Rentals are an increasingly popular way to control equipment acquisition and maintenance costs and reduce asset management hassles. In fact, equipment rentals are forecast to increase roughly seven to eight percent for each of the coming three years, topping out at $51.3 billion.
It’s big business – and it’s a profit-maker you should be taking advantage of. Whether you’re just getting started with equipment rentals or you’ve been in the business for a while, here are five tips to help you maximize profits from this booming market.
- Get the right equipment for your market. What customers look for when they buy isn’t always the same as what they look for when they rent. It’s too easy to overspend on equipment with advanced features and functionality (and correspondingly higher rental rates) that customers don’t really care for (and won’t pay for). Before you settle on a rental lineup, take some time to develop use cases around customers you already have, as well as customers you hope to attract. What features do they need? What about space, portability and supplies preferences? Would used equipment fit the bill?
- Understand the maintenance costs you’ll face. If equipment doesn’t work, you can’t rent it. If it doesn’t work well, your reputation suffers. Even if it works perfectly, but looks too beat up, customers won’t take you as seriously. Make sure your equipment works as advertised and looks the part by creating a comprehensive preventative and cosmetic maintenance plan – and making sure you’ve got the staff to get it done.
- Be sure your accounting, inventory, CRM and other systems are rental friendly. Also be sure they play together well with regard to rentals. You may want to run some tests to be sure before you go live.
- Make rentals easy on customers. One of the reasons customers turn to rentals is simplicity. It’s best not to erase that benefit with complex paperwork and hard-to-grasp terms. Spell out responsibilities clearly and concisely for both sides of the transaction, in language that doesn’t require a law degree to understand. That said, you may want to have a lawyer review your documentation just to be sure you haven’t missed anything.
- Grow your fleet affordably with programs like LEAF’s Partners in Profit, which lets you retain ownership of the equipment your customers rent. Normally, when customers return financed equipment at the end of the term for an upgrade, you return it to the financing company. But with a flexible arrangement like Partners in Profit, you can keep and add the equipment to your rental fleet, where it can continue to generate revenue for years to come.
Equipment rentals can be a profitable addition to your business and the market’s growing quickly. With a little planning and the right strategy, equipment rentals can not only become a major revenue source, they can also help drive traffic and help you develop relationships that support growth in all areas of your business.