“Rentrax rental management software can significantly reduce the amount of effort required into running a rental equipment business. Thus, if you are planning to start one, you are at the right place. Here are the top rental business ideas to consider where our software can add great value to your business.”
As the cost of ownership (Whether it’s an apartment or a boat) is going higher, people are more interested in renting them. So in recent years, there has been a rise in opening new rental businesses. People who are seeking this niche are generally categorized into two groups.
- First, those already associated with some kind of rental equipment business. Nonetheless, they want to expand and venture into offering other types of rental equipment and fully unleash the magnitude of possibilities.
- However, the second group is just starting to get self-employed or the one who already has been in the retail business but wants to switch to rentals.
The common thing between these two is that they aren’t sure about which equipment, product, or service to choose for their new venture. Based on our experience in dealing with several clients and businesses that offer various products and services in the rental niche, we present to you the top 5 rental equipment business ideas.
But before we begin discussing the best businesses to start from our list, why not have a general discussion about this market? So, let us first quickly review a few important things on how to select the right type and start up a business in the equipment rental industry.
What is the rental equipment business?
The rental equipment business is simply a business where the sole purpose is to make a profit by renting out different products or services. Instead of selling a product or service at a one-time profit, businesses earn rental proceeds.
These rental proceeds include a portion of their cost of investment and some amount of profit as well. The recovery of the total cost and the expected profit expands over the useful life of the product or service.
Why start a rental equipment business?
Starting a rental equipment business is perhaps one of the best business ideas to pursue in modern times.
It has become sort of a charm in recent years. This is because people today aren’t interested in making long-term commitments and huge investments toward owning an asset.
They instead prefer to borrow a product or service on rent for a specific and limited time. This doesn’t only require arranging a small amount of financing on their part but also frees them from other obligations like maintenance, licensing, etc.
How to start a rental equipment business?
Let’s discuss how to start and successfully build a rental equipment business.
The following guide will explain in detail all the essential parameters you must adhere to if you plan to venture into this avenue.
Conduct a thorough survey
Conducting a thorough survey means collecting all the basic information you need to start a rental equipment business. There are many potential factors to consider in this preliminary stage of your business.
Budget and financing
Simply start with knowing how much you are willing to invest in your business initially and what will be the sources of financing.
If you are an experienced businessman, taking external financing or debt might be okay.
But if it’s your first time, managing and utilizing borrowed funds can be the worst disaster you could ever imagine. So invite only shareholders instead of any debenture holders.
Estimating your realistic budget will filter out any impossible rental equipment business ideas in your case.
Another factor that helps you to calculate the budget is estimating the possible income. You need to know how many rental items you will need and how much the rate is to rent each item.
Avoid venturing into seasonal businesses.
Unless you have other important things on your plate, try to avoid venturing into season-based rental equipment businesses.
Seasonal ventures tend to be very uncertain as to many things but would incur multiple fixed costs throughout the year, such as holding costs, maintenance, warehouse rents, licensing fees, etc.
Location
Rental equipment businesses do not thrive everywhere. Some tend to be only good at places where there is a demand for that sort of equipment. For example, a jet ski rental business will need to be done somewhere around a public beach and not downtown.
So look for the best location. Location will also tell you about the prevailing competition in that area.
Selecting the right kind of equipment
All equipment comes in various classes, and qualities, and with different specifications, so find out about the preferences of the clients in your location. Remember that people fond of using high-end equipment won’t go for low-end and vice-versa.
Estimate the rate of return
This is another critical factor to evaluate before making an investment decision. Find out the expected rate of return on investment in your rental equipment niche at your desired location.
How many people are willing to pay, and how long will it take for you to break even and then make a real profit on the time and money you are planning to invest?
Selling add-ons
Another way to increase your profitability is to see if your rental equipment can be coupled with some add-on products or services that sell upfront without the need to rent out.
Avoid piling up unnecessary equipment.
As a new business with an existing market, do not invest heavily in procuring equipment that stays idle. Remember that many equipment types require regular maintenance and check-up even when not in use. Besides, equipment depreciation is also an ongoing expense that incurs irrespective of its use.
Therefore, invest wisely and let the demand be more than your available supply.
Schedule regular maintenance of your rental equipment
How a client treats your equipment is highly unpredictable and is an inherent risk of the rental equipment business.
Rental amounts as well as any upfront returnable deposits received at the time of booking account for only a portion of the cost of the equipment. Therefore, the longer you can extend the useful life of your equipment, the more profitable it will be.
And this is only possible when you schedule regular checkups and maintenance of your equipment.
Run your equipment rental business in an effortless manner
Building and running an equipment rental business is easier than you think. By deploying a reliable rental equipment management system such as Rentrax, you do not need to worry about anything at all.
From assisting you in building your website to accepting orders, promptly processing client payments, and helping you manage all the back-office stuff, our software has got you covered in more than one way.
Promoting your rental equipment business
Marketing and brand promotion play an important role in increasing your sales volume.
For this, you can either advertise your business near your location on billboards or use social media platforms. You can also partner with other established brands and businesses by participating in affiliate programs, offering special deals and discounts to their customers, etc.
Top 5 rental equipment business ideas
Now that you understand very well how to begin a rental equipment business, it is time to make a list of all the possible equipment types that you can venture into.
For your ease, we have picked the top 5 rental equipment business ideas and listed them below.
1. Car rental business
2. Party equipment rental business
3. Sports equipment rental business
4. Scooter, bike, and buggy rental business
5. Photo booth rental business
Car rental business
The car rental business requires a considerable amount of investment, licensing fees, operating costs, paperwork, etc. But this cannot hold potential investors from entering this market. This is because of three major reasons.
First, the car rental business remains in demand throughout the year and provides a high rate of return on your investment.
Second, the car rental business is quite diversified. You can either offer specialized nature vehicles for road trips, weddings, pick and drop service for guests at corporate events, simple cab service, etc.
And third, car rental fees vary according to the length of the service. From a single trip to charging per distance traveled, to booking for a few hours or even days, to any long-term contracts, and all this with or without a chauffeur means that your rental proceeds are continuously flowing in.
Hence, the possibilities in this business are numerous.
Another great thing is that cars are rented out by everyone. Aside from people who do not own cars, your clients will also include people who own a car but for some reason do not find its use feasible.
A good location for a car rental business would be to lease a spot at an airport or some tourist location.
Party equipment rental business
The party rental equipment business idea is good for people who have low investment or want to have a small business as a side hustle.
People love to celebrate special occasions and events throughout the year. For example, weddings, anniversaries, birthdays, graduation parties, farewells, etc.
But a lot of the equipment involved in setting up these single or even few-day events is pretty expensive and spending into buying this stuff isn’t feasible for most of the end-users.
Hence, renting out party equipment is another opportunity for you to capitalize on.
Probable segments of investment in this business involve –
- Buying long-term serving equipment such as party furniture, tables, chairs, crockery sets, game tables, etc.;
- Spending on event-specific items such as food, drinks, balloons, cards, gifts, theme-based decoration stuff, transportation costs, etc.; and
- hiring event planners or managers and other staff as helpers.
Sports equipment rental business
Sports equipment rental business idea is another area with a lot of revenue potential, but which does not require any huge amounts to invest. Especially in countries like the United States and Canada, it is becoming a booming industry.
An important thing to consider here is that a few sports are seasonal and very location-specific. Such equipment is also generally quite expensive to own. Due to this drawback, most people would prefer using rented equipment rather than purchasing their own.
While such ventures may offer a high return on your investment, before investing in such businesses, consider other cost factors as well.
Examples of sports equipment rental business ideas are –
- Jet ski equipment rental;
- Fishing equipment rental;
- Climbing and hiking gear equipment rental; and
- Scuba diving and deep-sea diving equipment rental.
Scooter, bike, and buggy rental business
Scooter rental is another form of a thriving rental business idea.
If you live in a busy city where roads are mostly packed with traffic, offering scooter rental can be an excellent business opportunity for you. This is because scooters are mostly easy to drive through traffic jams and do not require much parking space.
Moreover, you can also specify starting and ending points to your customers so that they do not need to worry about parking as well. They simply begin their journey from one of your locations and end at another location of yours.
Besides busy cities, the scooter rental business is also great for students at colleges and universities having huge campuses spread over many acres of land. Such students can rent scooters for traveling between departments and hostels.
The bike and buggy rental business is similar to scooter and car rental except that it is much more specialized.
Bikes and buggies are rented for having fun-based adventure rides over steep, muddy, and rough trails, rather than being used for daily commuting. This again means that this business is very location-specific.
Photo booth rental business
While it may not be a new idea, it surely has become much more advanced in terms of the technology and features that it offers today.
Photo booths are a common sight at parks, tourist spots, brand launches, award functions and ceremonies, corporate events, etc. People love to capture memorable moments and achievements in their life.
One of the advanced features of modern-day photo booths is a green screen. It gives the option to change and add virtual backgrounds that could feature anything you want.
Conclusion
A good thing about choosing our Rentrax rental equipment management software for your rental equipment business is that you do not need to look after every aspect of your business every time.
And remember that the above top 5 rental business equipment ideas are just the beginning. In the next article, we will explore medical equipment and furniture rental to see if that can be an option for people looking for new ideas. By choosing Rentrax as your rental business management partner, you have assigned yourself countless opportunities.