share insights about the services or products you intend to offer and your target customer base.

Subsequently, provide an overview of your equipment rental company's addressable market, highlighting current trends and potential growth opportunities.

Then, present a summary of critical financial figures, such as projected revenues, profits, and cash flows.

You should then include a summary of your key financial figures such as projected revenues, profits, and cash flows.

Lastly, address any funding needs in the "ask" section of your executive summary.

2. The presentation of the company

In your equipment rental company business plan, the second section should focus on the structure and ownership, location, and management team of your company.

In the structure and ownership part, you'll provide an overview of the business's legal structure, details about the owners, and their respective investments and ownership shares. This clarity is crucial, especially if you're seeking financing, as it helps the reader understand which legal entity will receive the funds and who controls the business.

Moving on to the location part, you'll offer an overview of the company's premises and their surroundings. Explain why this particular location is of interest, highlighting factors like catchment area, accessibility, and nearby amenities.

When describing the location of your equipment rental company to a third party financier, you could emphasize the potential for growth in the area. The company could be located in an area with a high population density, which could increase the potential customer base. You could also note the availability of resources in the area, such as materials, transportation, and labor that could help the company to succeed. Additionally, you might point out the proximity to major markets and transportation hubs, which could help the company access new clients and expand its operations. Finally, you could highlight the potential for tax incentives and subsidies in the area, which could help reduce the company's operating costs.

Finally, you should introduce your management team. Describe each member's role, background, and experience.

Don't forget to emphasize any past successes achieved by the management team and how long they've been working together. Demonstrating their track record and teamwork will help potential lenders or investors gain confidence in their leadership and ability to execute the business plan.

3. The products and services section

The products and services section of your business plan should include a detailed description of the offerings that your company provides to its customers. 

For example, your equipment rental company might offer rental of construction tools, party supplies, and outdoor recreation equipment. Construction tools could include anything from drills and saws to ladders and scaffolding for larger projects. Party supplies could include tables, chairs, tents, and decorations to accommodate large events. Outdoor recreation equipment could include kayaks, canoes, and bicycles for customers looking to explore the outdoors. These products and services offer customers the convenience of using quality equipment without having to make a large upfront investment.

When drafting this section, you should be precise about the categories of products or services you sell, the types of customers you are targeting and how customers can buy them.

4. The market analysis

When presenting your market analysis in your equipment rental company business plan, you should detail the customers' demographics and segmentation, target market, competition, barriers to entry, and any regulations that may apply.

The goal of this section is to help the reader understand how big and attractive your market is, and demonstrate that you have a solid understanding of the industry.

You should start with the demographics and segmentation subsection, which gives an overview of the addressable market for your equipment rental company, the main trends in the marketplace, and introduces the different customer segments and their preferences in terms of purchasing habits and budgets.

The target market section should follow and zoom on the customer segments your equipment rental company is targeting, and explain how your products and services meet the specific needs of these customers.

For example, your target market might include large construction companies. These companies need to rent heavy equipment for large projects and would likely need to rent such equipment on a regular basis. These companies have the financial resources to make large investments in heavy equipment and may even need to rent specialized equipment that they do not have.

Then comes the competition subsection, where you should introduce your main competitors and explain what differentiates you from them.

Finally, you should finish your market analysis by giving an overview of the main regulations applicable to your equipment rental company.

5. The strategy section

When crafting the strategy section of your business plan for your equipment rental company, it's important to cover several key aspects, including your competitive edge, pricing strategy, sales & marketing plan, milestones, and risks and mitigants.

In the competitive edge subsection, clearly explain what sets your company apart from competitors. This is particularly critical if you're a startup, as you'll be trying to establish your presence in the marketplace among entrenched players.

The pricing strategy subsection should demonstrate how you aim to maintain profitability while offering competitive prices to your customers.

For the sales & marketing plan, outline how you plan to reach and acquire new customers, as well as retain existing ones through loyalty programs or special offers.

In the milestones subsection, detail what your company has achieved thus far and outline your primary objectives for the coming years by including specific dates for expected progress. This ensures everyone involved has clear expectations.

Lastly, in the risks and mitigants subsection, list the main risks that could potentially impact the execution of your plan. Explain the measures you've taken to minimize these risks. This is vital for investors or lenders to feel confident in supporting your venture - try to proactively address any objection they might have.

Your equipment rental company may face a variety of risks. For example, there is the risk of equipment damage or loss due to improper use or theft. This could lead to costly repairs or replacements, and possibly even a drop in customer satisfaction. Additionally, there could be risks related to employee safety. For example, if your company rents out heavy machinery, there is a chance that a customer may not know how to properly use the equipment, leading to employee injury.

6. The operations section

The operations of your equipment rental company must be presented in detail in your business plan.

The first thing you should cover in this section is your staffing team, the main roles, and the overall recruitment plan to support the growth expected in your business plan. You should also outline the qualifications and experience necessary to fulfil each role, and how you intend to recruit (using job boards, referrals, or headhunters).

You should then state the operating hours of your equipment rental company - so that the reader can check the adequacy of your staffing levels - and any plans for varying opening times during peak season. Additionally, the plan should include details on how you will handle customer queries outside of normal operating hours.

The next part of this section should focus on the key assets and IP required to operate your business. If you depend on any licenses or trademarks, physical structures (equipment or property) or lease agreements, these should all go in there.

You could have key assets such as the rental equipment itself and the inventory of items available. These may include items such as tools, vehicles, and heavy machinery. You might also have Intellectual Property such as the software associated with the rental company and the branding associated with the company. These could be trademarks, logos, and other designs that help the rental company stand out from the competition.

Finally, you should include a list of suppliers that you plan to work with and a breakdown of their services and main commercial terms (price, payment terms, contract duration, etc.). Investors are always keen to know if there is a particular reason why you have chosen to work with a specific supplier (higher-quality products or past relationships for example).

7. The presentation of the financial plan

The financial plan section is where we will include the financial forecast we discussed earlier in this guide.

Now that you have a clear idea of what goes into an equipment rental company business plan, let's look at some of the tools you can use to create yours efficiently.

What tool should I use to write my equipment rental company's business plan?

There are two main ways of creating your equipment rental company business plan:

• Using specialized business planning software,
• Hiring a business plan writer.

Using an online business plan software for your equipment rental company's business plan

Using online business planning software is the most efficient and modern way to write an equipment rental company business plan.

There are several advantages to using specialized software:

• You can easily create your financial forecast by letting the software take care of the financial calculations for you without errors
• You are guided through the writing process by detailed instructions and examples for each part of the plan
• You can access a library of dozens of complete business plan samples and templates for inspiration
• You get a professional business plan, formatted and ready to be sent to your bank or investors
• You can easily track your actual financial performance against your financial forecast
• You can create scenarios to stress test your forecast's main assumptions
• You can easily update your forecast as time goes by to maintain visibility on future cash flows
• You have a friendly support team on standby to assist you when you are stuck

If you're interested in using this type of solution, you can try The Business Plan Shop for free by signing up here .

Need a solid financial forecast?

The Business Plan Shop does the maths for you. Simply enter your revenues, costs and investments. Click save and our online tool builds a three-way forecast for you instantly.

Hiring a business plan writer to write your equipment rental company's business plan

Outsourcing your equipment rental company business plan to a business plan writer can also be a viable option.

Business plan writers are skilled in creating error-free business plans and accurate financial forecasts. Moreover, hiring a consultant can save you valuable time, allowing you to focus on day-to-day business operations.

However, it's essential to be aware that hiring business plan writers will be expensive, as you're not only paying for their time but also the software they use and their profit margin.

Based on experience, you should budget at least £1.5k ($2.0k) excluding tax for a comprehensive business plan, and more if you require changes after initial discussions with lenders or investors.

Also, exercise caution when seeking investment. Investors prefer their funds to be directed towards business growth rather than spent on consulting fees. Therefore, the amount you spend on business plan writing services and other consulting services should be insignificant compared to the amount raised.

Keep in mind that one drawback is that you usually don't own the business plan itself; you only receive the output, while the actual document is saved in the consultant's business planning software. This can make it challenging to update the document without retaining the consultant's services.

For these reasons, carefully consider outsourcing your equipment rental company business plan to a business plan writer, weighing the advantages and disadvantages of seeking outside assistance.

Why not create your equipment rental company's business plan using Word or Excel?

I must advise against using Microsoft Excel and Word (or their Google, Apple, or open-source equivalents) to write your equipment rental company business plan. Let me explain why.

Firstly, creating an accurate and error-free financial forecast on Excel (or any spreadsheet) is highly technical and requires a strong grasp of accounting principles and financial modelling skills. It is, therefore, unlikely that anyone will fully trust your numbers unless you have both a degree in finance and accounting and significant financial modelling experience, like us at The Business Plan Shop.

Secondly, relying on spreadsheets is inefficient. While it may have been the only option in the past, technology has advanced significantly, and software can now perform these tasks much faster and with greater accuracy. With the rise of AI, software can even help us detect mistakes in forecasts and analyze the numbers for better decision-making.

And with the rise of AI, software is also becoming smarter at helping us detect mistakes in our forecasts and helping us analyse the numbers to make better decisions.

Moreover, software makes it easier to compare actuals versus forecasts and maintain up-to-date forecasts to keep visibility on future cash flows, as we discussed earlier in this guide. This task is cumbersome when using spreadsheets.

Now, let's talk about the written part of your equipment rental company business plan. While it may be less error-prone, using software can bring tremendous gains in productivity. Word processors, for example, lack instructions and examples for each part of your business plan. They also won't automatically update your numbers when changes occur in your forecast, and they don't handle formatting for you.

Overall, while Word or Excel may seem viable for some entrepreneurs to create a business plan, it's by far becoming an antiquated way of doing things.

• Using business plan software is a modern and cost-effective way of writing and maintaining business plans.
• A business plan is not a one-shot exercise as maintaining it current is the only way to keep visibility on your future cash flows.
• A business plan has 2 main parts: a financial forecast outlining the funding requirements of your equipment rental company and the expected growth, profits and cash flows for the next 3 to 5 years; and a written part which gives the reader the information needed to decide if they believe the forecast is achievable.

We hope that this in-depth guide met your expectations and that you now have a clear understanding of how to write your equipment rental company business plan. Do not hesitate to contact our friendly team if you have questions additional questions we haven't addressed here.

Also on The Business Plan Shop

• How to write a business plan to secure a bank loan?
• How to write the business plan for a grant application?
• How to write the location section of your business plan?
• How do business plans differ from business proposals?
• Key steps to write a business plan?
• Top mistakes to avoid in your business plan

Do you know entrepreneurs interested in starting or growing an equipment rental company? Share this article with them!

Founder & CEO at The Business Plan Shop Ltd

Guillaume Le Brouster is a seasoned entrepreneur and financier.

Guillaume has been an entrepreneur for more than a decade and has first-hand experience of starting, running, and growing a successful business.

Prior to being a business owner, Guillaume worked in investment banking and private equity, where he spent most of his time creating complex financial forecasts, writing business plans, and analysing financial statements to make financing and investment decisions.

Guillaume holds a Master's Degree in Finance from ESCP Business School and a Bachelor of Science in Business & Management from Paris Dauphine University.

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Equipment Rental Business Plan

This equipment rental business plan sample is focused on the growing service industry in Washington, DC .  We hope this sample provides you with a brief foundation for starting your own equipment rental company.  Our equipment rental business plan writers crafted this sample for your review.

Executive Summary 

“R Best Solution Inc.” operating as “R Best Solution” or “the Company” was incorporated in 2019 in Washington, DC and is a 50/50 joint partnership between owners Ron Miller and Rob Croner. The company provides eco-friendly temporary site services and rentals (fencing, portable toilets, and bins) for construction sites, farms, events, and other temporary sites. 

As the construction industry begins to recover post-pandemic, new projects are breaking ground at a record pace in Washington, DC. There is currently a gap in the market for a business that can provide different site services (including portable toilets, fencing, bins). Today, developers and other companies are sourcing what they need from separate companies. R Best Solution will become the one-stop-shop for all temporary site rental supplies.

Not only is the company to become the one source of all temporary site rental equipment, but a significant focus will also be on environmentally friendly products and materials when possible. 

R Best Solution is seeking a $50,000 loan from the SBA Loan Program to purchase inventory and assist with start-up costs in the first year.

The company seeks to make a difference in the world of temporary event equipment rentals by supplying Washington, DC. sites with more eco-friendly solutions to their site services needs. 

Market Research Summary  

America is the number one producer of garbage in the world. American’s produce approximately 1.3 billion metric tons (36.1 metric tons per person) every year. A large portion of this likely comes from construction, one of the key industries R Best Solution is targeting. 

After a slow new construction starts year during the pandemic, construction projects are expected to increase in the coming years. As the industry begins new projects, the need for site rentals and services from R Best Solution will also increase. The company also expects to see significant business from special event organizers and the DC filming industry as those industries reopen post-pandemic. 

The company is a catalyst for those looking to create construction projects, events, building works, farming endeavours, and other ambitious operations and need site rental equipment like fences, portable toilets, and bins. Currently, these businesses are sourcing these rentals individually and buying them from multiple vendors. 

Marketing Summary  

The founders of R Best Solution understand the importance of having an effective online presence to portray professionalism and attract business leads. The company will ensure its website is always up to date, have an active social media presence to engage with customers and educate them on environmental issues related to site rentals and form many strategic partnerships to move the business forward.  The company will also get word-of-mouth referrals through networking and by forming strategic partnerships.

Finance Summary  

With this $50,000 loan, R Best Solution will bolster its inventory of disposal bins, fence panels and portable toilets.  Within the first 12 months we forecast $350,625 of gross revenue, $125,606 in operating expenses and $77,522 in net income. 

Company Profile

Business Overview

R Best Solution provides eco-friendly temporary site equipment rentals (like fencing, portable toilets, and bins) for construction sites, farms, events, and other temporary sites. The co-founders have seen firsthand the struggles of those seeking equipment and supplies for temporary sites. They set out to create a company that provides everything site managers require, including fencing, portable toilets, and waste/recycling solutions). 

There are many competitors that R Best Solution is competing against, but most are larger, national chains that offer in-the-box solutions. R Best Solution is smaller and therefore more agile to meet the customized needs of customers. And as a smaller company, they will focus heavily on providing good customer service, something that the competitors seem to be lacking, according to various third-party reviews of these companies. 

In addition to providing site services and rentals, the company will also have a dedicated focus on environmental sustainability. They plan to partner with other environmentally aware companies and associations to help reduce waste and encourage more eco-friendly products and business practices. 

Company History

Mr. Croner and Mr. Miller have spent many years in jobs where temporary sites were required. They saw employers struggling to source temporary structures and equipment from multiple sources and end up with many environmentally damaging products being brought on-site or discarded after use. They also saw temporary sites struggle to sort recycle and waste effectively.

They combined their knowledge of the industry and personal passions for environmental sustainability to form R Best Solution to fix the gap in the marketplace. 

Management  

The company will be managed by the two founding partners, Rob Croner and Ron Miller.

The business administration will operate from 123 3rd Street Washington, DC

Inventory and production will take place at a secondary location that is currently to be determined. 

Legal Structure

The company is incorporated and will be owned by Mr. Ron Miller and Mr. Rob Croner, who each own a 50% share. 

Mission & Vision

Mission Statement  

R Best Solution is on a mission to provide construction sites, farms, event sites, and other temporary venues with environmentally-safe made equipment rentals so they can minimize their impact on the environment. 

Vision Statement 

R Best Solution envisions a world where sustainable business practices are customary, and improvement and resourcefulness become second nature for businesses.

Daily Mission 

R Best Solution’s daily mission is to promote sustainability and reinforce local businesses in their sustainability efforts. 

Goals & Objectives

R Best Solution is driven by excellence. To meet its objectives to bring eco-friendly options for more temporary sites around Washington, DC., the company has set several goals:

• Purchase five trucks and an ample supply of bins by 2022.
• Obtain funding to purchase inventory and help with start-up costs until the business is profitable at the end of year one. 
• Continually build up inventory and stock of rentable site services in the first year. 
• Hire three labourers in the first year.
• Hire a digital marketing company to help attract 1000 followers across all platforms in the first year.
• To earn $30-50K profits in the first year.
• Participate in at least six large networking events and conferences in the first year (in-person or virtual).
• Join as active members of ten business and industry organizations in the first year (i.e.: Better Business Bureau, industry associations)
• Earn the proven results and right to pitch and onboard an environmental charitable partner by 2024.

Market Research

Industry Profile & Outlook

America produces the most waste in the world at approximately 1,500,000 metric tons (40.5 metric tons per person). The need for waste and recycling collection continues to grow as the population and needs of Americans continue to grow.

As the world begins to reopen following the global pandemic, the waste disposal industry is expected to see massive growth:

The waste collection services industry earns revenues of $6.3 billion and is expected to grow at an annualized growth of 4% by 2026. The industry is highly dependent on construction, population growth, and garbage and recycling collection and processing regulations. 

In DC, the value of proposed construction projects is expected to be $300 billion. The value of current construction projects underway in the province is already $130 billion. This industry accounts for 10.6% of the province’s GDP. 

In America, the value of construction projects is expected to reach $40.7 billion and grow at an annualized rate of 5.6% over the years to 2026. 

R Best Solution sees this growing waste problem as unfortunate for the environment but as an opportunity for the company to impact change and help divert some of this waste product into recycling programs for its customers.

Local Markets

R Best Solution serves many different markets, lowering the risk to the business should one industry see a downturn or collapse. The key markets R Best Solution plans to target include construction, agriculture, and forestry. Film and special events will act as a secondary market for expansion in the future as these industries bounce back after the pandemic. 

Construction 

The value of proposed construction projects in the District of Columbia is $300 billion, and $120 billion worth is already underway. DC’s construction industry accounts for 8.6% of the states’ GDP.

Agriculture 

The DC agriculture industry is mainly recession-proof and will need assistance with site cleanup, management, and sorting of wood in bins for the foreseeable future. The industry has seen solid growth in the past three years.

At the end of 2020, the value of farm equity in America rose 4.4% to $563.2 billion, rising faster than total assets for a third consecutive year. 

Organizations like Farm Credit America regularly publish reports, help new farms launch, and sustain profitable operations. 

Forestry and Logging 

The logging industry in America is a $12.1 Billion business with over 10,000 companies that employ over 34,000 people in America. This industry is highly dependent on the health of the trees it harvests (the pine beetle epidemic in American forests hit the industry hard over the past 20 years) and on downstream demand in other sectors using wood products (like construction) and consumer use of wood and paper products.  

For R Best Solution, an excellent way to serve this industry is to partner with the BCC Centre for Advanced Wood Processing. They are America’s national centre for education, training and technical assistance for the wood products manufacturing industry. This organization also creates training and development events and is an industry connector. This could provide an opportunity for R Best Solution to be associated with a reputable, academic, and industry partner while also referring potential clients. 

Film Industry 

Due to the attractive tax credits for Americans, DC is a popular place for film and TV projects. In 2019, DC’s film industry was valued at $4.1 Billion.  Location scouts for these productions often source and secure locations around private residences, commercial establishments, and public places for filming. Crews are often on-site for several days or longer. They usually require rentals of fencing, portable toilets, and waste and recycling bins while on site.

Future markets

As the company grows, it can service all sizes of events in DC. In the future special events are expected to become a huge industry focus for R Best Solution. In 2019 this industry was valued at $1.788 million. Like many industries, it saw a significant dip during the pandemic but looks to be slowly returning in 2021 and for the future. 

To increase the marketing reach of the company, R Best Solution will form relationships and partnerships with:  

• VRCA – The largest regional construction association in the District of  Columbia
• Better Business Bureau (Get a listing, invite to events).
• Washington, DC. Board of Trade (Get a listing, invite to events, industry insight)
• DC Road Builders 
• Small Business DC – can appear in a blog and on TV screens 
• Tinseltown Televisions – can appear on TV advertising 
• Foreign Newspapers – the company can place an ad in foreign newspapers at a low cost.
• World Environment Day: Celebrating on social media and also at any relevant events. The UN’s #GenerationRestoration can be adopted online.
• Waste Reduction Week America

Key Competitors / SWOT Analysis

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Summarized Key Differentiators

• Overall, R Best Solution is superior to the competition as it has superb customer service, dynamic service offerings, a strong marketing team/plan, and does price matching. 
• No construction company offers any of the services that R Best Solution plans to provide in-house. All competitors are servicing companies separate from the construction industry. 
• All fencing sizes will be quoted in “linear feet.”
• All competitors but one had fixed pricing. R Best Solution plans to negotiate and price match for customers when needed.  
• Some companies with higher-rated customer service levels followed up with an email, which was a nice touch and something R Best Solution plans to incorporate in their sales process too.

Target Market  

The target clients for R Best Solution include anyone who does work temporarily on sites and requires equipment like safety fencing, portable toilets, and waste bins. These clients come mainly from the construction industry but also include: 

• Homebuilders
• Renovation companies
• Commercial and residential developers
• Special event organizations and groups

Key to Success

For R Best Solution depends on the following keys to success:

• Officially launching the business
• Growing the loyal following on social media and in the local business community
• Pricing and packaging services in a competitive manner put the company slightly ahead of the competition. 
• The founder’s extensive knowledge of the construction and temporary site management will be vital in understanding the pain points of this market.

Operations 

Legal Issues

R Best Solution will adhere to the following legal and ethical requirements:

Environment First

A solid environmental policy is the cornerstone of R Best Solution. The company will make the environmental policy clear and on the first page of the website and look for ways to partner with other environmentally conscious companies.

American Anti Spam Legislation – AASL 

The company will ensure that all business development outreach via mail or email will occur only with the recipient’s consent. No contact will be added to our databases without express written permission from the contact. 

Data Protection and Security 

R Best Solution values the privacy of customer data and information. The company will observe all data protection legislation and will not retain sensitive third-party data. When security cameras and monitoring services are added to our portfolio, all CCTV and privacy laws legislation will be observed. 

Legal Contracts 

A lawyer will be hired to create the vendor agreements. The company will request the following unique clauses be included:  

• Clauses to limit liability as much as possible.
• Credit and ability to announce the partnership. The company will be able to promote any testimonials, partnerships, or clients on social media. 
• If the client is a film or TV client, the company will request the ability to obtain a Screen Credit. 
• Partners will sign a memorandum of understanding that both parties are not responsible for debts or liabilities.

R Best Solution will obtain all standard commercial insurance. R Best Solution will request that all clients and vendors get their own insurance too. 

Expense Tracking 

The company will hire bookkeepers to maintain accurate financial records. This will be a requirement for the accuracy of taxes and future tax and business planning. 

Insurance Issues 

R Best Solution will seek and obtain all necessary liability insurance and other insurance required by law for any business activity the company participates in. 

Waste Legalities: Authorizations and Permits

R Best Solution will obtain all necessary waste disposal certificates as required by the Hazardous Waste and Hazardous Recyclable Material Regulations. The company will also be compliant with the Environmental Management Act (EMA).

The Waste Discharge Regulation defines the activities and types of waste that needs authorization under the EMA, including: 

• Air contaminants (i.e. dust from an industrial site)
• Effluent (i.e. wastewater from industry or sewage)
• Garbage (i.e. municipal and industrial garbage)
• Hazardous waste (i.e. batteries, asbestos and waste oil)

The company will apply for waste discharge as necessary here and ensure staff reviews the process monthly to ensure compliance.

R Best Solution will consult a lawyer and apply for additional waste insurance or permits required by municipal, provincial, and federal law. 

All company vehicles will also be deemed “safe for road use” and regular servicing for safety checks and maintenance.

Human Resources

When R Best Solution begins hiring for roles with the company, there will be a need for professional drivers and machine operators who will assist with picking up and dropping off inventory and maintaining inventory upkeep. Their pay is expected to be $18 per hour. 

Year 1: During the first year, the only two full-time employees will be the two owners. All other business support will be subcontracted or hired from outside the company.

Year 2: One to two employees may be hired based on demand and workload in the second year. 

Year 3 : In the third year, the company expects to employ three or more people, depending on growth. 

Process / Production

To become a trusted one-stop-shop for all temporary site services and equipment, R Best Solution will offer the following eco-friendly equipment rentals and services:

Disposal/Recycle Bin Rentals

Various sizes of bins will be available for rent and are custom-made depending on the customer’s needs. As such, the pricing will vary. Bin delivery and pick-up will always be included in customer pricing. 

Portable Toilets

When many people think of renting a portable toilet for their job site or event, they think of the standard, regular-sized plastic porta-potty cubicle. While these are popular and economical for site and event coordinators, it’s not the only option. 

R Best Solution will also offer executive washroom trailers with a more luxurious interior. The company can create portable washroom structures for any space requirements and budget. They can also help determine how many washroom facilities you need based on the type of event and site capacity. 

R Best Solution will also provide options for upgrading portable toilet structures. One of these additions is to install expandable storage for clients who want to decrease the frequency of tank emptying. Tank emptying and removal will be worked into rental fees.

Temporary Fencing

Temporary fencing around sites doesn’t often have the best reputation and isn’t generally viewed as durable or high quality. The fencing available for rent from R Best Solution are sturdy and stay in place better than the cheaper rent-a-fences other sites use. This is a great option to protect construction sites in higher-end neighborhoods or as perimeter fencing for events. They are designed to deter trespassers and wildlife. 

Post-construction cleanup, recycling, and sorting

Cleanup at an event or construction site can be time-consuming, especially for customers who value correctly sorting and recycling waste. R Best Solution will offer a service to come onsite to pick up, sort, and dispose of all site materials by recycling whenever possible. 

The company will also track recycling on customer sites and post public congratulations on social media when they reach recycling milestones. This is done to spread the company’s sustainability messaging and encourage other companies to step up their recycling and eco-friendly initiatives. 

Future Service: On-Site Security – Both R Best Solution Founders have extensive site security experience and plan to offer CCTV services for sites once the company’s main service portfolio has been established.

Future Service: Commercial Storage Lockers – As demand increases, R Best Solution will offer portable storage lockers and other large plastic storage containers for customers. 

Future Service: Portable Sinks – Providing handwashing facilities and sinks for sites is something the company expects to see increased demand for in the coming years. These will need to comply with increasing personal hygiene standards, public health guidelines. 

Risk Assessment 

Risk 1: A health crisis (similar to COVID-19) or other incident causes construction sites to cease operations for the long term. 

Mitigation Plan: Push rentals like fencing (for security) and push site security and monitoring service until the worksite can reopen.

Risk 2: Customers leave bad reviews of R Best Solution online. This has happened for the company’s competitors, and they appeared to have been left unresolved.

Mitigation Plan: The company’s customer representatives will take an active role in providing good customer service including, email follow-ups after proposals are sent and publicly responding to all negative feedback posted on public forums in a professional and positive manner. 

Risk 3: New competitors come into the local market and try to compete. 

Mitigation Plan: R Best Solution will update its marketing messaging as needed in response to external pressures. Often this messaging will include pushing the benefits and key differentiators, like the company’s environmental focus. 

Sales & Marketing

Pricing Strategy

As most rentals will be custom-made, pricing may vary depending on many factors. Some guidelines for pricing at R Best Solution include:

• Measurements : All fencing prices are quoted in “linear feet.” 
• Beating competitor pricing : Initially, R Best Solution will create custom work only. The goal is to beat a competitor’s closest comparable product by at least $30 to remain price-competitive. 
• Material costs : Cost to the customer will depend mainly on the types of materials used in their project. 
• Introductory pricing : At launch, advertising and customer quotes will note that any pricing is for a limited time and is subject to change. This allows the company to provide custom pricing and eventually increase prices in the future. 
• Rental Terms : At the company launch, there will be no minimum rental period enforced. After about three months, the company will begin implementing a minimum one-month rental or services. Customers will be offered additional incentives and perks for locking in for three months or more.
• Discounts : The company will extend discount offers to repeat customers. 
• Other Fees : Most quotes will include everything the client needs to deliver, use, and return the rentals. However, additional fees may be charged for tipping bins, losing keys or property, and damaging the equipment. 

Marketing Strategy

R Best Solution will hire a digital marketing professional to oversee and create all digital strategies, including SEO optimization, website content, and blog writing. The company understands how crucial it is for the website to be kept up to date to avoid mixed messaging on services or offerings. 

Social media will be an invaluable tool to promote the business, attract customers, and build momentum for the business. The company and its hired digital marketing team will track critical metrics and data for goal setting, analysis, potential exit strategy, and future sales. 

In addition to digital marketing, R Best Solution will launch the following marketing strategies:

Word of mouth networking 

The company Founders will become active business networkers in the local community. The company will look to participate in related major conferences and events that their target customers may attend. They will also connect with companies listed in the association membership listing to find referrals or customers.

A large portion of the company’s marketing will educate customers about the benefits and need for setting up waste/recycling initiatives on their sites. This will involve creating and sharing YouTube videos, presentations over ZOOM, and events at conferences. Education will be a key marketing theme for R Best Solution.

Hiring Initiatives 

The process of advertising and hiring for employees can be used in the company’s marketing strategy. Posting job opportunities on Linkedin with attractive graphics can increase the outreach of the company and increase visibility and reputation to more potential customers. 

In the future, once the need exists for a physical storefront or offices, signage will be used around the office to further the company’s values, messaging, and offers for walk-ins and passers-by.

Podcasts and radio

Podcasts and audio spots on radio and TV are ways R Best Solution can share its passion and dedication for the environment while promoting the business to a broader audience. 

Marketing partnerships

As strategic alliances and partnerships form between R Best Solution and other organizations, there exists an opportunity for cross-promotions, joint events, referrals, and shoutouts. 

Launch/anniversary parties

These are a great way to celebrate the company’s success within the team and with customers.

Seeking awards and recognition

Awards and public recognition is an effective way for a business to boost its reputation. The company will apply for and seek opportunities for recognition through awards and associations like local business magazines and Top 40 under 40 Biz magazine.

Positioning Statement

For site coordinators in Washington, DC., who struggle to get all their event rentals from one place, R Best Solution is the one-stop-shop for reasonable, temporary event rentals like fencing, portable toilets, and bins with a commitment to environmental sustainability. 

Unlike their competitors, R Best Solution is a locally owned and operated business that offers custom, flexible pricing.

In addition, the company has a solid environmental position that will differentiate them from the competition: 

• The company will actively encourage customers to recycle every step of the way (from initial phone chat and through to visible presence and posters/guidelines at the job site).
• The company will keep confidential data on their customer’s recycling habits (with their permission) and offer incentives and recognition to those that convert 80% or more of their trash to recycling or who can significantly lower their carbon footprint throughout the project.
• The company will dedicate a percentage of profits to global waste initiatives.

Sales Process

Sales leads will come from the company’s online marketing initiatives and through Google Ads. Referrals and word-of-mouth contacts will also be a significant source of sales for the company. 

When a lead comes in, a representative from R Best Solution will contact the prospect to discuss their needs and put together recommendations and a proposal with their custom-priced package. 

Strategic Alliances

R Best Solution plans to create business relationships with a variety of partners and stakeholders. Some of these strategic alliances are to obtain and exchange business referrals, and some support our dedication and passion for environmental sustainability in business. 

Every partnership will be unique and may include social media shoutouts, public relations outreach, and building up goodwill in the eyes of potential customers, investors, and future funders. 

Some partnerships in the recycling industry may have items that can be donated to R Best Solution. The company has already sourced fencing from a local partner this way. 

Potential Corporate Partners 

R Best Solution will partner with construction companies, especially women-owned businesses, those with a strong diversity and inclusion mandate, and those who have similar environmentally friendly values. Some examples of potential corporate partners include: 

• Belle Construction – They focus on small, female-driven projects, but they also help place thousands of contractors in jobs. The female staff at R Best Solution can likely approach, network with, and support groups at any relevant events and initiatives.
• American Association of Women in Construction
• Winners of the 2020 Builders Code awards for diversity and workplace/community championship:
• Farm Credit America and Agricultural America – R Best Solution plans to provide (with customer permission) relevant statistics on disposal, monitor farm industry trends, and use this information to further its environmental messaging and obtain environmental-focused grants. This would be a medium to long-term relationship. 
• Food Trucks – mobile food services are often situated near construction sites, farms, and special events, so there could be collaboration opportunities as the ideal customers for each company align. 

Potential Charitable Partners 

R Best Solution is also looking to partner with other ethical, environmental, and charitable partners to further its environmental initiatives. The following partners are currently being evaluated for possible partnerships or collaborations:

• TerraCycle – American charity “ TerraCycle is Eliminating the Idea of Waste® by recycling the “non-recyclable. ” Whether it’s coffee capsules from your home, pens from a school, or plastic gloves from a manufacturing facility, TerraCycle can collect and recycle almost any form of waste. They partner with individual collectors and major consumer product companies, retailers, manufacturers, municipalities, and small businesses across 20 different countries. They divert millions of pounds of waste from landfills and incinerators each month.”
• Waste-Aid Waste-Aid is an independent UK charity (non-profit) set up by waste management professionals to share practical and low-cost waste management know-how with communities in low-income countries.
• The UNEP International Environmental Technology Centre (IETC)

This organization in Japan supports the implementation of integrated solid waste management systems. 

• BCC Centre for Advanced Wood Processing  

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How to Build an Equipment Rental Financial Model

• January 30, 2023

👇 Check all our resources on Equipment rental businesses 👇

Every business needs a financial model. Whether you want to understand what’s your breakeven , your valuation or create a financial model for the business plan of your equipment rental business, you’ve come the right way.

In this article we’ll explain you how to create powerful and accurate financial projections for a construction equipment rental business with a fleet of 35 vehicles. Note that the numbers, charts and financials come from our financial model template for equipment rental businesses.

1. Forecast Vehicles Acquisition & Lifespan

The first step of any equipment rental financial model is to forecast the actual number of units over time. Units can be vehicles, equipment, tools, etc.

In our example here, we are forecasting financials for a construction equipment rental business that leases heavy vehicles such as: bulldozers, forklifts, dump trucks, etc.

For each type of vehicle, we need to set:

• How many vehicles you will acquire over time, and when
• How much you pay for these vehicles
• How you finance the acquisition of vehicle (leasing, debt or equity )
• How long you expect to use these vehicles
• Whether you plan to sell the vehicles at a salvage value in the future (or not)

In order to do so, prepare a table like the one below, where you can list all the different vehicles, their category (forklift, bulldozer, backhoe, etc.), purchase price, and all the criteria listed above.

The different sections are as follows:

• The different types of vehicles and their category (each category will have a different pricing as we will see later on). For each type of vehicle:
• The number of vehicles acquired, the date of acquisition and the price paid per vehicle;
• The average rental lifespan (how many months do you use their vehicles?) and their salvage value (the value at which you will sell them back at the end of the rental lifespan;
• Debt assumptions: the % of the purchase price that’s covered by a loan (as you will likely have to pay some of it yourself), the interest rate per year and the term of the loan

That way, you will be able to forecast accurately how many vehicles are available. In other words, how many vehicles you can use to rent to customers before you need to sell them back at the end of their rental lifespan.

Equipment Rental Financial Model

Download an expert-built 5-year Excel financial model for your business plan

2. Forecast Revenue

Now that we have estimated the number of available vehicles over time, the next step in our equipment rental financial model is forecasting revenue.

Revenue is the function of:

• Number of available vehicles
• Utilization rate . Unfortunately not all vehicles will be rented at all times: it is practically impossible to reach 100% utilization rate as, for construction equipment and machinery especially, you will need to time between each customer to clean the vehicles and do some maintenance
• Rental price (per day or per month)

1. Number of available vehicles

We already have that (see section 1)

2. Utilization rate

Utilization rate can either be set at category level or for all vehicles. Make sure to set utilization rate month by month to take into account seasonality.

In the end, you’ll be able to forecast accurately the number of rented vehicles vs. the total number of available vehicles over time, as shown below.

3. Rental price

Pricing can be set by vehicle category. For example:

• Forklifts will have an average daily rental fee of $200 and a monthly rental fee of $4,200
• Excavators will have an average daily rental fee of $1,200 and a monthly rental fee of $20,000
• and so on..

Now that you have set all 3 parameters for each vehicle category, you should be able to easily calculate revenue for all vehicles as shown below.

3. Calculate Expenses

In addition to one-off startup costs , you must also budget for all the operating costs of running an equipment rental business.

We have laid out below a clear overview of all the key expenses you can expect to operate a construction equipment rental business with 35 vehicles. Yet, note that the amounts below are purely for illustrative purposes and depend on a number of factors which may not fully apply to you.

Unless you acquired the real estate, you will need pay rent every month. Using our example above, you should set aside $10,000 per month for a 10,000 sq. ft. commercial space (at $10 per sq. ft. per month).

Fleet Maintenance and Servicing

Whether you rent heavy machinery, vehicles or small equipment and tools, you will need to spend money on maintenance and servicing. Unfortunately, there is no average here. The cost depend on the type of equipment you rent, their quality as well as their usage.

Depending on the size of your business, you can employ on-site mechanics and technicians to help with frequent vehicle maintenance and servicing. Alternatively, you can frequently contact an external team to handle everything. 

For example, a crane will cost between $4,000 to $6,000 per year in preventive maintenance. So assuming you rent 35 heavy machinery and vehicles, you can expect to spend the same ($4,000 to $6,000 in maintenance per unit per year).

Therefore, maintenance costs can range from $140,000 to $210,000 per year for such a business. This includes spare parts, technicians’ and mechanics’ salaries as well as any other 3rd party maintenance costs.

Staff costs

Assuming you run a fleet of 35 construction vehicles, you will require about 3 operators at all times onsite for the smooth running of business operations (handling deliveries, cleaning, etc.). This is in addition with other support staff (receptionists, finance & HR, etc.).

For a company leasing 35 heavy vehicles and equipment, here is an example of the number of employees you would need:

• 2-3 personnel dedicated to offering client support (booking, reception); and
• 2 on-site specialist mechanics to help with frequent servicing and preventive fleet maintenance ( $56,000 average salary)
• 3-4 operators ( $65,000 average salary)
• 2-3 sales reps ( $115,000 average salary)
• 2 support staff (HR & finance)
• 2 management (CFO, CEO)

In total, you would incur around $80,000 per month to cover monthly wages of the 12-15 employees including management (including 20% taxes and benefits).

4. Calculate Lease / Debt Interest

Another important part of any equipment rental financial model is to forecast your balance sheet, and more especially:

• Your assets (if you own the equipment / vehicles); and

Doing so will allow you to do 2 important things:

• Calculate debt interest expenses . Indeed, if you purchase some of the vehicles with debt, another important expense will be the financial interest on the loan which you must forecast accurately
• Forecast your cash flow statement . Indeed, as we will see in the next section, one of the most important impact on your cash flow are debt repayments (not the interest itself but the principal repayments instead).

Therefore, make sure you calculate, each mont:

• Any debt drawdown (if you acquire new vehicles with debt in the future)
• Debt repayment (the actual loan repayments)
• Debt interest (the interest expenses that will appear on your profit-and-loss)

In the end, you should be able to obtain something like the chart below:

5. Build your P&L And Cash flow

Once we have forecasted revenues and expenses, we can easily build the profit-and-loss (P&L) from revenues down to net profit . This will help you to visualise key financial metrics such as Gross Profit or EBITDA margin as shown below:

The cash flow statement, in comparison, needs to include all cash items from the P&L and other cash movements such as capital investments (also referred as “Capex”), fundraising, debt, etc.

Forecasting cash flow is vital as it will help you understand how much funding you should get, either from investors or the bank (SBA loan for example) to start and run your own equipment rental business, which we do in our financial model template with the use of funds chart (see below).

In this chart below, we’re showing you an example of a cost structure a 35-heavy vehicle equipment rental business. Unsurprisingly, 80% of total expenses are the actual cost of acquisition of the vehicles, of which the large part will be covered by debt, as well as salaries.

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Moscow International Business Centre (MIBC)

The Moscow International Business Centre (MIBC) is an ambitious engineering project in the centre of Moscow. The site is

Estimated Investment

$12 billion

Construction Started

Moscow, Russia

Project Type

Business complex (city within a city)

CITY JSC, Moscow City Government

The Moscow International Business Centre (MIBC) is an ambitious engineering project in the centre of Moscow. The site is on an old urban area near the river embankment. The goal of the project is to create a new business district within the city.

The whole complex is to be built on a 100ha site (divided into 30 plots) designated for new development on the Krasnopresnenskaya embankment. The management company for the project is CITY Joint Stock Company (CITY JSC), a company first set up in 1992 as a collaboration between the Russian government and private investors.

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The project was first launched in the early 1990s but has been stalled for much of the last 10 years due to a lack of investment. In 2003 the project started to attract investment again and has been gaining momentum ever since.

PLOT 1: BAGRATION BRIDGE AND TOWER 2000 OFFICE COMPLEX

The first major building constructed in the MIBC project on Plot 1 was the Bagration Bridge (pedestrian bridge) and mall, completed in 1999. The second project was the Tower 2000 office complex, a multi-use business complex begun in 1996 and completed in 2001. The building is 106m high and has 30 storeys above ground and four storeys below. The total floor area of the complex is 60,000m².

The underground area contains parking garages, restaurants, retail areas and a fitness centre. Floors 3–15 and 17–26 are business offices while floors 8 and 27 have a media centre, large exhibition hall and piano bar.

The business areas are served by structured cable network, fibre optic cable, satellite broadcasting, Wi Fi and ADSL Internet access, automatic digital telephone exchange with integration of services, local broadcasting system, municipal broadcasting network, electric timing system, data collection and processing system, audio and video systems, simultaneous interpreting system, conference system, video projection system and security systems including biometric access control and a monitoring system.

The tower also has a central air conditioning system, auxiliary exhaust ventilation system, cooler and heat supply systems, Uninterruptible Power Supply system (UPS), automatic fire security system, automatic volumetric fire-fighting system, sprinkler system and automatic smoke removal system.

The general contractor for the tower was Promstroytechnologia-M Company Ltd. The facade of the tower, which is made of glass and structured concrete, was constructed by Transwall Technology. The tower is equipped with 17 computerised rapid elevators, supplied and installed by Schindler Aufzuege AG, and an outer panoramic elevator, supplied and installed by Kone Lifts. The exterior lighting equipment was supplied and installed by Thorn.

PLOTS 2 AND 3: MOSCOW WEDDING PALACE AND CITY SQUARE

The sites designated by plots 2 and 3 are now to be developed as the Moscow Wedding Palace and City Square. This will include a city square, an underground retail complex and a 14 storey multipurpose complex, which will include the Wedding Palace, banquet halls, restaurants, shops and a hotel.

The developer is Capital City Developments. The architect is Mosproject – 2. The construction started in 2005 and is scheduled to be complete by the end of 2007.

PLOT 4: AQUAPARK

The Aquapark leisure complex was started in 2002 and was completed in 2005. The site occupies a 1.74ha area adjacent to Krasnopresnenskaya embankment. It includes:

• Complex of swimming pools, water mountains and leisure attractions, restaurants and cafes and retail areas (24,352m²)
• Five-star, 30-storey hotel complex (54,640m²) built on a six-storey podium containing retail areas, restaurants and nightclubs
• Parking to accommodate 425 vehicles (13,050m²)
• The aqua park will be connected with a mooring on the Moscva River

The developer of the complex was Aqua-City Palas Company Ltd. The project required an estimated investment of $230 million. The general contractor was Liard Stroy Ltd and the designers were Mosproekt-2 of Russia and Tkhomesto Engineering of Finland.

PLOTS 6, 7 AND 8: UNDERGROUND MALL AND METRO STATIONS

A large underground complex containing the central core of the MIBC, an underground mall and two metro stations is located on these plots. Construction started in late 2001 on the 5.1ha site and was completed in mid-2004. The complex has a total floor area of 150,000m² and includes:

• 35,000m² shopping mall
• 20,000m² multi-purpose performance complex
• 10,000m² dancing complex
• 15,500m² sports and leisure complex
• 30,000m² ‘Wonderful World of Entertainment’ theme park
• 7,000m² restaurant complex
• 30,000m² hotel

The complex developer was CITY JSC and the designers were Mosproekt-2. The construction engineers were Bovis Europe and Jones Lang Lassale of the UK.

PLOT 9: CAPITAL CITY PROJECT

This project involves the construction of two connected tower blocks and a dome. The towers will be of 73 and 62 storeys high, with a 16-storey domed building containing an atrium. Connecting the buildings will be a podium building with three storeys above ground and 4–6 below ground.

The lower levels of each tower will be for office space (200,000m²), while the upper levels (above 80m) will be residential and the dome will be used as a retail area. The investment for the project is $250 million.

The developer is Capital Group; the construction engineers are Bouygues Construction and the architects are Erick van Egeraat Associated Architects of Holland. Construction has been underway since 2005 and the project is scheduled for completion in mid-2007.

PLOT 10: NABEREZHNAYA TOWER

This project involves the construction of a new office and apartment complex consisting of three A-Class buildings 16 (86m), 27 (135m) and 52 (250m) storeys high, with a total floor area of 220,000m². The construction began in mid-2003 on the 2.55ha site with the smallest of the three buildings.

The first building was completed in autumn 2004. Enka, a Turkish construction company , is carrying out the development and construction. Enka has invested a total of $150 million so far. Work is continuing on the other two buildings with completion expected in 2007.

PLOTS 11 AND 12: MIXED-USE TOWER BLOCK

The major project on these plots will be a 300m, 75-storey, mixed-use tower block with over 204,000m² of floor space. The facilities will include commercial and government offices, residential areas, retail space, leisure and health centres and a four-star hotel.

Offices will occupy the floors 4–45, while apartments are on floors 48–66. The building was designed as a two-tier skyscraper, 30 floors in the first tier and 37 in the second one. The second floor of the building will be occupied by a casino. The 47th floor will be occupied by a gymnasium.

The designers for the project are Swanke Hayden Connell Architects and the investors are Techinvest, who are investing $270 million. The contractors for the construction are Summa, a Turkish development company. Groundwork was carried out by Kaskatas. Construction on the building started in the third quarter of 2004 with completion scheduled for late 2006.

PLOT 13: FEDERATION OFFICE COMPLEX

The Federatsiya (Federation) office complex is to consist of two towers, one 57 storeys high and the other 87 storeys (345m), and a podium. The 87-storey tower will hold offices and the 57-storey tower will include residential apartments and a hotel. The total floor area of the complex will be 240,000m².

The podium will have three to five levels and 30,000m² of floor space and will contain retail areas, banking facilities, cafes, restaurants and leisure facilities. The complex will have 14 lifts built between the two towers, including four ‘Shuttle’ round-observation lifts.

Stroimontage and NIKoil Financial Group will invest more than $500 million in the project. The architects for the project are P Schweger, S Tchoban and A Asadov of Germany. Stroimontage is the general contractor for the project. Construction started in April 2004 and the complex is scheduled for completion by 2008.

PLOT 15: CITY HALL AND DUMAS

Plots 2 and 3 are owned by the Moscow City Government and original plans were for the new City Hall and Dumas (Parliament) buildings to be located there. However, these buildings will now occupy Plot 15.

The construction on Plot 15 consists of four 70-storey interconnected 308.4m buildings. The project started in November 2005 and will be finished by the end of 2007.

It is expected that all government administration will be accumulated in the new complex to provide better organisation, allowing the buildings currently in use to be sold.

The four skyscrapers will be connected by several two storey bridges between towers and eight storey bridges at the top. The highest bridges will be built in shape of letter ‘M’ for ‘Moscow’.

PLOT 16: RUSSIA TOWER

Plans for a 600m-tall tower to be built in Moscow to designs by British architect Sir Norman Foster were released in March 2006. ST Towers is the developer behind the project and is part of the ST Group.

The Russia Tower will be more than 50% higher than the Empire State Building and is to be built within the Moskva-City development on Plot 16 near the site’s border with the Third Ring Road. It will overshadow the 430m Federation Tower under construction at Moskva-City, which developers say will be the tallest building in Europe when it is completed in 2008.

The 420,000m² tower is a striking design comprising three blade-like structures arranged in a trefoil-like plan around a central core and tapering sharply toward the top, with part of the steel structure exposed on the outside like an exoskeleton.

Described by the architect as a vertical city, the tower is to house parking and retail space on nine underground levels, a public ice rink on the first floor under a spacious, pyramidal atrium, a hotel with serviced apartments above, 24 floors of office, high-end apartments on the top levels and a public observation deck at the very top. The resident population of the tower could be 25,000.

The Russia Tower is billed as an environmentally friendly project, maximizing natural ventilation and lighting, with solar cells, the collection of rainwater and snow to reduce water demand and the recycling of energy between areas with varying levels of demand. In addition, atria several floors high are to be spaced throughout the building’s central core and decorated with plants, providing the luxury apartments on the upper floors with private gardens in the sky.

The construction of the tower is expected to cost about $1.5 billion; of this about $150 million to $200 million would be supplied by ST Towers. Plans for the tower have been approved and it should be finished by about 2010. Construction has not yet started.

PLOT 17 AND 18: MULTI-PURPOSE OFFICE-HOTEL COMPLEX

The multipurpose complex will include two towers (80 and 78 floors), with a common underground space for parking. The high tower will contain office premises and the second tower will be a hotel.

The complex will also contain a roof-top restaurant with a panoramic view, cafes and bars, conference halls and billiard club. The architect is Skidmore, Owinds, and Merrill LLP. No dates have yet been announced.

PLOT 19: NORTHERN TOWERS

An office complex is being developed on this plot by ZAO Severnaya Bashnya. The Northern Towers will consist of three buildings – two 12-storey and one 29-storey. These will contain 135,000m² of floor space.

The architect is Project Institute 2 and the construction engineer is Bau Holding Strabag AG (Austria). Interior design in the building will be carried out by ABD Limited, and legal services with regard to lease documents are provided by PricewaterhouseCoopers.

The first phase of Northern Tower is scheduled for shell and core delivery by the fourth quarter of 2006. The marketing and leasing campaign has already started. Raiffeisenbank has agreed to become the first tenant of the complex.

Northern Tower will feature spectacular atriums, prime office premises and a multi-level parking for 688 cars. There will also be a multi-functional conference hall for up to 200 people, banking premises, restaurants and cafes, a fitness centre with a swimming pool operated by Reebok, a professional dental clinic and a beauty parlour.

POWER PLANT CONSTRUCTION

The power supply for the new MIBC has been a subject of much contention among foreign investors. The complex requires an efficient power distribution system operating at 20kV rather than the more typical 10kV.

CITY JSC and power supplier Mosenergo JSC put forward a proposal in 1999 to the Moscow City Government to develop a new power network for the MIBC, mini-metro, metro junction core, Eurostation and Sheremetyevo-Moscow Rapid Transit System.

The power and heat supply for the MIBC will be provided from three sources: the Mosenergo power station ‘SS-CITY-1’; the district heat and power station ‘Krasnya Prsnya’; and the MIBC power plant on Plot 7A, which entered its first phase of construction in 2002–2003 and is now well into its second phase with completion expected in 2006.

Having established the power supply sources, the next part of the project was the bulk power and distribution network to support the MIBC. Phase 1 of the MIBC power plant has seen the construction of a Gas Turbine Unit (GTU) and Heat and Power Plant (HPP) with a capacity of 50MW and a substation with two transformers for 110V from 20kV and 110V from 10kV and two 63MVA distribution units. The next phase will see an increase of capacity up to 100MW.

The developers of the power plant are CITY JSC and CITY-ENERGO Company Ltd. The contractors for the project are Liard-Stroy Ltd and the designers of the plant were Mosproekt-2 and VNIPI Energoprom.

TRANSPORTATION CONSTRUCTION

The Moscow–Sheremetyevo line is the first phase of the RTS to connect the three satellite airports to the centre of Moscow. This first line, 34.3km in length, will provide interconnectivity between the airport, regional centres and urban junctions and also interconnect with the existing municipal transport system. The project was started in 2001 and eight stations were planned. This stage is now complete.

The developer for the RTS is CITY JSC in collaboration with the City of Moscow; the designer is SNC Lavalin of Canada. The Phase 2 section of the project to extend the line to cover Vnukovo Airport was started in 2004 and is now nearing completion (scheduled to open in 2007).

The RTS development not only concerns rail links to the new commerical centre of Moscow but it is also a development in its own right. The Plot 11 development will include the construction of the new Moscow transport terminal uniting the RTS, three lines of the underground and the intercity bus terminal.

The complex will include transport stations with waiting rooms, boarding areas for VIPs, a hall of customs inspection, left-luggage offices, a 342 room hotel and ticket offices.

For this section of the development Citer Invest B.V. of the Netherlands is the developer, Behnish and Behnish Architekten of Germany are the architects. The investment is $200 million and construction is underway with an expected completion in 2007.

MINI-METRO LINE

A mini-metro line was also constructed to provide transportation within the MIBC and to connect with the historical centre of Moscow. There are three stations, one constructed in Phase 1 of the project and two in Phase 2. The three stations are Dorogomilovskaya, International and Moscow – City.

The length of the line is 5.85km. The engineering and transport contractors were Metrogiprotrans JSC. The line along with the International and Moscow – City stations came into operation in September 2005.

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Moscow International Business Center (Moscow City)

• Guide to Russia

What can you do at Moscow City?

• Dine in style: Moscow City is home to 100+ cafes and restaurants, including Europe’s highest restaurant and ice-cream shop
• See Moscow like never before: Ascend to one of Moscow City’s observation decks for an unparalleled panorama of Moscow
• Admire world-class architecture: Each of Moscow City’s skyscrapers has distinctive architecture and design
• Learn something new: Visit the Museum of High-Rise Architecture in Moscow or the Metro Museum

Moscow City is a multifunctional complex in the west of Moscow, which has come to represent the booming business of Russia’s capital. Its skyscrapers enrich Moscow’s skyline, contrasting the medieval cupolas and Stalinist high-rises. Visitors to Moscow City can enjoy entertainment high in the sky, as the complex is home not just to offices, but to restaurants, cinemas, viewing platforms, and museums.

Photo by Alex Zarubi on Unsplash

History of Moscow City

Moscow City was first conceived in 1991 by honoured Soviet architect Boris Tkhor, who proposed to construct a business center in Moscow. It would be complete with gleaming skyscrapers rivalling those of New York and London, to reflect the new life and growing ambitions of post-Soviet Russia.

The chosen site was a stone quarry and disused industrial zone in western Moscow, in between the Third Ring Road and Moskva River. Initially, the territory was divided into 20 sections arranged in a horseshoe shape around a central zone. The skyscrapers would increase in height as they spiralled around the central section, with shorter structures built on the waterfront to give the taller buildings behind a view of the river. 

Architect Gennady Sirota, who contributed to iconic projects such as the Olympic Sports Complex on Prospekt Mira, was selected as the chief architect, and many other world-famous architects were attracted to Moscow to realise their visions in Moscow City.

What can you see and do at Moscow City?

Where Moscow’s cityscape was once dominated by Stalin’s Seven Sisters skyscrapers , this is no more. Moscow City is home to eight of Russia’s ten tallest buildings, six of which exceed 300 metres in height. More buildings are still under construction there today, including the One Tower (which will be Europe’s second-tallest building). Once completed, Moscow City will comprise more than 20 innovative structures.

Each of Moscow City’s skyscrapers was designed by its own architect, lending the cluster of skyscrapers a unique appearance. Aside from being a site of architectural wonder, Moscow City is a place for leisure and entertainment with over 100 cafes and restaurants, exhibition spaces, cinemas, viewing platforms, and more.

Photo by Nikita Karimov on Unsplash

Federation Tower

• East Tower: 374m, 97 floors; West Tower: 243m, 63 floors
• Completed in 2017
• Architects: Sergey Tchoban and Peter Schweger

The East Federation Tower is the tallest building in Moscow, and the second-tallest building in Europe after the Lakhta Centre in St Petersburg. Visitors can enjoy a luxurious meal of seafood, truffles or steak at restaurant ‘Sixty’ on the 62nd floor of the West Tower, or visit Europe’s highest observation deck, ‘Panorama 360’, on the 89th floor of the East Tower.

Did you know? The ice cream and chocolate shop on the 360 observation deck are the highest in the world!

• South Tower: 354m, 85 floors; North Tower: 254m, 49 floors
• Completed in 2015
• Architect: Skidmore, Owings & Merrill LLP

The South OKO Tower is the third-tallest building in Russia and Europe. Here, you can visit ‘Ruski’ to dine on hearty Russian cuisine cooked on a real Russian stove, and have a drink in the ice bar. Alternatively, visit restaurant, nightclub and performance space ‘Birds’; the restaurant is the highest in Europe, situated on the 86th floor roof terrace alongside an observation deck. The OKO Towers are also home to karaoke club ‘City Voice’.

Did you know? Underneath OKO Towers is the largest underground parking in Europe, with 16 levels and 3,400 parking spaces.

Mercury Tower

• 339m tall, 75 floors
• Architects : Mikhail Posokhin, Frank Williams, Gennady Sirota

Another multifunctional skyscraper, which was designed as the first truly ‘green’ building in Moscow. The Mercury Tower has a distinct geometric shape and copper-coloured glazing, and was the tallest building in Europe upon completion. Visit ‘More i myaso’ (Sea and meat) on the first floor of the tower to enjoy European and Mediterranean cuisine whilst surrounded by greenery. On the 2nd and 40th floors a modern art gallery, the ‘ILONA-K artspace’, has just opened.

City of Capitals

• Moscow Tower: 302m, 76 floors; St Petersburg Tower: 257m, 65 floors
• Completed in 2009
• Architect: Bureau NBBJ

The unique geometric design of the City of Capitals towers resembles stacks of rotating blocks, and is rooted in Constructivism of the early Soviet period (many Soviet Constructivist buildings can be found in Moscow). Visitors to the Moscow Tower can enjoy a range of cuisines – traditional Italian dishes on the summer terrace of ‘Tutto Bene’, Panasian cuisine in the tropical luxury of the ‘Bamboo Bar’ on the 1st floor’, and poke or smoothie bowls at ‘Soul in the Bowl’ cafe on the 80th floor.

Tower on the Embankment

• Tower A: 84m; Tower B:127m; Tower C: 268m, 61 floors
• Completed in 2007
• Architects: Vehbi Inan and Olcay Erturk

After completion, the Tower on the Embankment was the tallest building in Europe, and is now the 13th tallest. It houses the headquarters of several large Russian and international  companies, including IBM and KPMG. There are two cafes located on the 1st floor of Tower C – self-service café ‘Obed Bufet’ (Lunch Buffet) and Bakery Chain ‘Khleb Nasushchny’ (Daily Bread).

Evolution Tower

• 255m tall, 54 floors
• Architects: Philip Nikandrov and RMJM Scotland Ltd

Evolution is Moscow City’s most recognisable tower, and the 11th tallest building in Russia. Its façade is a true architectural marvel, comprising continuous strips of curved glazing spiralling high into  the sky. According to the architect, Philip Nikandrov, the spiral shape of the tower honours centuries of architectural design in Russia, from the onion domes of St Basil's Cathedral to Vladimir Shukhov’s Tatlin Tower, a masterpiece of Constructivist design. Outside the Evolution tower is a landscaped terrace and pedestrian zone descending to the Presnenskaya Embankment, which was also designed by Nikandrov.

Did you know? Moscow’s largest wedding palace was supposed to be built on the site of the Evolution tower, though the project was abandoned.

• 239m tall, 60 floors
• Completed in 2011

Imperia’s interesting design has a curved roof and an arched glass façade. Inside the tower are various cafes including ‘City Friends’ for all-day breakfasts and light lunches, ‘Mama in the City’ for simple meals of Russian cuisine, and ‘abc kitchen’ for European and Indian-inspired dishes. Alternatively, visit ‘High Bar’ on the 56th floor for cocktails with a view. In Imperia you’ll also find the Museum of High-Rise Construction in Moscow (suitably located on the 56th floor), and the Camera Immersive Theatre.

Did you know? Inside Vystavochnaya metro station is the Metro Museum , dedicated to the history of the beautiful Moscow Metro!

• 130m tall, 26 floors
• Completed in 2001
• Architect: Boris Tkhor

Tower 2000 was Moscow City’s first tower. It stands on the opposite bank of the Moskva River, and houses a viewing platform from which visitors can admire an unparalleled panorama of Moscow City. The Bagration Bridge reaches across the river from the tower to Moscow City, and underneath are piers from where you can take boat trips.

Photo by Alexander Popov on Unsplash

Afimall is Moscow’s largest entertainment and shopping complex, home to 450 shops, cafes and restaurants, a cinema, and a virtual-reality game park. The shopping centre is located in the central section of Moscow City, and a cinema and concert hall are currently under construction there.

What’s nearby?

Sechenov Botanical Gardens: The botanical gardens of the First Moscow State Medical University was created for students’ training and research in 1946. Today it is open for free visits, and is home to a large arboretum.

Park Krasnaya Presnya: This park belonged to the Studenets estate of the Gagarin princes. It is a monument of 18th and 19th century landscaping, with Dutch ponds, ornate bridges, and tree-lined alleys. There are also sports facilities, sports equipment rental, and cafes.

Photo by Akkit  on Wikipedia

Essential information for visitors

Website: https://www.citymoscow.ru/

Email: [email protected]

Phone: +7 (495) 730-23-33

Nearest metro: Mezhdunarodnaya (closest to the skyscrapers), Delovoy Tsentr (underneath Afimall), Vystavochnaya (closest to Expocentre)

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Our travel brands include

Express to Russia

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