Thinking about starting an equipment rental business in Arkansas

[PILOON]

Once worked for a rental yard in a suburban area.
In springtime we'd have 25-20 lawn mowers on rental.
Policy was that you brought back the equipment in the same condition you recieved it in. (owner was a stickler to make shure everything was checked out and always did a test run/demo for the client).

Clients rented mowers to spread their topsoil! (did not want to dirty their own mower)
AKA, break the rental one, not my own tool!
I think he made more profit charging $5.00 for a wash down than renting the mowers.

Some tools are much higher in maintainance than others; example is a Kango hammer drill.

A good policy is to rent until revenu reach 2X cost and sell as used (just slightly more than cost) (often warrantee might still apply, that way your equipement is always relatively new and the buyer gets a fair deal.

Seem to recall rates were like 2%/day5%/wk,15%/m (of retal price) as a general rule.

Consumables (saw blades, drill bits etc) also generate a good % of a tool rental's profit picture.
Air tools (nail guns) are a great income generator as well as the nails used. (you buy by the sase and sell by the stick!)

Rent out a nail gun--demo it (bang bang bang) aka; see it works fine!

Good luck,

Remember that you need to always have the equipment in top user shape otherwise you will never get repeats. (and renters shure do talk!)

 

[Cat_Driver]

I'm WAS in the rental business and there are a lot more headaches than you can even imagine with renting out equipment.

I'll just talk about one. Liability, if anything goes wrong and trust it will on a daily basis you will be spending all your time in court. All they have to do is ask one question - " did you train the customer properly on the equipment, now prove it. OH that's you proof - what about balh, blah, blah, could you have done THAT and perhaps the accident would not have happened? Ahhhhhhh, I rest my case your honor. Insurance company pays then triples you insurance or drops you and you never get insured again and then you get to sell all your equipment.

People make a living out of suing people and it doesn't help that lawyers do the work for nothing except what they collect from the insurance company.

People love to mistreat rental equipment they make sport of it. People love to steal rental equipment by giving fake information and have equipment delivered to bogus empty lots as a cover for a construction project. In other words you will HAND DELIVER your tractor to a thief who will thank you and never see you again and your equipment will be in a shipping container to South America within the hour.

Trust me they have more ways of taking your equipment that you have of securing it.

I haven't even touched on break in and stealing you blind, that's always fun.

Oh and as far as cutting the "big guys price" that will never happen. They have bigger pockets and will cut YOUR PRICE by half till you close your doors, they can wait you out, you will never wait them out.

 

[Eagleview]

Bit like rental cars ,

They never need checking

never need to be put in a shed when it's about to hail

can jump medium strips and gutters

can do the best burnouts , handbrakies and reverse donuts

and seem to have heaps more room for empty drink cans and Macca wrappers .

I would poke myself in the eye before I started an Equipment Rental store .

 

[GT2]

Pretty good advise from everyone.
I worked at a rental yard for 10 years. Started in the wash down yard and worked my way to manager.
We were a " high" price rental yard. The reason was because we kept fairly new equipment in stock. Less breakdowns with newer equipment. Once something got to a certain number of hours we sold it (trying to get close to what we paid) then we bought new equipment.
Time is money, you have to be there 7 days a week.
Very dependent on construction, but home improvement tools ( sanders, pressure washers, painters, roto hammers, yard tools, etc) are very lucrative!
High stress job.
Liability is a problem. You MUST instruct each customer EVERY time on the proper use of the equipment. YOU must be schooled on each piece of equipment as well as your employees!
Location Location Location!
The customer is always right.. but he pays for it!
You have to be up front: customer pays for damage ( bigger company's do well with a damage waver charge, tires not included) cleaning charges, fuel charges, late fees etc. These items will eat you alive if not addressed!
Fast friendly in your face service earns you repeat customers, if not they go somewhere else!

You can make some good money in a "growing" good sized city.

If you don't crack the whip on every penny, every purchase, every expense, your employees, ect. you can loose a lot, and not just money!

 

[BruceWard]

Thanks guys, I really appreciate the advice.

I certainly understand that people abuse rented equipment much more than their own.

 

[jinman]

Bruce, if I wanted to get into the rental business, I'd find me a spot and build mini-warehouses. I don't know any decent mini-warehouse that's not nearly always fully rented. You put up the minimum stucture with the most expensive item being the rollup door. If your customers don't pay, you evict and put a lien on their stuff or sell their goods at auction. Set things up so that all your rents come due on the first of the month and you'll see that most of your work is two weeks a month with the rest being slack time for keeping the place looking neat and clean. Except for theft and occasional structural damage, your biggest expense is maintaining an office and opening/closing your access perimeter. Where else can you get people to pay $150+ per month for a 10' x 30' box with no utilities? Find a growing area with new housing developments and build yourself a money-maker.:thumbsup:

 

[BruceWard]

I like the storage building concept and have considered it.

The oppotunity to have more toys to play with is more appealing to me than the probably more senable storage buildings.

 

[PILOON]

My pal is into storage buildings.
6 years now and 9 buildings each with 50 units.
Usually 1/2 rented B4 each building is completed.
Definitely a great investment in the proper location.
His occupancy rate runs at over 95% and that with about 6 competitors within 15 Min's

 

[/pine]

Another positive thing about typical rental storage buildings is the erection process is quite simple and can be accomplished by a crew of 3-4 with little or no experience as long as the material kits are ordered from a reputable supplier...
...And other than the foundation/slab work there are no special (expensive) tools required for a typical assembly...screw gun(s), ram set, step ladders and simple mechanics tools (for setting the doors)

 

[ScottAR]

Do the storage buildings and take the money, buy some toys to build more buildings... much simpler.