What are Equipment Rental Businesses?
In an era of scaling constructions, heavy equipment acts as the catalyst to the industry. Heay equipment include large machines like bulldozers and turntables.
In 2020, the US held the largest market in equipment rental industry.
Such intensive machinery is naturally priced at quite higher ends. So, renting equipment is budget-friendly and has other perks.
Why Choose Heavy Equipment Rental Companies?
- Well-reputed companies offer great deals on heavy equipment rental. This will help you fetch a set of important offerings at a much cheaper rate.
- Rentals are more cost-effective than one-time purchases.
- Renting will save you from life-long maintenance expenses.
- Renting equipment is wiser as these are needed only for certain durations.
How do Equipment Rental Businesses Gain Profits?
The equipment rental companies’ audience is those not invested in heavy purchases.
Rental businesses make a fortune. Varying from forklifts to mining supplies, people prefer renting equipment.
After 2021, the heavy equipment rental industry has seen an upward rise in the market. The American Rental Association expects a market valued at $60 billion in 2025.
Analysts have placed the market profit between 10 – 40%. But this is influenced by several other factors. Including:
- Demand: The higher the demand, the higher the price. For example, excavators are often unavailable because of their evergreen demand. Thus, services that offer high-demand offerings tend to make more profits.
- Additional Expenses: Equipment that need low and less frequent maintenance tend to bring more profit.
- Physical Location: A Wendy’s just next to a high-rated Chick-fil-a might not make enough sales. Areas that lack equipment rental will, thus, get higher success relatively.
- Increased Mining: The mining industry has been booming to generate electricity. In times such as this, mining supplies are on the hit list. So, now is a good time to have a heavy equipment rental business.
How to boost Heavy Equipment Rental Business Profitability?
- Market Research: Check the industry’s rates and the features that each facility offers beyond the supplies. By offering longer tenure, or lower maintenance rates, you’ll stay on top of the industry.
- Bettered Marketing: Marketing will take you places your offerings won’t. Improve marketing strategies and increase visibility to gain better profits.
- Versatility: This generation has the hots for one-stop-shops. So, if your service includes the widest range of offerings, you’re on the highway to success.
- Added Services: Many archaic facilities don’t have much to offer. If you add extra services to packages, you’ll make more profit. This could include assembling of machinery, pre-rental tests and other services, more clients will flock to our store.
- No extras: Say no to adding unnecessary items that dent your capital.
- Online Operations: Being available online will invite clients from a wider territory. Also, it’ll increase brand visibility.
- Rental software: This will help you manage operations seamlessly, free from errors.
- Add customization: For familiar clients, you can add customized services. This will stabilize your customer retention rate.
Read More:
How to Scale Up your Business with Rental Equipment?
Is it Expensive to run an Equipment Rental Company?
Since we’ve been in the market for decades, this question is not for us to answer. But we’ll breakdown the expenditure and let you decide.
- Space Rent: A store to manage operations and warehouse. If you have your own space, you can skip this part. But this is one of the main expenses required to run a rental.
- Basic Bills: Electricity, gas and water bills form a part of your expenses.
- Delivery Fleet: Vehicles to deliver your offerings. You’ll always need a fleet ready. So, spending on fleet maintenance is a wise move.
- Staff Maintenance: Employee salary to keep your store up and running.
- Paid marketing campaigns: Such strategies boost revenue generation. Thus, spending a dime or two on marketing will bring fortune home.
That’s about it!
Calculating Profit Margin
Let’s calculate.
- Calculate the average revenue you expect.
- Use the formula: Revenue = Vehicles x Utilization rate x Average price per rental
- Now calculate your expenses including bill and rent.
- Finally subtract expenses from revenue. That’s your profit margin.
The Bottom Line
Construction development, hotter weather trends, decreased fuel prices, and advances in technology.
These are fortunate signs for the future of the heavy equipment rental industry.
So, now is a good time to shape your rental service. Seek marketing ideas and scale your heavy equipment rental company to the optimum.
