5 Steps To Grow Rental Hire Business Without Losing Effectiveness
So you have an equipment rental business or thinking of starting one? Running any business is not easy. Especially with a rental business, you need to consider procuring high-value assets and renting them out regularly while ensuring the equipment is maintained in tip-top shape and is utilized each and every day where possible.
Follow these 5 steps from Viberent to ensure your day-to-day operations are as smooth and efficient as possible.
Step 1: Talk To Your Customers
Whatever your rental business is, it is important that you talk to your customers directly and get first-hand information about their requirements such as type of equipment, their pricing affordability and frequency of rentals. If you are in mobility rental business, talk to local hospitals or nursing home or retirement villages. If you are in scaffolding rental business, talk to builders, construction companies.
You may wish to raise questions such as:
- What kind of equipment do you own vs you wish to rent? Basic or high-end? Dry rental or wet rental?
- Any specific type or brand or manufacturer?
- What rates are you currently paying for such equipment? Get an estimate of how much your customers are able and willing to pay.
- Do you need more than rentals? Do you require a regular service or maintenance requirements for the equipment?
- Do you require people along with equipment?
Step 2: Procure Best Equipment For The Best Deal
Your rental inventory is going to make you money and it is a source of livelihood for you and your staff. In a typical rental business, over 80% of startup costs is spent on equipment purchase. Therefore, it calls for wise decisions when purchasing equipment for rental purposes.
- Based on the segment of customers, you may wish to get separate equipment; for high-end customers, perhaps get the brands they recognize and are familiar with; for budget conscious customers, perhaps go for not-so top of the range or even consider buying pre-owned equipment in good condition
- Do you want to own the equipment out-right or lease it? There are plenty of options to finance the leases that reduces your risks significantly
Let the existing equipment start making you money. You can always go and procure more equipment as you start making money. Your first priority should be to avoid idle inventory that is gathering dust and not gathering money.
Step 3: Rental Revenue + More
If you solely rely on equipment rental revenue alone, you are missing out on opportunities to diversify your income streams. Customers would prefer to work with rental companies that not only rent equipment but also provide ancillary services such as servicing / maintenance on equipment (e.g plant & machinery), personnel for operating equipment (e.g forklift drivers) etc.
Initially, if you don’t have in-house personnel for providing such services, perhaps you can consider establishing partnerships with other local businesses that provide such services. For example, if you are a party rental business and do not have audio/visual gear, you can partner with a local AV rental company and procure items for your customers. This way, you will be satisfying all your customer’s needs and generate additional revenue for your business.
Step 4: Back Office Stuff – Invoicing, Legals and More…
Lets face it. Doing back-office work such as invoicing, rental agreements etc is not everyone’s cup of tea. Sending invoice with your initial rental is not enough. What if it’s a long-term rental? Are you sending regular invoices such as once a fortnight or once a month? Your customer wouldn’t care about your cash-flow. You should. What processes do you have in place to raise invoices and other paper-work regularly?
Its no good having expensive rental equipment at your customer site and not having anything to protect you in case your customer doesn’t take care of your equipment. Do you have adequate insurance to cover damage to/loss of equipment while at customer premises? If you are in Australia or New Zealand, you may wish to consider PPSR (Personal Properties Security Register) that protects you and your equipment from being possessed by liquidators should your customer’s business go belly up.
Step 5: Right Tools For Your Business
As a rental business, you need proper tools to ensure that you stay on top of your business. Today you need tools that will allow you to run your business from anywhere and be in touch with your staff and customers instantly. Cloud based tools provide lot of flexibility and ease of use using any device. We list below applications that will help turbo-charge your business and take it to the next level.
CRM (Customer Relationship Management)
If you are a very small rental business, there are tools such as Zoho CRM or Capsule or Insightly that will help manage your prospects, customers and any communications with them.
Cloud based accounting systems such as Xero and QuickBooks Online (QBO) have comprehensive functionality to manage all the obligations of a small and medium rental business.
If you have 5 or more staff in your business and some of them are out and about most of the day then a tool such as Slack will help further streamlining communications with your team members.
Inventory Control and Rental Management
Viberent is the best solution for small businesses to track and manage their equipment. With our cloud based rental management system and mobile apps you can keep tabs on all of your company’s assets, from behind your desk or on the go.
In conclusion, running an equipment rental business need not be complicated. All you need is the willingness to go that extra mile for your customers and investing in business tools and process so that you and your staff rely on systems rather than you as the business owner.