Looking for some advice on starting a rental equipment business. First i should say that I am wanting to start out small and do this on the side while keeping my day job. I am in project management with a civil construction company. My work in this field is where ive recognized how much equipment costs to rent vs. what a decent used machine can be bought for. One thought was to start with a few mini-ex's and skid steers, smaller equipment. The problem is this seems to tend to be rented on a more daily basis and would require hiring an employee or for me to take it on full time to deal with the in and out daily type customers. My thought is to start out by buying something like a small dozer, something that is more likely to be rented for a week or a month or more. This would allow me to deal with the business in the evenings or weekends from home and not require a storefront at first. I could set my rates cheaper than the rental companies because of my lack of overhead and should still be profitable. The main problem I see is advertising. I can't very well run an ad for a rental company in the yellowpages; and then have people call and explain that I only have one piece of equipment for rent. I know a good many people in the field so word of mouth may be plenty but I don't know. I also see places like machinery trader which allows you to post equipment for rent; but i'm not sure how many people actually look there when they need a rental machine; I know I never have but maybe some people do. Are there any other ways to advertise a single piece of equipment for rent other than finding a lot on the side of the highway to park it with a rental sign on it? Would you want to deal with renting from a small time operation like this to get a good rental rate or would you pass right over me and head to one of the big rental stores because thats what you are used to? Looking for some opinions; does this seem like a decent idea to get a rental business started on the side with the intentions of growing over time as profit comes in; or do I sound like I'm setting up for failure?
The brick and mortar type establishments are where you would have the most overhead. If you can do it from home, you will put a tremendous amount more in your pocket. The downside is that a large amount of people renting: 1. Need something on the spur of the moment. 2. Need delivery of the equipment. Most anything can work though if you throw enough money at it.
Dirtroad is right. Most are spur of the moment. Delivery can be contracted out and the cost passed through usually. My advice would be to VERY aware of staying ahead of getting paid. The customers you will attract in the beginning will be the ones who have been kicked out of the established companies or can't afford the prices there. New guy/new blood.... You should be able charge less than the normal companies. Keep in mind that some contractors do rent bare as well. They would be your price point.
You may want to consider also; re-renting, leasing and perhaps brokering. But a component of the endeavor you have left out is: what if your equipment you have on rent breaks down? You are at your day job and you get the call. What do you do? Who and how much are you going to have to pay to repair and maintain your fleet? Especially when broken down. Ticked off customers rarely return. What will the cost of pick-up and delivery set you back? Your own trucking or outside hauler? And if someone decides not to pay? What will that cost in time and real money? In my experience, start-ups that don't jump in feet first and all the way usually go belly-up from having to credit their customers for breakdowns and other issues that keep the customer from completing their job. A contractor that has a few pieces of equipment that are not being used currently at other projects may rent out that equipment for the purpose of ROI but other than that, it seems that attempts at what you are contemplating rarely reach fruition. Having said that, I wish you the best fortune at your mission. There are some companies that have succeeded and eventually thrived at what you are thinking of starting. Their true awards seem to come when they sell to larger companies that buy their market share. What you are considering is definitely obtainable, I wish you good luck at the part-time aspect.
I think a weekend warrior type rental is where most of the money is at. Even small private stores around here are for the most part have the same stuff as the big boys. Except for the large equipment, they have skidsteers ,mini ex's, kubota type tractors and lot of attachment for said equipment. Tons of small tools, generators, water pumps, concrete tools. one even has a small ready mix u haul concrete .
Rental Biz We have done a little of what you are talking about and it will work. I quit because I don't like sitting in an office........and I have a low tolerance for dumbaxx. Here's my top 3 Pieces in order: 5X10 Dump Trailer with 9990 GVW. ASV RC 50 with attachments Vermeer LM 42 Trencher/cable plow If I was going to add something to that I would try a: 27 or 35 mini ex with a hammer and hyd thumb + lots of buckets vacuum excavator Small 4x4 tractor (30 to 40hp) with harley rake, kilifer blade with laser, tiller, etc. You should be able to haul all that equipment on a trailer rated at 9990 which will be under cdl in every state I believe. If you cater to the weekend warrior crowd you won't have to cut your rates. Drop off by noon on sat-pickup after noon on sun. Charge a one day rental and it fits your job. Getting one full price rental a week is pretty good for a part time deal. The other way to do this is find a couple of contractors that have a need but are not big enough to justify buying a piece of equipment.
I think vermeer makes a vac excavator trailer that can be hauled by a 1 ton. I don't know that they are effective as a semi truck sized mounted unit though. Thing is with them, your not likeliy to be renting to johny homeowner, your renting to another contractor. If your starting a rental biz with used equipment, hows your mechanical skills?
The trailer mounted vac is what I was talking about and staying away from johnny homeowner isn't a bad thing if you want an edge in renting to contractors. A couple of contractors could keep one of these things pretty busy I think. Or I have enough faith that I wouldn't be scared to put my money in one. As far as effectiveness, I would compare it to a shovel. That is what most people are locating with around here and shovel help is getting harder to find. I think those are the people who would rent a vac. along those same lines: A couple of builders could probably keep a small tractor and harley rake going, a couple of landscapers could probably keep a LM 42 busy,etc,etc. Of course all areas are different. There is no law that says you have to sit on you butt and wait for people to come to you. In your time off, get out and drive around and talk to some contractors and see what they need.......and would pay to use. If I was in a bigger area I would probably go with a small dozer with a machine control. [/QUOTE]If your starting a rental biz with used equipment, hows your mechanical skills?[/QUOTE] There is a difference in junk and good used equipment. If you buy junk your going to have it sitting in your yard, a guy here already tried that. But I also think your pissing your money away buying new in most cases. This stuff is going to get beat on pretty hard. You can buy new and have a piece of equipment that is beat at 1000 to 1500 hours or buy used and have a piece that is beat at 2500 to 3000 hours. Of course there are some things that need to be bought new like trailers. That's my opinion anyway. You can put a pencil to it and justify almost any way to do it.
Maybe something like a vac excavator is a good idea; something more specialized that most contractors don't want to purchase but would like to be able to rent when the need arised. We had one at the last company i worked for; it sat unused a lot but when needed it was very handy(btw yes it could be hauled with a pickup; was fine behind my 3/4ton and could bepulled by a 1/2ton empty)... I'm trying to think what other products might fall in a similar category of stuff most companies don't own but need on a occasional basis; skid steer attachments come to mind...
Not sure how I would effectively advertise this; seems like a homeowner will pull out the yellow pages and call the company with the biggest ad; or stop by the store he passes everyday on the way to work because its familiar. Maybe; maybe not? Any ideas on how to advertise this effectively?
I could do my own oil changes and basic service between rents; I can change hyraulic lines and things of that nature. Large service and breakdowns, especially when out on rent, though would definately cost me; and ive thought about that; I know service calls can cost big money, i guess thats just a cost of ownership thats got to be figured into rental rate. Hauling;if its big equipment i'll just plan on hiring it out and passing the cost on; thats the way its always been when ive rented from the big rental stores so figure this would be the same. Small equipment hopefully I could deliver/pickup myself in the evenings and on weekends, again this can come to be a problem with how spur of the moment is the renters need for the equipment. I currently own a 7k trailer and unfortunately just downgraded to a 1/2ton truck from a 3/4ton; if that becomes an issue i'll just trade in again i guess. On the other hand because of this maybe i should just start with a small mini-ex or two that i can haul myself with stuff Ialready own. It would be a smaller invetment to start with and I could probably get away with having them stored at my house in the begining as opposed to paying rent on a storage lot.
If your starting a rental biz with used equipment, hows your mechanical skills?[/QUOTE] There is a difference in junk and good used equipment. If you buy junk your going to have it sitting in your yard, a guy here already tried that. But I also think your pissing your money away buying new in most cases. This stuff is going to get beat on pretty hard. You can buy new and have a piece of equipment that is beat at 1000 to 1500 hours or buy used and have a piece that is beat at 2500 to 3000 hours. Of course there are some things that need to be bought new like trailers. That's my opinion anyway. You can put a pencil to it and justify almost any way to do it.[/QUOTE] My thoughts on the used equipment: Its not like I'm buying something for me where I want to be the one to get to enjoy the newness of it, it just business. I think the best deals can be had on low hour used equipment with lots of life left; as a rental its just gonna get beat on anyways,might as well already be broke in. Of course i'm not gonna buy something thats already worn out and try to rent it. The other side is that I don't want to take the initial depreciation hit of a new machine. If I try this idea out and it doesn't work out for me the majority of my money is tied up in a machine that is fairly easily resold to regain a good chunk of my investment.
There is a difference in junk and good used equipment. If you buy junk your going to have it sitting in your yard, a guy here already tried that. But I also think your pissing your money away buying new in most cases. This stuff is going to get beat on pretty hard. You can buy new and have a piece of equipment that is beat at 1000 to 1500 hours or buy used and have a piece that is beat at 2500 to 3000 hours. Of course there are some things that need to be bought new like trailers. That's my opinion anyway. You can put a pencil to it and justify almost any way to do it.[/QUOTE] My thoughts on the used equipment: Its not like I'm buying something for me where I want to be the one to get to enjoy the newness of it, it just business. I think the best deals can be had on low hour used equipment with lots of life left; as a rental its just gonna get beat on anyways,might as well already be broke in. Of course i'm not gonna buy something thats already worn out and try to rent it. The other side is that I don't want to take the initial depreciation hit of a new machine. If I try this idea out and it doesn't work out for me the majority of my money is tied up in a machine that is fairly easily resold to regain a good chunk of my investment.[/QUOTE] My thoughts exactly.
what are your thoughts on insurance? We just lost a couple of machines this past week. 50 or 60k loss on any machine will be a big loss. What are your connections to the local cops? For when customers don't pay or won't return your tractor. Rental is a very dangerous biz. Many times I worry about customers renting machines to get to the service truck I drive. You need to prepair for anything ie; theft , vandelism, fire, floods, and any thing else. We have had machines started and driven off cliffs for the fun of it. I had a for likft with the boom extended runn into the power lines with a brick on thw gas pedal. Every bearing on the machine had to be replaced. Do you have the cash for and incedent like this. Not trying to squash your vision but, I have seen a lot of the bad rental side.
In this modern technologically advanced world we live it advertising and getting your name out isn't too terribly difficult. With websites, Facebook and all the other media stuff it's not bad. GPS on everything help, one of my customers can tell you where every piece of iron is as well as what it's doing or not doing. Insure the crap out of each piece and make the customer provides theirs or do an additional charge to insure like the bigger places do it. Most of them explain it on their sites. There are trade groups, shows, etc for the size and type of company you seek as a customer. Make some cold calls, stick your head in some landscaping, small utility and grading outfits and tell them what you're doing and see what they have to say. As you dig into it here and there a picture of what might work should form. I grew my business on demand and it wasn't exactly what "I" wanted to do but it worked nonetheless. Also, make darn sure your rental contract spells everything out and covers your behind should you have to go after somebody for damage or non-payment. I think it could work quite well, we have a small place here that does a good business. You'd be surprised how many lower priced things they rent like crazy. Air compressors, post hole diggers, little dump buggies etc. You'll need a good power washer to keep things clean and presentable. Stickers made to remind them to check oil, bring it back full of fuel blah blah. I could go on and on! Good luck! Junkyard
I have 16 skid steer attachments that I USED to rent to a selective group of small contractors at a low rate with the understanding of you break it you fix it. That list is now down to 1, me and my partner. The straw that broke the deal for me is when my longest customer and good freind got my ASV100 and FAE mulch head (1/2 day for $200) with the MTL packed solid with mud up to the bottom of the fenders. He did get the water hose out and after about a half hour he had somewhere he had to be. I told him then and tere that I would do his mulching for him for a flat $125 an hour, NO MORE RENTAL. After two more hours of cleaning I put it up still dirty. I went by his house and he was home. Last time he rented my Harley rake he droped it off and told my farm helper that it seemed to be leaking oil and then he left. NO MORE RENTAL.
Due to a change in career, I am looking to rent or lease my construction equipment. I will only need it for approx 60 days a year and would like to get some money out of it the during the rest of the year. I have a good idea of how to go about it, but I have a question about insurance; the local insurance quotes I am getting are prohibitively high. Does anybody deal with a national company that deals with providing rental equipment insurance? I will be renting a little bit of everything: mini to large excavators, hydraulic hammers, loaders, etc.... Thanks in advance.
Try Erie Insurance. You will need general liability with an equipment renters rider. Tell them that you only want it for how ever long. You will need to specify the maximum dollar amount of rental equipment that you will need coverage on at any one time. That takes 1-2 weeks to get set up and some $. You will need to fill out a renatal application/agreement with the rental company. That will take about a week. When you line up your rental equipment you will need make, model, and S/N to give to your insurance agent and he will do an accord with the rental company named as covered. It is just paperwork and $.
We run f450 6.7 diesel with service beds no cranes 24 dollar an hour guys to do field repairs on equipment, johnny homeowner is the worst ones. Trashed a 35D excavator after he swung into his own house.....and it collapsed on the machine.Then you have to worry how they gonna pay for damaged equipment. Going into business for myself then see something like that changed my mind ...
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