March 2022 - Quipli

Equipment Rental Cost Calculator

Published on March 31, 2022

Point is, this industry is growing fast. It’s a great time to be in the equipment rental business.

If you manage your business well, you can see huge growth fast. Thing is, to do that, you need a plan.

You need to run the numbers. One of the things you can do this with, is the cost of your rental equipment.

How much are your loans? How long will it take, at what price, to repay those loans? How should you ensure that you get a good ROI on your equipment?

To help you answer these questions, we’ve created a detailed online calculator. Just plug in your numbers, and you can find out what you’ll need to do to make sure you make a profit.

Our Equipment Rental Cost Calculator Spreadsheet

To help you crunch the numbers, we’ve created an equipment rental cost calculator.

It’s in the form of a spreadsheet, which you can open and use in Google Sheets, Excel, or similar apps. It’s programmed to do the math for you – just enter your numbers, and you’re good to go.

Using Sheets or Excel, you can calculate the best daily, weekly, or monthly equipment rental rates that will get you the best ROI, while still remaining competitive.

So how do you use it? Below, we have a full rundown of what our calculator does, and how to use this simple but powerful tool to figure out how to get the best ROI on your investment into your business.

What you’ll need:

Purchase cost of equipment
Insurance cost
Operating costs
Loan costs
Any other associated costs
Your ROI goal
The period of time over which you want to break even on the loan
Your utilization rate (per day, per week, or per month.)
Your utilization rate percentage (for daily utilization rates, you should enter 100%)

How to Calculate The Price of Your Rental Equipment?

When deciding how to properly price rental equipment, companies should understand the costs of owning their equipment, how often they can expect to rent their equipment per month, and any other costs that may be required.

Pricing for rentals should take the following into account:

Initial cost of the equipment
Any maintenance associated with keeping the equipment in good repair
How often the equipment may be rented each month
Any additional expenditures, such as staff or storage costs

Before pricing rental equipment, it’s important to conduct market research of other firms in your area that offers similar items for rent.

Find out how much they are charging for the rental of their equipment. Identify if there are any discounts offered for longer rental times or if additional costs associated with the equipment are passed on to their customers.

This article will discuss how to properly price rental equipment. It also includes an equipment rental rates calculator that can be used to help you figure out how long it will take to recoup your initial outlay.

Daily vs Weekly vs Monthly Equipment Rental Rates

In our calculator, you can set your rates by day, by week, or by month.

So which is the best option?

In short, the longer the rental, the better the daily rate equivalent should be. Longer rentals are massively valuable as they limit the number of transactions you have to make, and minimize downtime.

On the other hand, higher rates for shorter term periods means you’ll make more on each rental. Targeting customers that have longer rental periods will generally make for a more profitable and sustainable business that’s easier to manage.

Your administration and handling costs tend to be higher for shorter term rentals – keeping in mind that equipment needs to be cleaned, and undergo routine maintenance, between rentals.

There are different ways you can structure this, but daily rates – with weekly and monthly based off of the daily rate – tend to be optimal for most types of equipment rental, including heavy construction equipment.

A good way to do this is to start with the daily rate, then set monthly rentals based on the number of calendar days total in the rental period, plus a slight discount for the longer period. So if your daily rate is $200 for a piece of machinery, and say you’d be comfortable giving a 10% discount for a monthly rental as opposed to a daily one, you’d be looking at around $5,400 for a month-long rental period – a good deal for everyone involved.

You can also consider things like a discounted monthly rate for high-value recurring customers who rent for long term periods. But generally speaking, it’s best to charge by the day.

That way, calculating your equipment rental rates daily, monthly, and weekly in Excel or Google Sheets is also a lot easier.

Product Costs

When deciding how to price rental items, you must first figure out the cost of the equipment you plan to rent. The cost of the item should include the initial outlay for the product, as well as any interest expenses and upkeep costs. Upkeep costs can include storage, maintenance, and an allocation of staff wages as a proportion of the product.

Breaking Even

Your first task is to understand how long you expect it will take to break even with your initial investment in your equipment. Once you break even, your ROI improves substantially because you are renting your products almost purely for profit (with the exception of on-going costs such as maintenance, insurance, staff, etc.).

Return on Investment Goals

There are two different prices you can rent your product out at: at the break even price, or at a price with profit in mind.

If you rent your equipment out purely at your break even price, your overall rental price will likely be lower than your competitors, and thus will be more attractive for customers. However, recouping your initial investment will take more rental days.

Plus, there’s no reason to completely undercut your competitors, though offering a lower price is a good incentive for new customers to choose you.

With the right calculations, you can layer in an ROI goal while you are still in your break even phase.

An Example Rental Cost Calculation Scenario

Say, you purchased 10 pieces of equipment to rent which totaled $100,000.

You want to break even in 2.5 years.

In order to recoup your investment, you would need to rent out your 10 pieces of equipment about for a total of 200 days during 2.5 years at a price around $200 per day.

However – your competitor rents this piece of equipment out for $400 a day. Even lowering your price $50 underneath theirs would be a nice perk for your customer. If you were rent out your equipment at $350, you could recoup your costs in in around 115 days.

But – if your competitor is renting for $400 a day – they are probably renting at a profit instead of breaking even – as should you.

Back to the drawing board:

10 pieces of equipment: initial cost = $100,000

Break Even Goal: 2.5 Years

Competitor rental price: $400 per day.

Your ROI goal: 250% ie 150K on top of your initial investment.

If you rent your 10 pieces of equipment a total of 350 times in 2.5 years at a price of about $400 per day, you would break even in 2.5 years while making 150K.

The key factor is the number of times you think your market requires during this time period. Is renting 10 pieces of equipment for a total of 350 times in 2.5 years seem possible?

If this seems unreasonable, you have a couple levers to pull.

1) Your ROI goal might be too high. If you lower your ROI goal, then number of days you need to rent lowers.

2) Your Break Even Goal: You could increase your Break Even Goal, so that it takes longer to pay off your initial investment. However, rule of thumb is that you should Break Even with your initial investments at a max of 3 years.

3) Your rental price. If you price below your competitors, you may gain an edge in your market which would increase potential renters.

Utilization Rates

Some niches – most commonly construction – price their equipment based on utilization rates. During peak seasons, you might expect some of your equipment to rent out for half of a month. Thus – a 50% utilization rate.

Identifying a utilization rate requires having a strong understanding of your industry, however can be helpful for planning and maintenance costs.

If you are new to an industry, considering just how many days you need to rent during your break even period may be more helpful in that it simplifies what your goals are. Instead of thinking, “I need to rent out my equipment 50% of each month for 2.5 years”, you can replace this with “I need to rent out my equipment for x number of days over 2.5 years.”

Post Breaking Even Period Profit

Once you have reached the end of your Break Even Period, your profit margins will greatly increase since now you are renting almost purely for profit. With the exception of recurring cost such as insurance, maintenance, staff, etc. your equipment is paid for.

Here – you can calculate further your future profit and the calculation is quite simple.

(Rental Price x Expected Days Per Year it Is Rented) – Annual Costs = Annual Profit

What Are the Advantages to Understanding the Profitability of Your Equipment?

Knowing what items in your equipment rental company are generating a profit can help you better understand the mechanics of your operations. If you are consistently generating a regular income from particular items that you rent, you can decide to purchase more of them.

In contrast, if you have items that aren’t very popular with your customers, you may decide not to keep many of them available to rent. Thus, you’ll be able to have a more balanced approach to managing your event equipment inventory.

The equipment rental cost calculator can give you a lot of insight into understanding what benefits your business and what doesn’t. You don’t want to invest in products that have a high product cost and don’t sell well.

In that case, you’d be left with reduced profits or even losses. Understanding the strength of your product mix can help reduce your spending on unprofitable items.

Rental Product Price Calculator

USE QUIPLI’S RENTAL EQUIPMENT CALCULATOR TO FORMULATE A BREAKEVEN POINT

Equipment Rental Pricing FAQ

How do I calculate equipment rental rates?

The best way to figure out how to price your rental equipment is to price it by day, by week, or by month. (Rather than using a fixed rate structure.) Some of the factors to keep in mind include:

Initial cost and/or loan payments
Maintenance cost
Your goal for time to break even
Your ROI goal (what percentage you want to make back vs the cost)
What your competitors are charging for the same equipment

How do I calculate my equipment utilization rate?

To calculate your time utilization rate – that is, what percentage of the time a particular piece of equipment is in use – you can use the following simple formula:

(Days rented)/(days available for rental) = Time Utilization Percentage

The best time utilization percentage to aim for, for your fleet or inventory as a whole, is 75%. Keep in mind that equipment can often be under routine maintenance between uses, or can be in the shop for repairs. No piece of equipment is going to have a 100% utilization rate individually, regardless of the time period by which you’re measuring it.

How do I calculate the cost of my equipment?

The initial up-front cost of the equipment – whether you took out a loan, or bought it outright – is only part of its total cost.

Other factors to take into account include:

Maintenance and servicing
Repairs
Equipment inspections
Unexpected costs, like unanticipated facility downtime or other issues
Upgrades and improvements to the equipment
Depreciation over time

Here’s a formula that you can use for this:

(Total cost of a piece of equipment) x (5% / month) x 13 x 80%

How do I assess my competitors’ rates?

Market research is a big part of tailoring your equipment rental rates. (Our calculator has a section where you can enter what your top competitors are charging.)

To do this, you want to take a look at what’s standard in your area for a particular piece of equipment. This involves looking not only at pricing, but at how your competitors are positioned.

When looking at local competitors, you should ask:

How is a given competitor’s brand positioned? Are they positioning themselves as a premium offering, or are they catering more to customers who are shopping on price?
What prices are customers willing to pay for renting a given piece of equipment? What are typical minima and maxima locally?
Is price a big factor in your target customers’ decision making process? (This can depend on what kind of equipment rental you’re offering, as well as what particular piece of equipment you’re analyzing.)

Wrapping Up

If you are in the equipment rental business, it’s important to have a full understanding of how to calculate rental rates, as well as ways to increase your profitability. Using an equipment rental cost calculator can help you determine your break-even point for each item of equipment that you have. Once you know your break-even point, you’ll be in a better position to set your rental rates.

Quipli offers lots of insight geared towards assisting equipment rental companies who want help in growing their businesses.

Our software includes equipment reservation management, inventory management, and a reporting & utilization data tool. All of these modules can help you put your best foot forward for your equipment rental business. For a free demo of our equipment rental software, contact our team today!

Learn About Quipli’s rental Software

State of the Industry: Resilient Rental Industry Ready for 2022

By Kyle Clements

Published on March 24, 2022

2022 is an exciting year to be in the rental business. In this article, ForConstructionPros talks about industry trends, growth trends, and upcoming challenges to the rental industry.

Quipli’s CEO Kyle Clements talks gives his perspective on the top movements in the industry for the year:

● The power of the internet

● Empowering local entrepreneurs

● Focus on utilization

How to Rent Out Equipment – Your Step-By-Step Guide

By Kyle Clements

Published on March 18, 2022

Do you have construction equipment rental business ideas that you aren’t sure how to realize?

Starting your equipment rental business takes planning and execution. To find success, you must manage inventory, and market your business well.

To start your business on a great foundation, we share this step-by-step guide on how to rent out equipment.

Evaluating the Market

Whether you’re interested in starting a tool rental, or heavy equipment rental business, you need to know who your target customers are. What’s the most rented equipment type in your area? Is there a demand for equipment rentals? These are all important questions that you should find a definite answer to.

An important part of how to rent out equipment is choosing the right equipment type to cater to your local market. If your area doesn’t see much new construction but plenty of renovations, then you should focus on lighter tools instead of heavy equipment. Every local area is unique, and evaluating the specifics of the market is key to your success.

Pricing Your Rentals

Once you’ve determined what types of equipment are in demand in your area, you need to establish your rental business profitability. To do so, you’re going to have to decide what you’re going to charge for your rentals. This task can be more challenging than it might seem.

The primary factor behind your rates is going to be what the market is willing to pay. You can look at similar rentals in your local area (or the broader region) to find this out. If it’s cheaper somewhere else, then you won’t get much business. The other major factor in deciding your costs is going to be how much revenue you need to be profitable.

Determining Your Costs

Your revenue has to be weighed against the costs of running your business. If you’re renting out equipment for profit, you’re going to have a variety of expenses. First, there’s the capital investment of buying equipment to rent out. Depending on whether you’re going with general tools or heavy equipment, this can be a significant investment.

Property for your business is going to be another significant cost. You’ll need to rent some kind of property to serve as your storefront, equipment storage, and maintenance shop. Further costs can include wages as your business grows, utilities, insurance, maintenance, and more.

Acquiring Inventory

Once you have determined your potential revenues and costs and found that your tool rental business plan can be profitable, you can move forward with acquiring inventory. You want to ensure that you get quality equipment while keeping costs as low as possible.

In some cases, used equipment can be a viable option. It really depends on the specific type of equipment. If your equipment rental business will have large numbers of the same type of equipment, you can consider reaching out to mid-level distributors for better deals rather than relying on retail dealers.

Learn How Equipped Saved 10 Hours a Month by Automating Inventory Management with Quipli

Read Our Case Study

Insuring Your Business

Insurance is important for many businesses but absolutely essential for rental businesses. Your insurance will protect you in several circumstances. The first is when equipment is damaged, but liability can’t be placed on the customer. This insurance can really save your business a lot of money on equipment replacement costs.

Second, your insurance will protect your business from potential liability for improper use of your rented equipment. If a customer were to cause significant damage to a building or property with your equipment, you could find your business under fire at some point in the legal proceedings. Insurance can protect you from this scenario.

Establishing a Maintenance Routine

Once your business is in swing, and you’re starting to rent out your heavy equipment, you’ll have to settle into a regular maintenance routine to keep it running. Different types of equipment have unique maintenance requirements. Keeping up with them is essential to maintaining both your inventory and your reputation as a rental business.

Another key component of your maintenance plan will be ensuring that customer maintenance requirements are communicated clearly. Many types of heavy equipment have active maintenance requirements that need to be carried out during the course of a regular working day, and customers need to know what their responsibilities are.

Marketing Your Rental Business

With your business now running properly, it’s no time to get complacent. You should always be focused on growing your business and bringing in new customers. To do so, you’ll need an effective marketing strategy that targets your potential renters. There are plenty of different options that you can take advantage of.

You should have a website that includes search engine optimization so that it comes up higher in search rankings. Social media can also play a role and make your business easier to find. Don’t discount traditional marketing tactics like brochures, print ads, and flyers, either. You might even consider billboards or bus ads, depending on your area.

Writing a Proper Rental Equipment Agreement

It’s important to ensure that you’re properly protected while running your business. That’s why you have insurance, a proper rental equipment agreement, and an equipment rental business license. Your rental contract establishes the roles and responsibilities of you and your customers, and it’s critical that you get it right.

A rental equipment agreement will protect you from costs due to negligent use of equipment by your renters. It also serves as an essential record of rental rates and schedules. You can check out our convenient rental agreement template to make sure you’re covering all of your bases.

Start Your Rental Equipment Business Right with Quipli

With so much planning and commitment going into your equipment rental business, you should implement the best possible inventory and reservation management system.

Quipli provides rental businesses with an easy-to-use and versatile solution that integrates your inventory with online reservations, along with other benefits. You can reach out to our team today to book a demo and find out what Quipli can do for your equipment rental business.

BUILD YOUR RENTAL BUSINESS WITH QUIPLI’S EQUIPMENT RENTAL SOFTWARE

Protect Your Business with This Equipment Rental Agreement Template

By Kyle Clements

Published on March 18, 2022

Careful planning is the most important thing when starting and growing your rental business. This planning needs to cover the company from every angle — logistically, technically, and legally. Nothing should be left to chance when it comes to your business.

Developing a formal construction equipment rental contract is a vital task that your rental business needs to start offering equipment rentals. While this might seem like a challenging task, we’ve got some clear guidelines to help you out.

What Is an Equipment Rental Contract?

Just about every kind of business out there relies on some sort of contract to nail down what exactly the service being provided entails. Defining this agreement is important to prevent confusion between companies and customers and to provide evidence of the nature of the contract if legal action ever needs to be taken.

A construction equipment rental contract is similar to the contracts many businesses deal with but covers both customer and business responsibilities. Considering that you have valuable equipment on the line every time you rent it out, you want your equipment rental contract to be ironclad and incredibly clear.

Need an airtight rental agreement template? click here to learn more

What Should an Equipment Rental Agreement Include?

Your construction equipment rental contract needs to clearly define the terms of the rental or lease in question. It is imperative not to overlook any details when preparing an equipment rental agreement because any ambiguity could end up being decided in favor of the customer if you ever face legal action.

Of course, you also want your equipment rental contract to be clear to make customer relations go smoothly. If a customer understands all of the terms of the rental clearly, they won’t end up disappointed or dissatisfied by any misunderstandings.

To protect yourself legally and keep your customers happy, make sure your construction equipment rental contract includes the following:

The Specific Equipment to Be Rented

Your equipment rental contract needs to specify very clearly what particular equipment is being rented. You don’t want to ever have to deal with a customer returning a similar but different piece of equipment and having only your word against theirs to rely on. Keep in mind that this should include any accessories and attachments as well.

The Length of the Rental

The construction equipment rental contract needs to define how long the rental term will be. Is the user renting your equipment for a day, a month, or indefinitely?

The return deadline should be clearly stated. If you’re arranging without a set end date, you’ll need to define additional terms for billing and what constitutes the end of the lease.

The Rental Rate

Of course, your agreement needs to define what the price is for the rental. This section should include a complete breakdown of the costs, not just a total. The rates should be set for each piece of equipment and be listed as the per day, per hour, or week rate. Don’t forget to be clear about accepted payment methods as well.

Limitations and Liability

Part of running a construction equipment business is dealing with the regular wear and tear and consequent maintenance involved. However, your agreement should have clear limitations defining what is and isn’t allowed, holding the customer liable if they damage the equipment through negligent or inappropriate use.

Insurance Responsibilities

Insurance is one of the most complex aspects to deal with when defining a rental agreement. The contract must identify who is responsible for equipment insurance. Does the customer need to acquire their own insurance, or does your equipment rental business insure the equipment during rentals?

Transportation Arrangements

Every agreement should clearly state who is responsible for transportation. This section is one of the most common sources of disputes between customers and rental businesses, whether the equipment needs to be picked up by the customer or dropped off by the company.

Termination Provisions

As the owner of the equipment, it’s in your best interests to include some provision for terminating rentals at will. This section will allow you to demand the return of equipment in some extenuating circumstances.

Without these terms, you could find yourself without any recourse if you know that customers are misusing equipment or breaching renting terms and conditions.

Renewal Options

With construction equipment, the actual duration that contractors need equipment can vary widely from their initial estimates. This variability means that they could require the rental longer.

Contractors will often look for businesses that provide attractive renewal options. Your agreement should define renewal rates and notice periods for extending the rental.

Maintenance Responsibilities

Most types of construction equipment require regular maintenance that would fall within the typical duration of rental agreements. It’s essential to define these maintenance responsibilities to avoid negligence from customers leading to equipment damage without your rental business having any effective recourse.

Warranties

The warranties defined in your rental agreement show what the primary expectations for your equipment rentals will be in terms of equipment quality and condition. In general, this protects the customer more so than the business. Many customers will be unwilling to rent without well-defined warranties guaranteeing that equipment works as intended.

Contact Us Today to Purchase a Rental Agreement Template

There’s a lot to keep in mind when setting up rental agreements for your rental business. We can make things a bit easier with this handy downloadable rental agreement. Of course, make sure to look over it carefully and ensure that it’s in line with the terms you want to set for your construction equipment rental contract.

Starting Your Construction Equipment Rental Business Off on the Right Foot

Having a reliable equipment rental agreement is an absolute must for your business, but there’s so much more that goes into running that business well. Reservations and inventory management are two of the most important areas to handle properly if you want to succeed.

Quipli provides rental businesses with a dedicated platform for seamless rental inventory management along with a point of sales system and digital growth tools for growing your business. Just contact our team today to book a demo and see what we can do for you.

START YOUR EQUIPMENT RENTAL BUSINESS WITH QUIPLI’S SOFTWARE TODAY

What Your Rental Website Builder Needs to Help You Run a Successful Business

By Kyle Clements

Published on March 17, 2022

Businesses rely on their websites much more today than they did a decade ago. They’re more than just digital business cards now, with so much going into building an effective website. To do so correctly, you’re going to need to find the right website builder for your business.

Easy-to-Use Website Content Management Systems

When evaluating different equipment rental website builders, ease of use is going to be near the top of the list for anyone who doesn’t have extensive website experience. There are many options out there with templates, drag-and-drop functionality, and other features that make the once-difficult task of website building accessible to anyone.

Key Ease of Use Features

There are some features you really shouldn’t be without. Ideally, you’ll find a website builder that has an available customer service team to help with the builder. Here are some of the other key features that you should be looking for to make your website building experience go smoothly:

One-Click Page Composer

You should be able to make a new page with just one click or something close to that. Good website builders have pre-made templates to suit just about any potential need. These website templates should make it easy for you to create modern and user-friendly web pages in no time.

eCommerce Capabilities

Different website builders allow for varying levels of integration with your business. Since your website is for your rental company, you need a website builder that makes eCommerce integration easy with specific templates for that function.

SEO Features

Search engine optimization (SEO) involves catering your website content to what search engines recommend to their users. This design approach involves putting keywords in the right places, including content that is only viewable by search engines. A good builder makes this task incredibly straightforward. Find out how Quipli’s digital growth products can work for you!

Fully Responsive Sites with Mobile Optimization

Most users make the decision to stay on or leave a certain website within 15 seconds. If your website isn’t fully loaded and completely functional within that time, then your customer is gone. A good website builder has the fully responsive layout needed to make things easier for your customers.

You also need to make sure that your website builder optimizes for mobile users. Search engines like Google place a high value on mobile optimization, and over 60% of search traffic comes from mobile devices.

Ability to Add Product Listings, Category Pages, and Subcategory Pages

Most rental businesses start small and grow over time. Your business is sure to add more equipment as time goes on, likely branching out into other categories. Updating your website to reflect these new product listings shouldn’t be a challenge. Instead, your website builder should handle this practically automatically.

It should be just as straightforward to save your rental equipment in different categories as it is with any other eCommerce venture. Quipli makes it even easier with the ability to import product information and categories from an Excel spreadsheet. Our software updates your product listings without any difficulty at all.

Straightforward Payment Integration

Of course, a big part of running any business is getting paid. You need a website builder that lets you accept bookings and payments from a wide variety of sources. It isn’t enough to only accept a credit card for online payments. Many customers will simply move on to a competitor with more versatility.

Today, there are countless options like Stripe, PayPal, and more for online payments. You need an integrated payment system that can let customers pay how they want. Quipli does just that while also making a seamless connection between online reservations and in-person pickups.

Equipment Inventory and Reservation Management

Inventory management is a vital part of any rental company’s day-to-day operations. Given how many customers prefer to book online today, the only way to meet those needs is to have your website builder include an integrated inventory and reservation management system.

Syncing your inventory and reservations is something that needs to be done automatically to avoid mix-ups. You can’t have two separate systems running online and in-person reservations — you need your website to be fully integrated with your inventory.

Rental Software with CRM Integration

Customer relationship management (CRM) is essential for any business to succeed. This need is particularly pronounced in many types of rental companies where repeat customers are among the top sources of business. Many tools can improve your CRM, and you should choose a website builder that integrates those tools.

Among the most important aspects of CRM is to capture valuable data from customer interactions. This capture includes getting email addresses from customers and visitors to provide a direct link for email marketing. If you aren’t using these resources, you’re missing out on one of the most valuable marketing tools available today.

Blog Features

Blogs might seem like they have gone out of style, but they are a very important part of how businesses market themselves online today. You need a website builder that makes it easy to create, manage, and optimize blog posts for your rental business.

All of the content on your website plays a role in search engine rankings. Blog posts are a great way to target specific keywords to cast a wider net and funnel more potential customers through your website.

Customer Support for the Rental Website Builder

Many website builders online today have little to no customer support available. That’s a position that you don’t want to be in as a business that relies on its website for reservations. If your website develops issues, you need to know that there’s someone you can consult with to resolve those issues.

Get Started with Quipli’s Rental Website Builder

Quipli provides all-in-one rental business software for equipment rental businesses. Our software features a built-in website builder that works seamlessly with our inventory and reservation management solution.

The Quipli website builder is easy to use and has all of the features you need to run your business, including our integrated point of sale (POS) system. Contact Quipli today to set up a demo and find out more.

CREATE YOUR OWN STOREFRONT WITH QUIPLI’S POWERFUL WEBSITE BUILDER

How to Improve Your Tool Business Profitability

By Kyle Clements

Published on March 17, 2022

Are construction equipment rentals a profitable business? Well, they certainly can be. The key is to make sure that you have an effective rental business plan in place for improving the profitability of your business. With these actionable steps, you can start your new company off right or revolutionize how you run your established business.

1. Study Your Equipment Rentals Target Market

Among the most important aspects of starting any business is defining who your target market is. You need to know who you’re going to be renting to so that you can get the right inventory and apply the right marketing strategies.

For some of the top equipment rentals, this mostly revolves around the scale of the equipment you’re renting out. Are you going to be renting excavators to contractors or tile saws to homeowners? Keeping your inventory focused on a specific niche can help make your business more profitable.

2. Know How to Price Your Tools to Be Profitable

Pricing is one of the most challenging tasks when it comes to establishing your tool rental business. For the most part, you’re going to have to make sure your prices are in line with your competitors’. If you’re charging more, your customers will likely go elsewhere.

However, make sure that the tools you invest in can be profitable at the rental rates you can charge. You can use our equipment rental calculator when developing your tool rental business plan PDF to get a more accurate view of your potential profitability.

3. Develop an Effective Tool Rental Business Website

Your tool rental business model should include having an effective website in place for your business. Many people today prefer to seek out information about companies online. Having a good website makes you easier to find, especially if you take the time to focus on improving your search engine rankings.

If you don’t have a website, you should get one now. Find a good website builder that has the eCommerce functionality you need. Quipli provides a website builder along with our integrated inventory and reservation software, making it easy for your customers to reserve rentals online.

4. Grow and Scale Your Tool Rental Business Through Digital Marketing

Digital marketing is among the most effective tools for how to grow an equipment rental business. While most rental companies can still benefit from conventional marketing like billboards, newspaper ads, and radio ads, digital marketing isn’t optional anymore. It’s a necessary part of your marketing strategy and can focus on areas like:

Search Engine Optimization (SEO)

Your website doesn’t just cater to customers but to search engines, as well. Using the right keywords and metadata can increase your rankings and get you more visitors.

Pay-Per-Click (PPC)

Along with organic growth, search engines and social media give you the option to pay for advertisements. Google, Facebook, and other platforms have a simple model where you pay based on how many users click on your ads.

Social Media

Facebook, Instagram, YouTube, Twitter, and more are simple ways to get information about your business to your customers. Each one serves as one more potential entry point for customers to find your website.

Many strategies can be used to improve your digital marketing. It’s important to keep track of the analytics that advertising and social media platforms provide. That way, you can find out what works and what doesn’t when it comes to driving customers to your business.

5. Keep Investing in New or Used Equipment

You can make your tool rental business profitable by scaling up your inventory. With more equipment to offer, you’ll be making more money while some costs stay constant. That translates to more profit at the end of the year.

Both new and used equipment can be great ways to reinvest money into your business. Determining whether new or used is the best deal varies between specific types of equipment. Keep in mind when investing in new equipment that your existing equipment will need to be replaced at some point.

6. Maintain Quality Working Construction Tools

Like in any other business, the quality of the goods or services you provide for your customers is paramount. You need to ensure that every customer is receiving working, well-maintained equipment.

This will help drive more business based on your reputation. Keeping up with maintenance also makes your equipment last longer, reducing replacement equipment acquisition costs and improving margins.

7. Have Proper Tool Insurance and Liability Waivers

Not having the right insurance and liability waivers can cut into your tool rental profitability when you end up having to pay for damages that would have been otherwise covered. Damages can extend beyond the cost of replacing tools, so you need to make sure that your business is thoroughly protected.

Insurance is one area you want to have clearly defined in your tool rental business plan. The prices you’ll pay will vary depending on whether you’re renting full-scale construction equipment or smaller home-improvement or landscaping tools. Typical rates range from $500 to $1,500 annually per $1,000,000 in liability protection.

8. Focus on Customer Service and Repeat Business

Customer acquisition costs can be steep and are a major factor in answering the question, “Are tool rentals a profitable business?” You want to maximize the value from each customer, and that means doing everything you can to drive repeat business.

You can improve customer retention by:

Having clear communication to avoid disappointment
Offering customer-loyalty discounts for high-volume clients
Making sure your tools are provided in great condition

The value of repeat customers shouldn’t be underestimated, so you can always do a bit more to make sure they’re coming back.

9. Invest in Tool Rental Software

No matter what kind of business you run, you need the right tools for the job. When it comes to equipment rentals, you need the right software to manage your inventory and reservations. This lets you stay organized and provides you with clear and accurate data so you can understand how your business is doing.

Quipli has the rental business software you need to improve your profitability. With a fully integrated reservation and inventory system, you can rest easy knowing that your rentals are properly managed. You can contact Quipli today to book a demo and find out more.

What You Need to Know About the Latest Construction Equipment Trends

By Kyle Clements

Published on March 17, 2022

The construction equipment rental business covers a broad range of categories. A construction equipment rental business can rent to both contractors and homeowners, with equipment available in many different sizes for a variety of jobs.

Construction equipment trends appear to be headed upward for the immediate future. That means more rentals across the board. However, not all categories of equipment rentals are seeing the same increase. Here’s a look at how the top ten equipment rental categories are performing, based on Google Trends results.

Scaffolding Rentals

Scaffolding rentals have seen a strong 2020 and 2021, much like other construction equipment trends. Used in many different types of construction projects, from all-new construction to home renovations, scaffolding rentals see a relatively constant demand throughout the year.

With most scaffolding rentals peaking around late summer and early fall, it’s still too early to say exactly how 2022 will go. That being said, the early numbers show a stronger later 2021 to early 2022 than the industry saw the year before.

Forklift Rentals

Forklift rentals are one of the rare reversals when it comes to expected construction equipment trends for 2022. The disruption of many warehouses due to supply chain issues means that we could see the demand for forklifts drop in 2022.

Of course, that drop is coming down from record highs in the fall of 2021, so it’s more like forklift rentals are returning to their natural trend. However, the difference between the 2021 peak and the expectations for 2022 is considerable.

Trencher Rentals

Trenchers are used in a wide variety of different projects, and that includes homeowners trying their hand at DIY landscaping and drainage projects. Because of this, trencher rental interest reached an all-time high in the summer of 2020, during a time that saw many residents taking on home-improvement projects.

These construction equipment trends were the same for categories with significant residential use. In 2021, there was an increase from the years before 2020, and interest is expected to be high in 2022 as well, just not as much as we saw in 2020.

Lift Rentals

Lift rentals have seen very gradual growth in recent years, remaining steady compared to other construction equipment trends. Including a variety of standard, articulating, and telescopic boom lifts, this type of equipment is constantly in demand in many industries.

The end of 2021 saw a considerable spike in lift rentals, although it’s unclear at this time if the spike will continue, or if lift rentals will return to their usual trend. While there has been some decrease following the initial jump, interest is still up.

Scissor Lift Rentals

Scissor lifts generally follow similar construction equipment trends to other lift rentals, and have remained steady over the past five years or so. However, there’s been a dramatic spike since the end of 2021. Search interest more than tripled before dropping down to more reasonable (but still high) levels.

With so much interest in scissor lifts, the upward trend is expected to continue into 2022. While the extraordinary spike might not be seen again for some time, it seems that scissor lift rentals are on the rise.

Auger Rentals

Auger rentals are widely used for many purposes, but some of the most common include digging holes for deck or fence posts, along with other residential landscaping and construction purposes. As such, the summer of 2020 saw a huge spike for auger rental interest, similar to other construction equipment trends.

In 2021, there was reduced interest from 2020 for auger rentals, but the trend remained good overall. This leaves the potential for some growth going into the summer of 2022, with a solid foundation based on above-average fall months in 2021.

Mini-Excavator Rentals

Mini-excavator rentals have seen some of the most consistent growth compared to other construction equipment trends, with rentals increasing year over year since 2017. The best year yet was 2021, which maintained growth even over the substantial spike in 2020.

These growth trends are seasonal, with a peak in summer and a significant drop in winter. The summer of 2021 had a significant rise in mini-excavator interest, and 2021 reached new heights, sparking hope for an even better 2022.

Excavator Rentals

Excavator rentals are used mainly by contractors and saw a smaller 2020 bump than other construction equipment trends that were more residential in nature. That being said, 2020 did see a boost driven by an increase in construction projects.

That growth continued through 2021, with the summer of 2021 bringing an all-time high in excavator rental interest. The early days of 2022 are also showing an increase over the same time in 2021, so we could see even more growth this year.

Sod Cutter Rentals

Backhoe Rentals

Backhoe rentals are some of the most seasonal rentals out there, with construction equipment trends showing that rentals are considerably more prevalent in summer than in winter.

They also saw some of the largest increases in interest during 2020, with a spike over 2019. Summer 2021 saw a noticeable decrease compared to the year before but was still up compared to earlier years. It’s still a bit early to say how 2022 will go.

Starting Your Equipment Rental Business Could Be Easier Than You Think

Recent trends show that the construction equipment rental industry is highly lucrative and still has plenty of potential for growth. If you’re looking into starting a business, you need the right tools for the job.

Quipli is an all-in-one platform that provides you with inventory and reservation management, along with an effective ecommerce website builder for your business. Contact our team today to get started!

GET STARTED WITH QUIPLI’S CONSTRUCTION EQUIPMENT RENTAL SOFTWARE

10 Most Profitable Rental Businesses

By Kyle Clements

Published on March 9, 2022

A study by the American Rental Association revealed that the equipment and event rental industry is expected to grow by 9.2% in 2022, 6.8% in 2023, and 4.8% in 2024.

For companies that have suffered significant losses as a result of the COVID-19 pandemic, this is very welcome news. However, company owners must remember that ensuring the profitability of their business is paramount, and before they rent out equipment, they need to include calculating profit as a part of their business plan.

The following is a list of the ten best rental business ideas:

Wedding Event Rentals

Weddings were largely shut down during the COVID-19 pandemic, as large events were restricted due to increased regulation and an effort to contain the disease.

As a result, we can expect pent-up demand for the wedding event rental business. A wedding event rental business is relatively easy to start, as it doesn’t require too much initial financial outlay. Essentially, things you can rent out will include tables, chairs, catering equipment, and decor.

Party Equipment Rentals

People are always able and willing to plan parties. Similar to weddings, many large parties were postponed due to COVID-19 regulations that limited large social gatherings.

As a result, you can expect an increase in parties as restrictions are relaxed. Common equipment rentals in the party industry include bounce houses for children, karaoke machines, tables, chairs, and catering equipment. This field is also one of the best rental business ideas since the initial investment is generally small.

Dumpster Rentals

Dumpster rentals are commonly needed, especially in areas where there are significant remodeling or construction efforts for homes or businesses.

They are also popular for large events or at times when a significant amount of trash is expected. There are two general types of dumpster rentals — stationary and roll-away. Roll-away dumpsters are typically the most profitable since they may easily be latched onto a heavy-duty truck after use.

Car Rental Business

The car rental business can be very profitable, especially in areas close to airports and hotels or located in big cities. If you don’t want to open your own business, you can start a franchise with a corporate rental car company such as Avis Budget Group or Hertz.

In addition to the earnings you’ll make from renting vehicles, you can also include add-ons such as GPS and car seat rentals that will bring in more money. However, car rental companies will need to perform regular maintenance on their vehicles, so it’s important to factor that into your rental prices.

Electric Scooter Rentals

Electric scooters have become one of the most popular rentals in recent years as people need a quick way to navigate around metropolitan areas without a car. There are a number of electronic scooter companies that offer franchise opportunities, or you can start your own.

The low cost of initial investment for electric scooter rentals makes this one of the best things to rent. Make sure to add some helmets and safety gear to protect your customers and increase your revenues.

Canoe and Kayak Rentals

In areas close to rivers and streams where water activities such as canoeing and kayaking are popular, rentals of these items can be very popular. Many vacationers love water activities that involve some exercise, so locating a canoe and kayak rental company close to scenic areas with hotels nearby can be quite successful.

In addition, the low costs of canoes and kayaks make this a relatively easy industry to break into. Things you can rent outside of canoes and kayaks in this type of business include fishing equipment and safety items such as lifejackets.

E-Bike Rental

Similar to electric scooters, e-bikes have become more popular, especially in metropolitan areas. These bikes offer the same features that a regular bicycle does, but they also include a motor and battery designed to assist riders if they get tired when on the road.

The e-bike rental industry is also easy to get into, as the bikes themselves are fairly inexpensive. You can also invest in add-on items, such as helmets and other protective wear that can be rented to your customers.

Tool Rentals

Tool rentals can be particularly lucrative. Many people enjoy making home improvements to their property, but the cost of tools to do so can be excessive. Thus, they turn to tool rentals to minimize the expense of their home improvements.

Investing in a tool rental business can be quite profitable, considering how many people have sought to improve their properties over the past few years. Tools are some of the best things to rent, as they have longevity and can be replaced relatively easily.

Bounce House and Waterslide Rentals

Bounce houses and waterslide rentals are popular for parties and events with children. These types of rentals are generally inexpensive and offer significant returns if the business is managed well.

Most bounce houses and waterslide rentals do particularly well in the spring and summer seasons when the weather is warmer. In the off-seasons, you may want to have other equipment available to rent to ensure steady revenue from your equipment rental business.

AV and Camera Gear Rentals

AV and camera rentals are a great rental industry to get into. People love to rent these types of equipment to capture important moments in their lives, such as weddings and birthday parties. They are also popular with YouTube influencers and producers seeking to create content for social media.

The outlay for a good camera can be above $1,000, making it very expensive for those who expect to use it only a handful of times. However, renting the equipment is much cheaper for customers — and one of the most profitable rentals for those who choose to offer the equipment as part of a rental business strategy.

Getting Started With Your Equipment Rental Business

If you seek to start an equipment rental business, there has never been a better time to do so. Equipment rentals are expected to grow over the next few years, and investing in a business with low barriers to entry can pay off well.

When you’re considering the type of rental company best suited for you, it’s important to look at the profitability as well as the initial capital outlay. Quipli’s modern rental software offers a great solution for those wanting to succeed in the equipment rental business. Contact us for a free demo today.

Starting a equipment rental business from scratch? Learn more about the process with our guide on how to rent out equipment and learn about the top KPI for a rental business.

How to Grow an Event Rental Business – 7 Growth Ideas

By Kyle Clements

Published on March 3, 2022

One of the main pieces of advice for any rental business idea and for any event rental business is to think about how you are going to scale your business. Every business starts out small, but with careful planning and some well-defined goals, you can start to take things to the next level.

Find the Best Way to Promote Your Event Rental Business

Businesses rely on various types of marketing and promotion to get the word out there to potential customers. This isn’t something that you should approach without an effective plan. You need to identify who your core customers are and find a way to reach out to them effectively.

Some businesses might rely on flyers or word of mouth, which can work in some situations. However, the main focus for how to grow an event rental business today is on social media. Your business should have accounts on major platforms like Facebook and Instagram, and you can even consider using their paid promotion programs.

Build an Event Rental Business Email List

You might think that using an email list is how to grow a party rental business the old-fashioned way, but email lists are some of the most powerful tools that businesses have. They provide a direct line to people who have been customers in the past or are interested in your business, giving you high-quality leads.

You should always try to get customers to sign up for your email list. You can frame it as signing up for a newsletter or future discounts and offers. In either case, you’re accomplishing the same task. Your email list is a promotion resource that puts you in complete control rather than relying on the whims of social media algorithms.

Maximize Your Profits by Buying More Inventory

So let’s say you’ve done a great job promoting your business, and now you have more customers. Do you have the inventory to meet that demand? An important part of how to expand your event rental business is to continuously reinvest in your business, building up a larger inventory to serve more customers.

You should have a concrete plan for inventory acquisition. Identify which of your rentals are being rented the most. If you’re at low or no available inventory for some items, focus on that area rather than something you always have available.

Focus on Leveraging Yourself When Hiring Event Rental Help

As your business continues to grow, you’re going to need more event rental help to keep up with the increased work. Being able to delegate and let someone else handle certain tasks is one area where many business owners struggle. They hold on too tightly to the adage that if you want something done right, you need to do it yourself.

When finding help, you’re looking for people that let you leverage your unique skills. Don’t try to find someone exactly like you, but someone who complements you. That way, you can focus on what you do best and how to improve your party rental business.

Maintain Great Relationships with Local Event Planners and Venues

Having an extended network of event planners and venues will make the job of figuring out how to market your party rental business a lot easier. By working with these individuals, you’re expanding your opportunities and putting yourself at the forefront of their minds when they need anything that you can provide.

These kinds of referrals can make a huge difference in how quickly you can grow your business. They can have a snowball effect; the word can rapidly spread about your event rentals, providing you with a steady stream of new customers.

Create a Customer Loyalty Program for Your Event Rental Business

Finding new customers is one of the most challenging aspects of growing any business. In most cases, it’s better to devote time and resources to driving repeat customers. You could consider implementing a customer loyalty program to incentivize customers to keep coming back for your event rentals.

By keeping track of your customers, you can provide discounts or other benefits as they continue to return. This is a great opportunity to get them on your email list, too!

Grow Your Rental Business Using Technology

Having the right tools for the job will make growing your business that much easier. Quipli has the tools and resources you need to do just that. With seamless rental inventory software, online equipment rental checkout software, straightforward payment processing, and messaging, every interaction with your customers is that much easier. Reach out to Quipli today to get a quote on our solution for your business.

How Does a Rental Business Model Work?

By Kyle Clements

Published on March 2, 2022

Rental businesses are thriving across many industries, with new opportunities emerging every day. However, anyone looking into starting a rental business needs to understand the importance of having an effective rental business model in place.

What Is a Rental Model?

A rental business model is different in many ways from other types of businesses. The conventional business model will be based around the sale of either goods or services. A retail store might purchase goods from a supplier and then sell them physically in-store to customers.

This can also be applied online or in other ways, but the fundamental core of the business model is buying goods and selling them at a higher price.

Services, whether from an electrician, a doctor, a painter, a lawyer, or anything in between, use a different model. Service businesses perform specific tasks, relying on the time of skilled professionals to generate revenue. While there are material costs as well, that’s the basics of service business models.

Rental business models are different. These businesses purchase equipment, from construction equipment to watercraft, depending on their niche, and rent that equipment out to customers. These customers pay a certain price per hour, day, or week, and that’s where the rental business gets its revenue.

The rental business needs to ensure that its business model will generate higher revenues than the cost of purchasing and maintaining equipment. There are other factors like utilities, rent, and so on, but the most important point is whether a purchased piece of equipment will generate more in rental revenue than its cost for purchase and maintenance.

Are There Different Types of Rental Models?

The core of every rental business model is based on generating revenue from rentals, but there is a wide variety of ways that businesses can achieve that. These are just some of the various rental business models that you could choose.

Brick-and-Mortar Rentals

Many rental businesses are based in physical locations and derive most of their revenue from walk-in customers. This has been the conventional rental agreement model for a long time before technology allowed for other possibilities.

These types of businesses have to either own or rent a physical location to serve as their storefront and a place to keep all of their equipment. Since most rental businesses need space to keep inventory anyway, having a physical storefront makes sense.

Bricks-and-Clicks Rentals

This type of rental business model refers to a hybrid online and physical business. This can mean a few different things in practice. Depending on the type of rental equipment, customers could order online and have it shipped. It could also mean that the business uses an online reservation system to facilitate business with its customers.

Given that rental businesses in almost any industry need an online presence to succeed, it only makes sense to add some real functionality and derive value from online resources in your rental agreement model.

Peer-to-Peer Rentals

In many ways, peer-to-peer rental business models are more about developing a platform than renting equipment. These businesses allow individuals to rent items to other individuals, using the business as a kind of marketplace.

This kind of revenue-sharing rental model can work in many industries but comes with challenges as well.

A revenue-sharing rental model is a big departure from classic rental business models and might not be right for individuals unfamiliar with more complex business practices.

What Is the Best Rental Model for My Business?

There isn’t any clear-cut answer as to which rental business model is best. They all have their own benefits and drawbacks, with many being suited towards renting certain types of equipment. However, there are some key points you can keep in mind when making your decision.

The first is the nature of the specific items you’re renting out. If your equipment is restricted to distribution in the local area, then having a physical presence where customers can pick up and drop off equipment would be sensible.

Rental business owners should make sure not to discount the value that a hybrid model can bring to their business, no matter what industry they’re in. Construction equipment, wedding rentals, vehicle rentals, and more can all be presented to your customers more effectively with rental business management software.

Having your stock accessible online will have more customers finding what they need and reserving a rental with your company. Many consumers out there prefer online booking versus calling a business, so giving them that option makes you that much more likely to make the sale.

How to Price Your Rentals?

Pricing is a critical factor for any rental business model. It can be a challenging task to determine your rental product pricing because there are many factors at play.

The prices that rental businesses can set are dictated by market forces. These are complicated but basically come down to the fact that customers won’t rent from you if they can rent elsewhere cheaper.

This sets an effective maximum for rental prices on any specific piece of equipment. The other factor to consider is the minimum.

You need to determine what rental price will allow you to not only recoup the purchase cost of the equipment but to turn a profit as well. Your rentals will also have to supply revenue to offset utilities, rent, wages, and more.

If the minimum rate that you determine for pricing certain equipment is higher than the maximum rate dictated by the market, then that specific piece of equipment isn’t viable. Instead, your business will have to find other options that have viable price points to keep your business running.

What Is the Best Rental Business Management Software?

Managing a hybrid rental business model can be a significant challenge. This is particularly true if you’re trying to manually balance online and in-person reservations. Instead, you can streamline the process with rental business management software.

Quipli provides versatile rental business software that makes inventory management and reservations incredibly easy. You can reach out to Quipli today to find out more about what our solution has to offer.

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