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.
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.
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.
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.
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.
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.
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.
If the equipment is damaged or malfunctioning, you should contact the rental provider immediately in order to discuss any potential reimbursement or repairs.