Equipment rental is on the rise. This could be your opportunity to make a fortune if you learn how to start a heavy equipment rental business properly.
The majority of rental income in the United States comes from renting tools and equipment, which accounts for approximately $2 billion in annual revenue—in case you still had doubts about how profitable this business can be.
However, it is true that as long as a business or niche is growing and popular, people will always try to open it as well. This is without considering the number of businesses that are already operating and will be your direct competitors with an advantage you don’t have: time and a reputation they have worked hard to build.
This isn’t in order to discourage you. Instead, we want you to understand that this business is profitable as long as you’re willing to give it a try and follow the required steps and procedures to get started.
Otherwise, you are usually bound to fail or, at least, spend more money and time on aspects that are not required or don’t truly need your attention the most.
Therefore, keep reading and taking notes on how you can work in this industry to start your own business.
Let’s Get Down to the Pre-Requisites
Although there’s no such thing as a list of things you need before starting your business, it is important to make it yourself, so you don’t miss essential items and aspects.
- First, you may have enough space in your property or, usually, additional land to have your equipment.
- You will need a vehicle that can handle the delivery and transport of heavy equipment.
- You must be available to deliver rental units to customers wherever they are located and to collect the rentals at the end.
- You should decide what type of equipment you are most passionate about renting. We plan to add many more products, including electronics, kitchen, cameras, and musical instruments.
- You may be able to borrow up to $3K or $5K cash to purchase the first inventory, and overall, you just need capital to get started.
Talk To Your Potential Customers
Although talking to customers won’t help greatly when it comes to getting things done in your place or items, it will help you have a clear idea of the market, so you know this business idea is worth your time.
There is likely a growing market for equipment rentals in your local area. You need to understand what your customers want before you can fill this market. This will help you decide what equipment your customers are looking for, how much they’ll pay, and how much business you can expect.
Reach out to local builders, home renovators, and construction companies. Ask them about the equipment they use, the brands they like, their budgets, and what type of projects they tackle. These are the questions you want to ask each company:
- What equipment would you like to rent?
- Which brands of equipment are you most confident with?
- What are your budget constraints?
- What additional services would you like a rental company to offer?
This will allow you to envision how your equipment rental business should look in order to be successful in your local area and your profit margins.
Get The Best Inventory Available
It’s about quality and not quantity in the beginning and as long as you own a business.
Rent equipment that your potential customers will want, not what you think they might need. Based on the information you have gathered from these businesses, make sure to purchase as little inventory as possible.
It’s not worth spending money on equipment that nobody will ever rent or that is too expensive, and not many will request it when renting. Also, it’s easier to determine what other equipment you should buy over time than to compensate for equipment that is no longer useful.
When purchasing each piece of equipment, make sure you get the best deal possible. Don’t spend your money on high-end brands if the local businesses you spoke to weren’t interested in them.
You might also consider buying used equipment. This can help you save a lot of money.
The average amount of money you will spend on equipment alone if you decide to buy each of them will go over $50k easily, even if you reduce the number by assessing your needs and clients.
However, buying used equipment can reduce this by half, as long as you find good options in the market.
Understand the Scope of Being Successful
The equipment you and your clients need will determine the success of your business.
As with all other business ventures, success in a rental company for construction equipment will be dependent on demand.
Particularly, the demand in your area will determine how successful your rental venture is, and this will always play a crucial role as you expand to other cities or keep working in the same one over the years.
You can make sure you get clients by setting up your business in an area that has many construction projects large enough to justify the use of heavy construction equipment.
Clients prefer to source heavy equipment from the same contractor they trust.
Talk to locals about your area and get more information. Check to see if there are any developments in the area. This can give you a better understanding of the area you are interested in.
Based on the information above, we can go back to what we were mentioning: quality is always more important than quantity.
You can determine the amount and quality of the equipment you need to rent out. You should buy smarter than you spend more.
An inactive inventory takes up a lot of space and costs money.
You Can Set Your Budget
Although purchasing inventory is the largest upfront expense for a business in this industry, it’s important to consider other expenses such as equipment storage or salaries for staff.
Insurance is also something you should budget for.
Equipment you don’t own will be used by people other than your employees. This could lead to some unpleasant liabilities. You will need to have a few basic insurance policies in place, and even if you don’t work with external sources, you need to protect your company, staff, and yourself.
Therefore, take notes of these policies you should hire:
- You and your staff are covered if equipment causes injury or property damage. A general liability policy costs between $400-$600 per year for small businesses.
- Property insurance that covers your business space, contents, and rental items. The average annual cost of commercial property insurance is $750
- To cover property damage and bodily injury expenses for you or your employees driving on the job, you can purchase a commercial vehicle. The rates for this policy will depend on you and your employees’ driving records. Commercial vehicle insurance typically costs between $1.200 to $2.600 for cars and between $800 to $2.000 for trucks.
- Workers’ Compensation to protect your employees in case of injury on the job. However, not all states require it. These policies have different rates depending on the state.
Talk to an agent about what additional coverages your company might require or how you can get them at lower prices or rates without sacrificing benefits.
Once you have an idea of your expenses, you can start to put together a plan to turn a profit. This will allow you to set prices for equipment rentals and help you follow through with your plan.
Remember that this budget will involve, so far, equipment and insurance, but also save some money for any unexpected expenses.
For Customers to Sign, Prepare Waivers
Equipment rental companies often require their customers to sign several agreements in order to rent equipment, so you want to prepare all these:t
- Indemnification Agreement guarantees that the customer will assume financial responsibility in case your company is issued.
- Hold-harmless Agreement in which the customer agrees that your company will be held harmless for any injuries or property damage caused by your equipment.
- The conversion warning clarifies that your company may consider the rental equipment stolen and can press charges.
These waivers should be prepared before you do any business in order to protect your company from unwelcome liabilities.
Get Used to The Internet
All industries have benefited from the Internet’s ability to connect people and make their products or services visible. Website design has become easier and more cost-effective compared to other strategies, and the reason why this is part of the steps to follow is simple: having a website turned out to be a crucial goal.
Your potential clients will be more likely to make a lasting impression on your website.
Consumers are increasingly relying on the Internet to find the right business for their goods and services. A website that provides information about the quality of your services will be a great way to attract them.
Your web page should be professional-looking, easy to navigate, compatible with both desktop and mobile devices, and easy to find. Your business should be easy to find among the sea of heavy equipment suppliers, and for it, you will need to get used to how the Internet works.
Based on this, the step to follow is to get your domain registered under your company’s name and make sure the branding is consistent with your business.
Write A Business Plan
We know you’re going to say, “I think you missed this step earlier,” but we are very confident about where we are placing it.
For us, there’s no point in starting a business plan if you don’t know the basics about, in this case, equipment, your prospects, expenses, and the basics about this path you’ll take.
When you sit for a while and start working around everything you need, that’s the moment we believe a business plan comes in handy as you will have more organization of your thoughts and understand what you actually need.
You can’t just jump in headfirst with a new business, and if you have thought about it already, it is time to organize every detail in your plan.
The plan should be detailed and complete as there will be a significant investment. It also needs to be simple to understand in five minutes. This will give you an idea of how to proceed, and your potential investors will give it the “OK” to proceed.
It is important to think about where you are going to be based when creating your business plan.
For example, if you are going to have a commercial property for your company, you will need to determine where it will be located and base part of your business plan there.
Let’s Get Started with Your Branding
You need to make sure your company is consistent when being in front of its clients, which is why we will be moving on to the next step most people enjoy: building the entire identity.
For it, you will need to name your business, work on your brand assets, and determine how you want your image to be.
In terms of choosing your name, it can be hard to decide what’s the best name since it isn’t advisable to change it quite often as people will get used to it, and this is how they’re supposed to find you.
So, you want to consider that it must have the name of your niche if you are a local business or if you want to make your marketing strategies—later on—be easier to work with.
Then, make sure it is memorable and easy to remember. Be creative, but not as much as you would with your users in a videogame or social media sign-up.
Your name will also be used for your domain and website, so you don’t want it to be too long.
After you’ve registered your domain and name, it’s time for you to start creating your branding assets. You will need a logo and social media accounts to create your marketing materials.
The process of branding a rental company involves getting to know your brand and its target audience, as well as the story you want and how you can add value, which involves some of the steps we’ve mentioned so far.
Create Your Own Business Account & Legal Entity
You want your company to be separated from your personal finances as this can bring issues to yourself as an individual if you ever get sued or deal with problems with your staff, clients, or other factors.
For it, you need to establish your legal entity as an LLC or other option besides sole proprietorship. Also, open your own business account with your favorite and most reliable bank to separate finances and profits.
All legal entities’ options have benefits, so we recommend going over them with your accountant, lawyer, or legal worker who can provide information.
Although we have our recommendations based on the LLC structure, it all depends on how much you want to expand your company in the future and how you want to start.
This is why we also advise our readers to go to a professional and even two that can provide you with the details for this step.
Marketing Your Rental Business
With your business plan, a legal structure, budget, ideas, and the basics and all we have mentioned so far for your business, you should be ready to start thinking about marketing.
As we mentioned, you need to start with your website and get used to the Internet to ensure you’re working around the best strategies for getting leads, as everyone is using digital methods to find services.
Social proof is a quick way to build your reputation by getting reviews from customers. You can also market your rental business with low investment by using several low-cost methods.
You should also learn how Instagram can be used as a rental company. You can use Google Ads to boost your website’s visibility in search results, but work on learning about SEO as this is the most crucial aspect that will boost your business.
Traditional options like direct mail, calling people, flyers, radio ads, and everything you can think about still working as long as your business is local and you know your audience.
Top Tips to Guarantee Your Heavy Equipment Rental Business Success
We all know the path of becoming an entrepreneur is not only hard but exhausting. You need to deal with finances, manage your time, work with other people, and the list just grows with the years.
This is why we want you to remember these tips so your business ends up being a success and you don’t drown yourself in this process:
Don’t buy more; buy smarter
Knowing your customers and what they want will help you make better decisions about the equipment you purchase.
We mentioned this earlier, and we still find it necessary to repeat as many tend to skip this path thinking that “Everyone needs this” whenever they are purchasing the equipment.
Don’t keep idle inventory. It only takes up space, and you can’t use it to grow your business right away.
Do not overspend on equipment when you start. Instead, purchase the minimum amount of inventory that is feasible based on market research. You can buy more popular and profitable equipment once you have started.
Get the best equipment deal
Unless you are starting a rental company because you won the lottery, you will want to get the most out of every penny that you spend.
Besides the clear expense of equipment, make sure your expenses are all set.
How much will you pay your staff? How much can you afford? Will your business survive alone for a few months without many clients? How much are you paying in loans or other financing options you requested to start the business?
All this needs to be clear in your budget but also in your mind, as you may miss many of them while creating your plan.
Ensure you know how much you can afford for each small or large expense and if your business can survive for a while.
Take care of your equipment
Your business depends on your equipment – no equipment, no rentals!
It is important to take care of it as a result if you don’t want to spend more money on new ones instead of providing maintenance as needed.
Thus, focus on:
- Regular maintenance – spot & fix potential problems before your customers do!
- Quick and thorough repairs. Fix any problems quickly, so they don’t become more of a problem in the future.
- Cosmetic repairs Your equipment should work like new and look great! You must make a positive impression on potential customers.
Treat your customers right
They are the heart of your business and what will bring success to it.
Renting equipment is repeat business. Customers only rent it for a set period of time. If they need it again, they will have to rent it, and usually, they go back to the same person or company they relied on previously.
However, your equipment’s quality is not all that matters for them to come back; you need to provide great customer service in every aspect and be there for them.
Answer any questions, provide information and instructions about the equipment, keep in touch with them during the renting period, provide any advice, and whatever comes to mind as long as it is valuable and resourceful for them.
Build your relationships and treat them amazing.
The Local Lead Generation Process for Your Heavy Equipment Rental Business
All right! So, everything is about building properties and generating leads. But how does the process actually take place? Are there other steps I need to know?
The steps I mention below are what students from our local lead generation program follow to generate leads for businesses like yourself. So I’ll help you see what we do. And how if you join our program, you can simply generate leads for your own business (unless you want to start a side hustle and build a laptop lifestyle business).
Essentially, our lead generation can be divided into four steps:
The first is prospecting. You need to take the time to do market research on a niche (industry) and determine how many phone-driven businesses are there.
Keep in mind that this is local research as you need to know how many companies need leads. For example, you may search for “plumbing services Youngstown OH.”
You will find dozens or even hundreds of businesses trying to get themselves in front of the customers by ranking on Map Listings, organic results, and even Ad.
The second step, building. When you find a niche (plumbing, tree services, a software company, real estate…), you will need to start building your digital properties. You don’t need to be an expert in HTML or coding. It can be easy with the right tools.
The third step is now taking time to rank your lead gen website. With the site done, you need to work on SEO strategies and start dominating those Google search results. If you’re new to SEO, it stands for Search Engine Optimization.
To keep it simple, it consists of the entire process of growing a company’s visibility on search engines like Google and generating organic traffic. And remember this, local lead generation is part of the strategies.
Moving on to step four, once you rank the site, you will start getting your ROI and profits. You only need to rent it out to a local business interested in the leads the site generates. You can offer a couple of free leads to their move on with the actual pay per lead.
To review steps 1-4 above, I described it to a normal student who is building a lead gen business to help local service providers generate more calls. But replace the student with you as the business owner. And replace sending the leads to a business to simply siphoning the leads to your personal business.
By the way, fun fact, about 20% of our students in our local lead gen program are actually business owners who went through the program. And they use the skillsets we teach to generate leads for their own business.
An Example of Lead Generation: Home Advisor
You must be thinking, “if lead generation sounds so good so far, how come I haven’t seen any company?” That’s the thing; there are many out there. You just don’t know they are dedicated to it.
HomeAdvisor is one of the best examples you can find on the Internet as it is a top lead generation company that has spent millions building its brand but also earned even more zeros for this same reason.
They started small as everyone else but invested in building their brand awareness to make people who are looking for home services go to their website and find what they need. They are over 75% of people’s first choice when they need those services.
If you don’t get HomeAdvisor that much or need a refresh, users need to submit their information to request a service and get a professional or expert who can provide it.
HomeAdvisor’s job is to share your information, which makes you a lead, with local companies so they can contact you and offer the service you’re requesting. For sharing this lead information, HomeAdvisor gets paid by the companies. This happens for every single lead they send to multiple businesses.
Business owners who don’t have marketing skills or don’t even know how to have any online presence will always rely on those pages to list their services. They will save time and effort, but companies like HomeAdvisor can make them spend lots of money as leads aren’t exclusive (one lead is sent to multiple companies after all).
Using Facebook Ads aka Paid Ad Platforms: Do They Generate Leads?
They DO generate leads. If not, no one would use them.
However, you need to remember two facts:
- Paid ads or platforms can be expensive.
- They don’t generate “natural” leads.
Whenever someone sees or clicks in one of those ads, over 80% of them did it by accident or are trying to close/report it.
Why? Because they aren’t looking for those services. At least not at the moment.
What those ads do instead is interrupt their time on the platforms. Users aren’t there to find companies or businesses unless they are searching for a specific company’s user, and for that, there’s a search bar. This is why it is hard to convert them to actual customers who will show interest in the companies’ services. Also, you’re limited by a budget.
When using lead generation, everything is organic. You aren’t forcing others to pay attention to your business but rather being there when they need you. This is why Google’s organic traffic will always beat paid ads, and the reason companies continue investing in it, which is a lot cheaper as well.
What Is Local SEO?
Don’t worry… I didn’t get it at first either. Following the short explanation, local SEO focuses on scaling businesses’ visibility on search engines. However, this is only for those who serve their communities face-to-face.
What does this mean?
Experts and professionals like painters, plumbers, and dentists (but not only them) offer their services to their local customers. Why? Because they can’t deliver them unless they are located in the same area of their customers.
To make sure those businesses get more leads, you need to rank them locally by claiming the business listing on Google to place them on Map Listings. Local SEO also involves online reviews, citation management, and how you manage your entire online presence in the local area.
If you are going to bet on lead gen, you need to adapt yourself to today’s world: The Internet.
Keep in mind that although traditional channels and methods like billboards, warm calls, and pamphlets still work, they aren’t part of your tools. Whenever someone needs a service, they go to Google and search for it.
“Dentist in Miami” or “plumbing services in Orlando,” etc. And you can keep coming up with services or professionals people need and look for. Thus, you need to make sure you’re using Google to get the companies in front of their clients.
Users will always click on the first search results (those near the top), and many of them will be either Ad links (people paid to place their websites there), Map Listing, and then you get websites. Almost all of them are your goal and where you should always aim to place yourself.
Can My Heavy Equipment Rental Business Utilize a Local Lead Generation Strategy?
If you want customers, you better know you need it. Following the previous explanation, lead gen is all about placing businesses in front of their customers, choosing them over their competitors.
Put it simply – it’s all about closing deals and having clients for those companies to make money. The main difference with the usual methods companies use for this is how lead generation approaches different channels to get them in the right place of the market to get customers.
Those channels are all focused on the Internet as most people are searching for products but also services across the net. The issue is that the Internet is way too broad, and businesses don’t know how to place themselves. They usually try, but they get one common result: losing money and time.
How Powerful Are Organic Heavy Equipment Rental Leads from Google?
For companies looking for customers, it’s everything. For you? Pretty much the same. When you build a business with digital properties, you get to make thousands of dollars a month.
This isn’t a “get started today and get rich tomorrow” thing, but it is HIGHLY scalable, and ROI + positive results are guaranteed. Learning a fairly decent and very needed set of skills to create your digital properties and start ranking them on Google is required.
I have invested in several online businesses over the years, and if there’s something uncertain, whether you will get your ROI or not, even more than the actual profit.
However, this business moved my earnings from five figures a year to a month in ONLY passive income while sitting comfortably at home.
On my laptop. Anywhere. Anytime.
You can look at one of the first sites I built back in 2016, and it continues making me over $1.000+ every month. The best part is that I don’t need to touch it or the rest I’ve built over the years, just like this digital property.
What Makes Lead Generation SO Alluring?
Here it goes: you can work from home.
The main issue with regular business opportunities is how much you need to invest in staff, equipment, or rent to have a place to sell your products or offer your services.
We all know the hassles of traditional businesses that involve regular expenses, which are extremely high. Can you afford it? I don’t think so, and even if you can, is it worth it? Now, it isn’t only about the money. You also need to put in a lot of work, and it isn’t only during the first couple of months or years. Usually, it is as long as you continue running it.
You can save yourself those headaches and bone-breaking tasks and expenses with lead gen since it is more about generating leads with digital channels—mainly websites.
Websites can be VERY cheap to build, and with many tools online, you get to do it in a couple of hours instead of days. Any virtual or digital business is scalable and won’t need constant maintenance.
So, let’s summarize this:
- You save money in regular expenses with traditional and most online businesses as what you need is yourself and digital properties (websites).
- You can bet on passive income.
- There’s no need to hire more people to get started.
- You can generate leads in multiple industries, which allows you to work on any niche you want.
How Can I Get Started in the Local Lead Generation Program?
Anyone can start and learn. That’s the beauty of this business model. I knew nothing about SEO, Map Listing, and everything I’ve mentioned so far. It is all about learning the skills, gaining experience, and deciding to take the step.
Remember that this business model will never get old as business owners are always looking for leads. They need to do business and scale their companies. Why not do the same while helping others and still making money?
You can start with this local lead generation course highly recommended for anyone wanting to grow in the business. It is a close training that will take you through each step and make sure you are able to get your ROI, profits and take control of your life.
You will be added to an incredible lead generation family ready to help you 24/7 when asking questions on the group. Anyone is welcome who’s willing to put in the work. Click here to watch the lead gen webinar.