How to Create a Business Plan for a Construction Equipment Rental Company

No matter what kind of business you’re interested in starting, you’re going to need a well-put-together business plan if you’re going to succeed.

Not only is planning essential to your success, but it’s also something that any lender will have to see before providing a loan to start your business. With a good small equipment rental business plan, you can make a great impression and get the funding you need.

Your business plan should start with an industry overview, which serves as a sort of introduction. This brief section will discuss the general state of the construction industry to serve as a lead in to why you believe that your business will be profitable in this area.

The Industry Overview section should include some publicly available statistics on construction and rental industries, total revenue in the country and the state, growth percentages over the last few years, and other very general information at this point in your plan.

The Industry Overview

Your business plan should start with an industry overview, which serves as a sort of introduction. This brief section will discuss the general state of the construction industry to serve as a lead in to why you believe that your business will be profitable in this area.

The Industry Overview section should include some publicly available statistics on construction and rental industries, total revenue in the country and the state, growth percentages over the last few years, and other very general information at this point in your plan.

The Executive Summary

The executive summary is just that, a summary. In this section, you can go over why you’re interested in starting a construction equipment rental company, what kinds of services you’re going to provide, and some details about your background.

While this is one of the first sections of any heavy equipment rental business plan PDF template, it’s often the best practice to write it last. Because it serves as an introduction to the remainder of the plan, you should have a very firm idea of what’s to follow.

Your Services

Next, you’ll need a thorough description of what your actual services are going to be. In the case of equipment rentals, you’ll describe that you’ll be acquiring equipment to rent to individuals and companies in your area.

At this point, you should consider if rentals are going to be your only service. Most rental businesses sell at least accessories for some equipment and often provide repairs as well. If you intend to provide additional services, you’ll have to include them here.

The Mission Statement and Vision

While this section might seem like a bit of departure from the more practical parts of the business plan, it is expected and will be included in any construction equipment rental business plan PDF templates.

Here, you’ll generally explain that your mission statement and vision are to provide quality service as a rental business and to thrive within the market. You don’t have to make up something about values or principles; you’re here to start a business.

The Structure and Roles

Getting back to the details of how your business is going to run, you’ll have to define what the roles in your company are going to be. Depending on the size of the business you’re setting up, are you going to be the CEO, owner, manager, or all three?

Small businesses could just be one person, or perhaps several who all share in a variety of duties. For larger endeavors, you’ll have to define roles like maintenance manager, rentals and leasing manager, and more.

The SWOT Analysis

SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. It’s a way of looking at your business to find which areas you believe you’ll excel in and which will present challenges.

For your strengths, you might like to mention any past experience in either equipment or business in general. You don’t want to go too far into your weaknesses, perhaps just mentioning that there are plenty of competitors, but make sure to mention how your business plans to differentiate itself.

Your Sales and Marketing Strategies

Here, you’ll have to explain how your business plans to present itself and put itself out there to get started and find customers. Some common strategies might include brochures, a website, social media, or ads in local print publications.

You should also specify who your target market is supposed to be. Are you exclusively renting heavy equipment to construction contractors? Are you renting smaller equipment to mostly homeowners?

Your Sales Forecast

When dealing with lenders, they’re going to want to know how much money your business plans on making. While determining these kinds of forecasts can be difficult, you can often base them on industry averages within your region.

These should be broken down by fiscal year, so basically stating what you forecast your sales to be in the first, second, and third years of operation. Any information about a similar business would be very helpful in putting this together.

Your Pricing Strategy

So you’ve acquired some equipment to rent out, but how much does it cost to rent? Are there additional fees? Do customers have to put down deposits? What payment methods are accepted? These are some important questions to answer in your pricing strategy.

This section should also reference the ratio between equipment costs and rental rates to demonstrate that equipment rentals will be profitable over the lifetime of the equipment.

Your Business Expenses

Of course, your business plan is going to have to include a breakdown of your expected expenses. This breakdown will have to include both the initial expenses of opening your business and the ongoing operational expenses you can expect to continue into the future.

Your startup expenses will play a big part in justifying any loans you’re seeking, and a well-defined explanation of operational expenses will play a big part in demonstrating that your business can be profitable.

If this all sounds like a bit much, you can greatly streamline the process of developing your equipment rental business plan by downloading our straightforward business plan template PDF.

Setting Up Your New Rental Business for Success With Quipli

Even with an effective business plan, your rental business needs careful oversight and the right tools to succeed. Quipli provides an integrated platform that combines your inventory management and online presence to make online bookings that much easier for your customers.

To find out more about the many features of the Quipli platform and what they can do for your business, Contact our Team at Quipli for a demo of online equipment rental checkout software today!

Get Started With Quipli’s Construction Rental Equipment Software Today

How You Can Start Your Own Dumpster Rental Business

With the recent rise in home improvement projects, associated industries have been growing. One of those industries is the dumpster rental business.

Both homeowners and contractors need a simple and easy way to handle construction waste during projects, and more often than not, they turn to dumper rental businesses for convenient and affordable waste disposal.

How Does a Dumpster Rental Business Work?

A dumpster rental business is like many other types of rental businesses, but it also differs in many ways. One of the most important things to consider when figuring out how to start a dumpster rental business is that the business also incorporates delivery, pickup, and waste disposal.

The most common type of dumpster rental is the roll-off dumpster. These make pick up and drop off much faster and easier but require a specialized truck to do so. The dumpster “rolls off” the back of the truck and is loaded back on with a winch.

The process is pretty simple: First, the dumpster rental company drops off the dumpster. Then, the customer fills it with construction or other waste. Finally, the dumpster rental company picks it up. It’s then up to the dumpster rental company to dispose of the waste properly and prepare the dumpster for the next rental.

What Is a Dumpster Rental Company’s Business Model?

Developing an effective business plan is an important step in how to open a dumpster rental store. You’ll have to have a very clear understanding of what your business model is going to be to put that plan together.

A dumpster rental company makes money from rentals and has to leverage that against the cost of dumpsters, trucks, and waste disposal. While this might cause you to wonder, “are dumpster rentals a profitable business?” they generally are and can quickly grow.

To get financing for initial costs, you’ll have to define your dumpster rental business model in your business plan. There are dumpster rental business plan PDF templates available to make this easier. You’ll also have to make sure to properly form your business so that you can get the necessary insurance.

What Are the Costs of Running a Dumpster Rental Business?

When preparing a dumpster rental business plan, it’s important to consider what the costs of getting started are going to be. Among the most significant are going to be the truck or trucks needed for your businesses. These can range widely in cost depending on if you go new or used.

A new roll-off dumpster truck is going to cost over $150,000, while you can find used ones in passable condition for as little as $60,000. This cost is going to be the single largest expense in how to start a roll-off dumpster business by far, and you’ll also have to consider ongoing maintenance costs as well.

Now, where are you going to keep your dumpsters? Are you renting a lot somewhere? Do you own land? Are you buying new land? This need is something else to take into consideration, as these dumpsters do take up quite a bit of space if you’re building up a considerable inventory.

Depending on what scale you’re planning on starting out at, you may also need to hire employees. Paying them will be a considerable ongoing cost that you can’t ignore when figuring out how to start a dumpster business.

You’ll also need to develop an understanding of the appropriate waste disposal rates at local landfills. They’ll probably have different categories for different types of waste, and that’s going to play into how much you charge your customers and what your margins are.

On top of all that, there are several administrative and housekeeping costs as well. You’ll need a budget for advertising and setting up a website, or none of your potential customers will be able to find out that your services are available.

How Much does Acquiring Dumpsters Cost?

Of course, you’re going to need roll-off dumpsters for your business. There are many different types and models of roll-off dumpsters available. Generally, you can find them in sizes of 15, 20, 30, and 40 cubic yards. These will range from 12 to 22 feet long.

You can find them ranging from as little as $1,000 to as much as $6,000 or even more for certain types of specialty dumpsters. You’re going to probably want at least 10 to have a reasonable business plan.

How much does a dumpster rental business make? Well, it all comes down to how many dumpsters they rent, so you always want to have enough inventory for your customers.

How Can My Dumpster Rental Business Reach Customers?

Once you have all of the dumpsters and your truck ready to go, there’s still work to be done. You have to ask how to grow a dumpster rental business if you’re going to get ahead. That’s going to mean making an effective strategy for finding customers.

Having clear signage on both your dumpsters and your trucks with contact information is one of the most efficient ways to do so. Anyone who sees your dumpsters in someone’s yard will know that your business is available for dumpster rentals if they should ever need one.

Providing an optimized website is also important so that anyone searching for dumpster rentals in your area can find you. Similarly, you can try local print ads or direct mail to contractors.

What Kinds of Waste do Dumpster Rental Companies Handle?

Most dumpster rental business ideas center around the construction and renovation industry. Renovations and demolitions are some of the most common activities that generate enough waste to necessitate a dumpster rental but not enough to hire a dump truck.

Construction waste can include a variety of materials. Wood, concrete, brick, stone, asphalt, shingles, and more. Most landfills will simply categorize this as “construction waste” and apply a simple per ton rate to it.

Dumpsters are sometimes also required for landscaping, in which case they’ll be filled with a variety of yard debris. This waste could include trees and other plants, sod, soil, and rocks. Unless it’s soil that’s being removed due to contamination, there aren’t any special considerations needed here.

The Importance of Reservation and Inventory Management

Your dumpster rental business start-up relies on providing your customers with easy access to your inventory. They should be able to know what’s available and make reliable reservations without any hassle.

Inventory is essential to how to run a dumpster rental business. When a customer makes a reservation, you need to know that it’s been effectively registered in your system so that you don’t end up with double bookings that cost you return customers.

Ideally, you should have rental equipment checkout software that handles this part of your business. Inventory management is too important to leave up to chance, so you should be using the best solution available today.

Comprehensive Inventory Management With Quipli

Quipli makes inventory management easy with all of the tools that your business needs to succeed. The integrated system handles reservations and inventory seamlessly, providing easy bookings through your professional and straightforward website.

If you’re starting a dumpster rental business and interested to see what our construction equipment rental software features we offer contact our team at Quipli and Book a Demo Today!

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Leasing Pricing Strategies for Rental Equipment Businesses

When you’re establishing a business in the equipment rental industry, a lot of your success is going to come down to what your pricing strategies are. 

If you’re charging too little, you won’t make much profit or could even lose money, whereas if you’re charging too much, customers will avoid you, and your business won’t thrive. There’s a lot to consider when setting industrial tool rental prices.

What to Consider When Developing Your Pricing Strategy

Much of your pricing strategy is going to come down to your profitability goals. Of course, how much money you’re planning on making is going to play a big part in your pricing. You should have a clear idea about what your margins are going to be for specific types of equipment.

Your goals are far from the only factor in your equipment rental pricing strategy. You also need to consider market conditions as well as the supply and demand for the specific equipment you’re renting. 

If you’re the only game in town, you can charge more. If customers can pick up the same equipment from multiple competitors, you have to be careful not to set prices too high.

Competitor pricing is one of the most effective tools you have to determine rental rates. Other businesses in your region or surrounding regions could have prices that have already been adjusted for local demand, making them a great starting point.

Your company’s expenses also factor into pricing because it doesn’t make sense to have equipment that’s renting for a loss. There are the maintenance costs for the specific equipment to consider, along with the general costs of running your business.

Try Our Pricing Calculator

We built a calculator to help you price your equipment. Try it out by clicking below. 

Use Quipli’s Rental Pricing Calculator

Rental Product Price Calculator

Timeframes for Breaking Even and Making a Profit

The best way to look at your equipment and how to price it is to view each piece of equipment as an investment. You put in money at the start when you purchase it, and you hope to make a profit by the time the investment is through.

Your investment will have rental income coming in to help you break even and make a profit. There’s also any potential resale value when you’re finished with the equipment as well. You’ll have to consider depreciation when calculating your profit based on your revenues and costs.

Basically, when you purchase equipment, your business has spent money but now holds an asset. This asset has a value that goes down or depreciates over time. US tax codes take this model into account, so you need to understand that you’re not claiming the entire purchase price of the equipment as a cost at once.

When figuring out your prices, you should consider that you’ll have to set them such that a piece of equipment can pay itself off within its expected lifetime. When calculating what your profit can be, you’ll have to take maintenance and other ongoing costs into account over the equipment’s lifetime as well.

Cutting Down Costs

If you’ve found that the local market won’t support rental prices that are high enough for you to make a profit, you’re going to have to look for other ways to make ends meet. Increasing prices won’t help once you’ve reached the market price, so you’re going to have to cut your costs.

Seeking out lower equipment prices is one of the most effective ways to do so. There are plenty of ways that you can find used equipment at significantly reduced prices, although you’ll have to make sure that you have the means to accurately judge the condition of new acquisitions.

Insurance is another area where you should try negotiating to lower your rates. You shouldn’t just take the first offer they give you. Ongoing maintenance costs can also make up a significant part of your budget, so try to save where you can.

Take Advantage of Guaranteed Rentals

You never really know for sure what the future will hold, so it’s best to capitalize on any opportunities you have to the best of your abilities. 

This approach means that you should be willing to negotiate to secure long-term orders and understand that this flexibility will help in the long run.  While you won’t be making your full rental rate each day on that equipment, you’ll be faring much better than if it’s just sitting in the yard. 

You should try to know how much you’re willing to budge on large and long-term orders ahead of time rather than making it up on the spot.

On the other hand, you’ll have to stick to your set rates when it comes to regular orders. Once you’ve set your goals and determined what it takes to break even and make a profit, you’ll have to stick to that with customers who are just renting individual pieces of equipment for a few days.

Using Our Equipment Rental Cost Calculator

Quipli has developed an effective equipment rental cost calculator that can help you determine what your rental rates should be. This simple to use tool can take into account many different factors to give you the most accurate idea of what you should be charging.

Using the calculator, you must enter some specific information. This information includes the cost of the equipment in question and the annual costs that you’ll have to pay for this piece of equipment in terms of maintenance, insurance, fuel, delivery, and loans.

You can then enter your desired break-even period for the equipment and your goal for the Return on Investment you aim to achieve during this period. For the best results, you can enter daily rental rates for the same or similar equipment from competitors in your area.

The equipment rental rates calculator then gives you a breakdown of potential price points based on rental days during the break-even period, along with a comparison to your local competitors. By using the calculator for your most rented piece of equipment, you can generalize and determine price points for other equipment as well.

Rental Product Price Calculator

Use Quipli’s Rental Pricing Calculator

A Complete Equipment Rental Platform

Quipli provides an effective solution for all of your inventory management, scheduling, and rental business website needs. You can set up your equipment rental business to thrive with our versatile tools and effective support. 

Reach out to our team at Quipli to Book a Demo Today!

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