How to Write a Equipment Rental Business Plan: Complete Guide

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  • January 30, 2023

equipment rental business plan

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Whether you’re looking to raise funding from private investors or to get a loan from a bank (like a SBA loan) for your equipment rental business, you will need to prepare a solid business plan.

In this article we go through, step-by-step, all the different sections you need in your business plan for an equipment rental company. Use this template to create a complete, clear and solid business plan that get you funded.

1. Executive Summary

The executive summary of a business plan gives a sneak peek of the information about your business plan to lenders and/or investors.

Though the executive summary is the first and the most important section, it should normally be the last section you write because it will have the summary of different sections included in the entire plan.

Why do you need a business plan?

The purpose of a business plan is to secure funding through one of the following channels:

  • Obtain bank financing or secure a loan from other lenders (such as a SBA loan )
  • Obtain private investments from investment funds, angel investors, etc.
  • Obtain a public or a private grant

How to write an executive summary for an equipment rental business?

The business plan of your equipment rental company must start with a high-level overview of every section: the executive summary.

The overview must be small, attention-grabbing, and focus on the concept, problems, solutions, target audience, financial targets, etc. Ideally, the executive summary must not exceed 1-2 pages.

The executive summary usually consists of 5 major sections:

  • Business overview : provide here details on your business e.g. what type of equipment or vehicles will you rent and to whom, where your store is located, your strengths, weaknesses, opportunities and threats (SWOT), etc.
  • Market analysis : provide a brief of your market understanding and provide a summary of the equipment rental industry trends, who are your competitors and your target audience, etc.
  • People : provide a summary of the key people involved. Provide a brief of their experience in the equipment rental industry. Also include here a chart of the different teams and their reporting lines.
  • Financial plan : how much profit and revenue do you expect in the next 5 years? When will you reach the break-even point and start making profits? Make sure to include here a simple chart with your financial projections (revenue, gross profit, net profit , cash flow)
  • Funding ask : what loan/investment/grant are you seeking? How much do you need? How long will this last? How do you intend to spend the money?

equipment rental business plan

Equipment Rental Financial Model

Download an expert-built 5-year Excel financial model for your business plan

2. Equipment Rental Business Overview

This section should include the company description, and the following details should be covered for an equipment rental company:

  • The equipment/vehicles you will rent to your customers
  • The industry / target audience you are focusing on
  • The prices for the different vehicles
  • The legal structure of your company

Here are the important subsections of the business overview that you must include:

History of the project & mission

Start with a brief description of why you want to start the equipment rental company. The prime focus here should be:

  • Why do you decided to create this business today
  • Your business’ mission

For example, explain that there are certain customer needs that your competitors are not able to fulfil today, and your business would offer such solutions. This might been what gave you the idea to start your own equipment rental business.

You also need to write a mission and vision statement. A company’s business goals and strategy are all outlined in the mission statement.

Here, you can maybe explain that your rental business’s mission statement and vision is to deliver high-quality construction equipment and vehicles for business customers that cannot afford such expensive machinery, and only need them periodically.

a) Business model

You should research the different business models available to you before launching a new venture. Try to respond to these questions: 

  • Would you operate an established franchise rather than starting your own equipment rental business? 
  • Will you focus on renting equipment to businesses, or will you instead serve individuals? 
  • Do you plan to rent out equipment on a temporary or permanent basis? 
  • Will you work with numerous brands or just one to rent their machinery, vehicles, or equipment?

b) Products

Your equipment rental company would offer equipment/vehicles for rent. Explain clearly what type of equipment and vehicles you would offer.

The investors or lenders reading your business plan should get here a clear idea about the equipments, tools or vehicles you offer. For construction equipment and vehicles, this could be for example: bulldozers, forklifts, excavators, etc.

equipment rental business plan

c) Pricing strategy

You should include a price list in this section. You don’t have to go into a lot of details here, use price ranges instead. For instance, the rent for an excavator for the day could range from $400 to $600. 

In addition to the daily rate, make sure to include monthly (or longer term rental rates) too.

A pricing table for each equipment/vehicles you plan to rent will make it easier for lenders or investors to connect your pricing strategy to your financial forecasts.

d) Target audience

Knowing your audience is crucial since it gives you a great competitive advantage.

For example, if you’re starting an equipment rental company for the construction sector, you may choose to focus only on individuals for their small house renovation projects or large construction companies instead.

e) Equipment rental SWOT Analysis

You also need to perform a SWOT analysis for your business. It would give a clear idea about the profitability of your business to the investors. This shall include:

  • Strength: include here details such as favorable market conditions, large construction sites in the area, etc. 
  • Weakness should include the factors that can hamper the growth of your company, such as your store location (far from busy roads) or your lack or brand recognition as a new small business
  • Opportunities should focus on the areas that are not yet exploited by the competitors. It can focus on a specific segment of customers, such as contractors, or simply small tools rental for individuals
  • Threats: should include the biggest threats your equipment rental company can face. It can be anything from macro risks (decrease in construction during a recession) to micro risks (aggressive pricing strategy from competitors)

equipment rental business plan

3. Equipment Rental Market Analysis

The second most crucial component of your equipment rental business plan is market analysis. You must show potential investors that you have the right market knowledge. Investors must have faith in the business acumen of the business you intend to start.

Here are some of the important points to address in this section:

a) Market Trends

This section should focus on the market size and the growth opportunities for your equipment rental business. Does the market have less competition? Is the construction growing in the city? Are there sufficient equipment rental companies in the locality to meet the demands?

Collect market data for your area

It is good to get a clear insight into the local data so that you can be sure of your business’s success.

Do some research and include data such as the number of competitors in the locality, their growth, factors leading to growth, etc. Instead, if the market has contracted, you should also include the reasons behind this drop to make sure this isn’t something that will affect your business in the future. 

equipment rental business plan

b) Equipment Rental Competitors

Before you launch your equipment rental company, be sure to research the number of nearby competitors operating in a similar market and the health of their operations. 

Here are a few questions you should address in your competitor analysis:

  • The number of businesses leasing or selling the same equipment you do
  • The kind of equipment these businesses offer
  • Their rental rates (daily, weekly, and monthly) 
  • If they provide any additional services 
  • Business hours (the later you open, the more accommodating you are for contractors)
  • The sectors they focus on
  • Any affiliations they may have with other resellers or suppliers of equipment

Why do you need a competitive analysis in your business plan?

You need to bring out the reasons why you are opening an equipment rental company. For example, no competitors cater to the specific segment, such as roofers, or there is a lack of a wider selection of equipment that you plan to offer.

Consider how you may provide your clients with superior products or services at a lower cost.

Would you have a wider or better selection of equipment? Would you target a certain clientele, such as roofers, builders, or contractors? Will you give your consumers additional time to return equipment?

equipment rental business plan

c) Customers

First, check sure there are people in your neighborhood who need the equipment you plan to rent out as a business. However, you may also rent trailers, portable restrooms, sizable tents for gatherings, and other items. The type of equipment is typically associated with construction (vehicles, heavy machinery, and other light tools). 

To decide what kind of equipment you must provide, you must conduct thorough research on the precise requirements of your potential customers. Additionally, it would assist you in figuring out how much cash your equipment can produce and what rentals you can charge for it. 

Your competitor analysis will provide a large portion of this data. Additionally, the information must back up your decision to open an equipment leasing business.

4. Sales & Marketing Strategy

The Sales & Marketing strategy section of your equipment rental business plan should outline precisely how you intend to acquire and retain customers. This can be divided into 2 sections:

  • What marketing channels will you use? Common marketing channels for equipment rental businesses can be billboards, email marketing, etc.
  • What are your Unique Selling Points ? In other words, what makes your company and its products and services better vs. competitors?

a) Marketing Channels

If you want to start an equipment rental company, you should only target businesses that are in urgent need of tools and equipment or who require consulting services related to those needs. 

Introduce your company to the target market in your area and city, along with any related services. You can deliver them pamphlets and do a presentation at their place of employment. 

Never undervalue the influence of traditional media like newspapers and TV, as well as print media like magazines and newspapers. They will undoubtedly aid in spreading knowledge of your company around the area. 

Utilize online resources and direct marketing strategies, such as a website, using social media, internet directories, as well as Google Ads.

b) Unique Selling Points (USPs)

What makes you stand out from the competition? In other words, how do you set yourself apart from your rivals? This is crucial since you might have to woo clients away from rival businesses especially in the early days of your business. 

A few examples of USPs for equipment rental businesses are:

  • Price : You might provide more affordable prices than your rivals
  • Specialization : You might offer specific equipment or vehicle that competitors don’t
  • Location : your store may be located closer to your customers than your competitors

equipment rental business plan

5. Management & Organizational Structure

The 5th section of your equipment rental business plan should be about people. It should include 2 main elements:

  • The management team and their experience / track record
  • The organizational structure: what are the different teams and who reports to whom?

a) Management

Here you should list all the management roles in your company.

Of course, the amount of details you need to include here varies depending on the size of your company. For example, a franchise business with a number of equipment rental offices would need more detail vs. an independent store.

If you plan on running your business independently, you may write a short paragraph explaining who are the co-founders and/or senior managers (if there are any in addition to yourself). It’s important to highlight their experience in the industry and previous relevant professional experiences.

equipment rental business plan

b) Organizational structure

No matter how many leadership roles there are, you should now explain how you intend to run the company from a management standpoint.

What are the different teams (management, sales, operations, mechanics, finance, etc.)? Note that you should include these details even if you haven’t hired anyone yet. It will show lenders and investors that you have a solid hiring and management plan to run the business successfully.

A great addition here is to add an organizational chart that list all the roles, from Directors to managers, key supervisory roles, employees and contractors. Make sure to highlight with reporting lines who manages/supervises whom.

equipment rental business plan

6. Financial Plan

The financial plan is perhaps, with the executive summary, the most important section of any business plan.

Indeed, a solid financial plan tells lenders that your business is viable and can repay the loan you need from them. If you’re looking to raise equity from private investors instead, a solid financial plan will prove them your equipment rental business is an attractive investment.

There should be 3 sections to your financial plan section:

  • Your historical financials (only if you already operate the business and have financial accounts to show)
  • The startup costs of your project (if you start a new business, or if you plan to purchase new equipment and vehicles, etc.)
  • Your 5-year financial projections

Historical Financials (optional)

In the scenario where you already have some historical financials (a few quarters or a few years), include them. A summary of your financial statements in the form of charts e.g. revenue, gross profit and net profit is enough, save the rest for the appendix.

If you don’t have any, don’t worry, most new businesses don’t have any historical financials and that’s ok. If so, jump to Startup Costs instead.

Startup Costs

Unlike other businesses, the costs to start an equipment rental company vary significantly from one business to another.

On average, we found out it costs anywhere from $813,000 to $960,000 to start a heavy construction equipment business.

The actual cost depends heavily on:

  • The type of equipment (or vehicles) you rent ;
  • The number of units making up your fleet ;
  • Whether you plan to buy or lease the equipment ;
  • The loan downpayment if you take on debt to buy the equipment upfront, etc.

For example, let’s assume you want to buy 15 heavy construction vehicles as a start for your construction equipment rental business, and you take on a loan where you need to put down 20% upfront. Now, assuming these vehicles cost $75,000 each on average, this means you must put down $225,000 yourself.

equipment rental business plan

Equipment Rental 5-Year Financial Projections

In addition to startup costs, you will now need to build a solid 5-year financial model as part of your business plan for your equipment rental company.

Your financial projections should be built using a spreadsheet (e.g. Excel or Google Sheets) and presented in the form of tables and charts in your business plan.

As usual, keep it concise here and save details (for example detailed financial statements, financial metrics, key assumptions used for the projections) for the appendix instead.

Your financial projections should answer at least the following important financial questions :

  • How much revenue do you expect to generate over the next 5 years?
  • When do you expect to break even ?
  • How much cash will you burn until you get there?
  • What’s the impact of a change in pricing (say 20%) on your margins?
  • What is your average customer acquisition cost ?

You should include here your 3 financial statements (income statement, balance sheet and cash flow statement ). This means you must forecast:

  • The number of equipment you rent over time ;
  • Your expected revenue ;
  • Operating costs to run the business ;
  • Any other cash flow items (e.g. capex, debt repayment, etc.).

When projecting your revenue, make sure to sensitize pricing and the number of customers as a small change in these assumptions will have a big impact on your revenues.

equipment rental business plan

7. Funding Ask

This is the last section of the business plan of your equipment rental business. Now that we have explained what type of equipment your company rents, to whom, at what price, but also what’s your marketing strategy, where you go and how you get there, this section must answer the following questions:

  • How much funding do you need ?
  • What financial instrument(s) do you need: is this equity or debt, or even a free-money public grant?
  • How long will this funding last?
  • Where else does the money come from? If you apply for a SBA loan for example, where does the other part of the investment come from (your own capital, private investors?)

If you raise debt:

  • What percentage of the total funding the loan represents?
  • What is the corresponding Debt Service Coverage Ratio ?

If you raise equity

  • What percentage ownership are you selling as part of this funding round?
  • What is the corresponding valuation of your business?

Use of Funds

Any business plan should include a clear use of funds section. This is where you explain how the money will be spent.

Will you spend most of the loan / investment to acquire the cost for the equipment? Or will it cover mostly the cost of the salaries of your employees the first few months?

Those are very important questions you should be able to answer in the blink of an eye. Don’t worry, this should come straight from your financial projections. If you’ve built solid projections like in our equipment rental financial model template , you won’t have any issues answering these questions.

For the use of funds, we recommend using a pie chart like the one we have in our financial model template where we outline the main expenses categories as shown below.

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Guide To Starting A Profitable Equipment Rental Company In 2021

Sept. 18, 2021

The equipment rental industry has outgrown the overall construction industry over the past few decades. Learn how you can start your own equipment rental company.


Equipment Rental Industry Overview

Owning and operating an equipment rental business can be very rewarding and profitable. Many equipment rental business owners started out with one used machine, and gradually built up their businesses through hard work, great customer service and maintaining a fresh and healthy equipment fleet.

Starting an equipment rental company is not as expensive or encumbering as you would think. With some careful planning, initial capital, and passion for the industry, you can start your own equipment rental company in a few weeks.

The equipment rental industry has grown at about 5% per year over the past few decades. The outlook for the industry is very positive, with many industry experts forecasting 4-5% annual growth over the coming years. The long-term shift by contractors to rent more equipment is causing the equipment rental industry to outgrow the overall construction industry.

Equipment Rental Industry Market Share

The equipment rental industry is very fragmented - this means that the vast majority of industry sales are generated by small and medium-sized rental companies. According to the American Rental Association (ARA), the top 10 equipment rental companies have about 35% market share, and the top 3 companies have about 25% market share.

The largest North American equipment rental companies include United Rentals , Sunbelt Rentals , Herc Rentals , Home Depot Rentals , and Ahern Rentals . The total annual industry sales are over $50 billion, and the long-term growth rate is about 5% per year.

Equipment Rental Market Share Pie Chart Source United Rentals

Source: United Rentals and Equipment Radar Takeaway: The top three industry players have a 25% combined market share. This means the industry is very fragmented and comprised mostly of small and medium-size companies.

Combined US Equipment Rental Industry Market Size

Source: United Rentals , American Rental Association (ARA) , Rental Equipment Register (RER) , and US Census Bureau Takeaway: The US Equipment Rental industry size is over $50 billion, with a growth rate of about 5% each year.

US Equipment Rental Industry Growth

Source: United Rentals, ARA, RER, and US Census Bureau Takeaway: The US Equipment Rental industry has outgrown overall construction spending since 1997.

Equipment Rental Covers More Than Just Construction Machinery

Many equipment rental companies augment their equipment fleets to include general tools, HVAC, power generation, and event (party, wedding, concerts, etc) equipment.

The ARA segments the rental industry into three primary categories:

  • Construction and Industrial Equipment: This category primarily serves construction firms and contractors. Equipment typically includes earthmoving equipment such as excavators, loaders, backhoes and compaction machinery, light towers, aerial work platforms. This segment can also include road infrastructure, energy projects, commercial buildings, malls, demolition and more.
  • DIY General Tool Equipment: This category includes equipment typically rented by professional contractors and do-it-yourself (DIY) homeowners. Equipment includes small and light construction equipment such as power tools, air compressors, aerators, lawn tractors, compact tractors, skid-steer loaders and small excavators, etc.
  • Party/Wedding/Event Equipment: This category includes equipment rented by consumers, homeowners and businesses for parties and events. Items can include tents, tables, chairs, lights, dance floors, decorations, linens, plates and glassware, portable restrooms, concession equipment, inflatables (moonwalks), and other furniture. Projects can range from large corporate events to small family gatherings.

When you start your rental company, you can choose to serve one or more categories. Many established rental companies offer an all-in-one stop rental offering. You should research your local market demand for each category to understand which suits your local market best.

Aerial lifts and earthmoving equipment tend to be popular categories for equipment rental companies. When you choose your categories, you should study the local rental rates, seasonality (demand fluctuates through the year based on weather and construction patterns) and competition.

Herc Rentals Equipment Fleet Mix

Herc Rentals Equipment Fleet Composition Mix

Source: Herc Rentals Takeaway: Large rental companies such as Herc Rentals have diverse fleets. Both United Rentals and Herc Rentals have placed increased focus on expanding into the specialty rentals category over the past few years.

Equipment Rental Customers

The equipment and event rental industry offers customers the opportunity to gain the benefit of using goods (from excavators and aerial lifts to party tents) for a defined time. Customers are attracted to rentals instead of purchasing equipment for multiple reasons, including:

  • Control expenses and inventory
  • Wide selection of equipment
  • Professional customer care / service
  • No need for maintenance or downtime
  • Save on storage / warehousing
  • Reliability
  • Equipment tracking
  • Conserve capital
  • Manage risk

Customers can range from professional contractors who need aerial lifts for several months to an average homeowner who needs a stump grinder for a weekend project.

Steps to Starting Your Equipment Rental Business

1. business plan.

Every great business out there today started with a simple idea. To transform that idea from something imaginary into something real, you should make a business plan that outlines your strategy and thoughts. Writing a business plan is one of the best ways to force yourself to think about your business from many angles. It also is a helpful document to share with potential investors and lenders.

When you create your business plan, it is important to keep your expectations realistic. Setting goals and metrics too high at the beginning can lead to wasted time and money down the road. Remember that there are always unforeseen costs and challenges with any new venture, so it is prudent to bake in padding and leeway.

A typical business plan includes the following sections:

  • Summary: Wait to write this at the end. This is the 30,000-foot view of your entire business plan summarized in a few paragraphs. This helps others understand the business plan without reading the entire document.
  • Company Description: Write about what your company will do, who it will involve (you and any others), where it will be located, what kind of equipment you will buy for your fleet, what hours you plan on working, etc.
  • Market Analysis: Understand the rental industry in your area. Get to know the rental rates in your area. Talk with people in the industry to understand who your main customers would include.
  • Competitive Analysis: List out the competition, what they do, how big they are, and how you plan to offer a better value proposition.
  • Product/Service Offering: Determine which types of equipment you will offer for rent. Also, make a road map of where you plan on expanding as your business grows. Will you offer parts and service too?
  • Marketing Plan: Figure out how you will tell the world about your new company. Create social media pages and advertise in local publications. Make sure you add your business to online directories such as Google Maps and the Equipment Radar Directory so people can find it.
  • Financial Plan: Spend a lot of time thinking about the capital resources you have to deploy and how you plan on deploying them. Most equipment rental companies borrow money from banks to make new and used machinery purchases. Figure out which lenders you can work with to buy your machinery.

2. Form Your Company

You should create a legal entity such as a corporation or LLC to separate your business interests from your personal interests. You must register your business with your state, pay a registration fee, and also register with the IRS . Once you have formed your company, you should open a bank account and deposit initial capital into it.

3. Purchase New or Used Equipment For Fleet

Many newly-formed rental companies start with just one used machine, and later they upgrade and expand their fleets over time. You can shop online for new and used equipment to buy your first equipment.

4. Create Safety & Risk Management Plans

Buy proper insurance to cover your business from accidents and injuries. Talk with your business insurer, so you understand what is covered and what is not covered.

Create safety guidelines for your shop, and teach employees how to handle the equipment safely. Make sure any dangerous areas in your storage or warehouse are safeguarded.

5. Organize Business Operations

Choose a store location. You will need enough space to store your equipment, an office area for you and other workers to work, a service area, a check-in/out counter to handle customers, and a showroom for equipment, accessories and more.

A nice-looking showroom can be a strong selling point for your business. It gives your customers an opportunity to look around and see what you have to offer. You should think of your showroom as your marketing platform.

6. Make Maintenance & Fleet Refresh Plan

You should pay close attention to the condition of your fleet. Inspect it after every rental, and perform both scheduled and unscheduled maintenance as needed. The top-performing rental companies typically have a systematized process to inspect, clean and renew equipment after it is returned from a job site.

As your equipment begins to age, you should consider selling your older equipment and buying newer equipment to keep your overall rental fleet relatively new. Large rental companies typically target an average fleet age of about 50 months (4 years old), which means that they sell equipment when it gets to be about 7-8 years old. Customers often prefer newer equipment that looks good.

Financial Planning

Rental rates.

Rental rates are often determined by local supply and demand for rental equipment in your area. Rates go up and down based on time of year, type of equipment and equipment condition.

Rental rate changes are very important to monitor. Each $1 change in rental rate is a $1 increase or decrease to the bottom line. When your rental rate changes, your other costs do not change much.

Typically most companies will provide daily, weekly and monthly rental rates. As the rental term extends, the average daily rate tends to go lower. Weekly and monthly rentals can often be more profitable for equipment rental companies even if their average daily rental rates are lower because there are not as many inefficiencies associated with them (transportation to and from the location, downtime for inspection and servicing, etc).


Utilization is an important metric that you should watch carefully. Higher utilization typically means higher profitability. The equipment rental business is largely a fixed-cost business - your equipment, building lease, employee costs all stay about the same whether you have your equipment out on rent or not.

Utilization is a two-edged sword. If your utilization is too high and you do not have any equipment available for rent, then customers may be forced to go with a competitor. It's best to increase your fleet size if utilization goes too high, and reduce your fleet size if your utilization goes too low.


Construction tends to be very seasonal, depending on your geographic location. You should research the swings in seasonality to understand business trends during the busy summertime and slower wintertime.


Equipment rental is susceptible to economic cycles. When the broader economy slows and construction pulls back, the demand for rental equipment also slows. Typically rental rates will soften or fall during a downturn.

Rental Industry Terms & Metrics

The industry uses several common terms to measure equipment fleets and financial performance. Below is a list created by the ARA to help you get acquainted with industry standards:

Original Equipment Cost (OEC)

Time (physical) utilization (tu), financial utilization ($u), fleet age (age), change in rental rate %rr.

Keeping a fresh fleet that is well-maintained and serviced is very important to managing customer relations and expectations. Typically rental companies will target an average age for the entire fleet. By regularly buying newer equipment and selling older equipment, the rental company can maintain a constant fleet age.

Below is a sample overview of United Rental's fleet statistics from its 2020 annual report :

Starting your own equipment rental company is within the realm of possibilities. Spend time researching your local market and creating a business plan, and soon enough, you will be ready to launch your new venture.

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Equipment Rental Business

Back to All Business Ideas

How to Start an Equipment Rental Business

Written by: Carolyn Young

Carolyn Young is a business writer who focuses on entrepreneurial concepts and the business formation. She has over 25 years of experience in business roles, and has authored several entrepreneurship textbooks.

Edited by: David Lepeska

David has been writing and learning about business, finance and globalization for a quarter-century, starting with a small New York consulting firm in the 1990s.

Published on April 13, 2022 Updated on February 14, 2024

How to Start an Equipment Rental Business

Investment range

$8,550 - $18,100

Revenue potential

$62,000 - $156,000 p.a.

Time to build

1 – 3 months

Profit potential

$50,000 - $125,000 p.a.

Industry trend

If you’re looking to start a business from home and make good money, an equipment rental business may be just the ticket. It’s a large and growing industry, expected to rebound more than 60% from a huge dip in 2020. Equipment rental offers all kinds of opportunities – from party equipment to large tool rental and heavy construction equipment. You’ll need to make an investment to get started, but you should start seeing a return relatively quickly. 

Before you start shopping for your items of choice, you’ll need to learn more about the business side of things. Luckily, this step-by-step guide details the entire process of developing and launching a successful equipment rental business. 

Looking to register your business? A limited liability company (LLC) is the best legal structure for new businesses because it is fast and simple.

Form your business immediately using ZenBusiness LLC formation service or hire one of the Best LLC Services .

Step 1: Decide if the Business Is Right for You

Pros and cons.

Starting an equipment rental business has pros and cons to consider before deciding if it’s right for you. 

  • Good Money – Depending on the equipment, you can make hundreds a day
  • Flexible – Run your business from home on your hours
  • Minimal Labor – Pickups and drop-offs only
  • Big Competition – Compete with companies like Home Depot
  • Up Front Investment – Spend some money get started

Equipment rental industry trends

Industry size and growth.

  • Industry size and past growth – The global equipment rental business was worth $53.2 billion in 2020, after more than a 60% decline from 2019 numbers.(( )) 
  • Growth forecast – The global equipment rental business is projected to grow more than 60% by 2023 to regain its 2019 total of more than $87 billion. 
  • Number of businesses – In 2021, 10,873 tool and equipment rental businesses were operating in the US.(( )) 
  • Number of people employed – In 2021, the US tool and equipment rental business employed 27,798 people. 

equipment rental industry size and growth

Trends and challenges

Trends in the equipment rental industry include:

  • More and more construction companies and builders are opting to rent large equipment rather than buy, which is good news for the equipment rental industry.
  • The new infrastructure bill, which is driving the construction industry, is also expected to increase the equipment rental industry.
  • DIY projects are trending, with homeowners attempting to do remodeling and repairs on their own, and these people tend to rent rather than buy tools and equipment.

Challenges in the equipment rental industry include:

  • Evolving technology makes it necessary for equipment rental companies to periodically upgrade their equipment.
  • New technologies are being used to track equipment, which is solving a consistent problem in the equipment rental business but is an added expense for rental companies to assume. 

equipment rental industry Trends and Challenges

How much does it cost to start an equipment rental business?

Startup costs for an equipment rental business range from $8,500 to $18,000, although the costs vary widely depending on the type of equipment. These calculations assume that you will start out with large tools such as chainsaws, tile saws, drills, power washers, and so on. Costs also include the down payment on a truck or van to transport your equipment. 

Be sure to have an equipment rental agreement in place that customers must sign, and it should include a liability waiver in case someone is injured by the equipment. Also, make sure that your equipment is properly insured. 

How much can you earn from an equipment rental business?

Daily rental rates for most smaller tools average about $40. Your profit margin should be about 80%. 

In your first year or two, you might have 10 pieces of equipment and rent six of them five days per week, bringing in more than $62,000 in annual revenue. This would mean $50,000 in profit, assuming that 80% margin. As your business gains traction, you could add 10 more pieces of equipment and rent 15 of them five days a week. With annual revenue of $156,000, you’d make a healthy profit of $125,000.

equipment rental business earnings forecast

What barriers to entry are there?

There are a few barriers to entry for an equipment rental business. Your biggest challenges will be:

  • The startup costs to purchase equipment
  • The space to store your equipment

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Step 2: hone your idea.

Now that you know what’s involved in starting an equipment rental business, it’s a good idea to hone your concept in preparation to enter a competitive market. 

Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.

Why? Identify an opportunity

Research equipment rental businesses in your area to examine their products, price points, and what rents best. You’re looking for a market gap to fill. For instance, maybe the local market is missing a business that rents wet tile saws, or party supplies and party equipment like bouncy houses and karaoke machines.  

equipment rental business plan

You might consider targeting a niche market by specializing in a certain aspect of your industry, such as construction equipment or larger tools for the do-it-yourself-er.

This could jumpstart your word-of-mouth marketing and attract clients right away. 

What? Determine your products or services

You’ll just need to determine what equipment you want to rent. You should specialize in a certain type of equipment so that you can focus on a certain target market. You might want to call construction or remodeling companies to see what they are most likely to rent. 

How much should you charge for equipment rental?

Prices will vary based on the type of equipment that you rent. Check local market prices to make sure you’re competitive. You should aim for a profit margin of about 80%. 

Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.

Who? Identify your target market

Your target market will either be construction-related companies or homeowners. You should spread out your marketing to include TikTok, Instagram, Facebook, and LinkedIn. 

Where? Choose your business premises

In the early stages, you may want to run your business from home to keep costs low. But as your business grows, you’ll likely need to hire workers for various roles and may need to rent out a storage space for your equipment. You can find commercial space to rent in your area on sites such as Craigslist , Crexi , and Instant Offices .

When choosing a commercial space, you may want to follow these rules of thumb:

  • Central location accessible via public transport
  • Ventilated and spacious, with good natural light
  • Flexible lease that can be extended as your business grows
  • Ready-to-use space with no major renovations or repairs needed

equipment rental business idea rating

Step 3: Brainstorm a Business Name

Your business name is your business identity, so choose one that encapsulates your objectives, services, and mission in just a few words. You probably want a name that’s short and easy to remember, since much of your business, and your initial business in particular, will come from word-of-mouth referrals.

Here are some ideas for brainstorming your business name:

  • Short, unique, and catchy names tend to stand out
  • Names that are easy to say and spell tend to do better 
  • Name should be relevant to your product or service offerings
  • Ask around — family, friends, colleagues, social media — for suggestions
  • Including keywords, such as “equipment rental” or “tool rental”, boosts SEO
  • Name should allow for expansion, for ex: “Premier Rental Solutions” over “Power Tools Rental Solutions”
  • Avoid location-based names that might hinder future expansion
  • Use online tools like the Step by Step Business Name Generator . Just type in a few keywords and hit “generate” and you’ll have dozens of suggestions at your fingertips.

Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these. 

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Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that sets your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.

Step 4: Create a Business Plan

Every business needs a plan. This will function as a guidebook to take your startup through the launch process and maintain focus on your key goals. A business plan also enables potential partners and investors to better understand your company and its vision:

  • Executive Summary: Summarize your equipment rental business’s goal to provide a wide range of quality, well-maintained equipment for short-term or long-term rental to various industries.
  • Business Overview: Describe your business’s focus on renting out equipment such as construction machinery, event gear, or audio-visual technology to meet diverse client needs.
  • Product and Services: Detail the types of equipment available for rent, including categories like heavy machinery, landscaping tools, party supplies, or audio-visual equipment.
  • Market Analysis: Assess the demand for rental equipment, considering target markets like construction companies, event planners, or DIY homeowners.
  • Competitive Analysis: Compare your rental offerings to other equipment rental businesses, focusing on your strengths like equipment variety, maintenance quality, or flexible rental terms.
  • Sales and Marketing: Outline your strategy for attracting customers, including digital marketing, building relationships with industry professionals, or offering competitive pricing.
  • Management Team: Highlight the experience and qualifications of your team, especially in areas like equipment maintenance, customer service, and business management.
  • Operations Plan: Describe the process of equipment rental, from inventory management and maintenance to customer service and delivery logistics.
  • Financial Plan: Provide an overview of financial aspects, covering startup costs, pricing strategy, and expected revenue.
  • Appendix: Include supplementary documents such as equipment catalogs, maintenance records, or market research data to support your business plan.

what to include in a business plan

If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.

Step 5: Register Your Business

Registering your business is an absolutely crucial step — it’s the prerequisite to paying taxes, raising capital, opening a bank account, and other guideposts on the road to getting a business up and running.

Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business! 

Choose where to register your company

Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you’re planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to equipment rental. 

If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state. 

Choose your business structure

Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your equipment rental business will shape your taxes, personal liability, and business registration requirements, so choose wisely. 

Here are the main options:

  • Sole Proprietorship – The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
  • General Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
  • Limited Liability Company (LLC) – Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts.
  • C Corp – Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation.
  • S Corp – An S-Corporation refers to the tax classification of the business but is not a business entity. An S-Corp can be either a corporation or an LLC , which just need to elect to be an S-Corp for tax status. In an S-Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.

types of business structures

We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization , and answer any questions you might have.

Form Your LLC

Choose Your State

We recommend ZenBusiness as the Best LLC Service for 2023

equipment rental business plan

Step 6: Register for Taxes

The final step before you’re able to pay taxes is getting an Employer Identification Number , or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN. 

Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.

equipment rental business plan

The IRS website also offers a tax-payers checklist , and taxes can be filed online.

It is important to consult an accountant or other professional to help you with your taxes to ensure you’re completing them correctly.

Step 7: Fund your Business

Securing financing is your next step and there are plenty of ways to raise capital:

  • Bank loans: This is the most common method but getting approved requires a rock-solid business plan and strong credit history.
  • SBA-guaranteed loans: The Small Business Administration can act as guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan .
  • Government grants: A handful of financial assistance programs help fund entrepreneurs. Visit to learn which might work for you.
  • Friends and Family: Reach out to friends and family to provide a business loan or investment in your concept. It’s a good idea to have legal advice when doing so because SEC regulations apply.
  • Crowdfunding: Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund your vision. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business.
  • Personal: Self-fund your business via your savings or the sale of property or other assets.

Bank and SBA loans are probably the best option, other than friends and family, for funding an equipment rental business. You might also try crowdfunding if you have an innovative concept. 

types of business financing

Step 8: Apply for Licenses/Permits

Starting an equipment rental business requires obtaining a number of licenses and permits from local, state, and federal governments.

Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration ( OSHA ), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits. 

You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more. 

You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package . They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.

This is not a step to be taken lightly, as failing to comply with legal requirements can result in hefty penalties.

If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.

Step 9: Open a Business Bank Account

Before you start making money, you’ll need a place to keep it, and that requires opening a bank account .

Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your equipment rental business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.

Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account. 

Step 10: Get Business Insurance

Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.

Here are some types of insurance to consider:

  • General liability: The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
  • Business Property: Provides coverage for your equipment and supplies.
  • Equipment Breakdown Insurance: Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
  • Worker’s compensation: Provides compensation to employees injured on the job.
  • Property: Covers your physical space, whether it is a cart, storefront, or office.
  • Commercial auto: Protection for your company-owned vehicle.
  • Professional liability: Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
  • Business owner’s policy (BOP): This is an insurance plan that acts as an all-in-one insurance policy, a combination of the above insurance types.

types of business insurance

Step 11: Prepare to Launch

As opening day nears, prepare for launch by reviewing and improving some key elements of your business. 

Essential software and tools

Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks. 

You may want to use industry-specific software, such as Rental 360 , EZ Rent Out , or Point of Rental , to manage your inventory, schedule, invoices, and payments. 

  • Popular web-based accounting programs for smaller businesses include Quickbooks , Freshbooks , and Xero . 
  • If you’re unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences for filing incorrect tax documents can be harsh, so accuracy is crucial. 

Develop your website

Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism.

You can create your own website using services like WordPress, Wix, or Squarespace . This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.

They are unlikely to find your website, however, unless you follow Search Engine Optimization ( SEO ) practices. These are steps that help pages rank higher in the results of top search engines like Google.

Here are some powerful marketing strategies for your future business:

  • Strategic Partnerships: Forge partnerships with construction companies, event planners, or other businesses that frequently require equipment, offering them exclusive deals or discounts for consistent rental agreements.
  • Social Media Campaigns: Leverage platforms like Instagram and LinkedIn to showcase your equipment in action, share success stories, and engage with your audience by running targeted ads to reach potential customers in your local area.
  • Referral Programs: Implement a referral program that rewards existing customers who refer new clients, encouraging word-of-mouth marketing and building a strong network of satisfied clients.
  • Local SEO Optimization: Optimize your online presence for local search by ensuring your business information is accurate and consistent across online directories, making it easier for potential customers in your area to find you.
  • Specialized Equipment Packages: Create bundled packages for specific industries or events, offering a convenient and cost-effective solution for customers who may need a variety of equipment for a particular project or occasion.
  • Community Involvement: Sponsor local events, join community groups, and participate in relevant industry associations to raise awareness about your business and build trust within your community.
  • Online Reviews and Testimonials: Encourage satisfied customers to leave positive reviews on online platforms like Google, Yelp, or industry-specific websites, boosting your credibility and influencing potential clients.
  • Seasonal Promotions: Introduce seasonal promotions or discounts during peak periods when demand for certain types of equipment is higher, attracting more customers during specific times of the year.
  • Educational Content: Create informative content, such as blog posts, videos, or webinars, that educates your audience on how to use different types of equipment safely and effectively, positioning your business as an industry authority.
  • Customer Loyalty Programs: Implement a loyalty program that rewards repeat customers with discounts, exclusive offers, or priority access to new equipment, fostering long-term relationships and customer retention.

Focus on USPs

Unique selling propositions, or USPs, are the characteristics of a product or service that set it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your equipment rental business meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire. 

Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your equipment rental business could be: 

  • Rent top-of-the-line tools for your DIY projects
  • Why buy when you can rent everything you need for your party?
  • Heavy construction equipment at great rates 

unique selling proposition

You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running an equipment rental business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in equipment rental for years and can offer invaluable insight and industry connections. 

The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in equipment rental. You’ll probably generate new customers or find companies with which you could establish a partnership. 

Step 12: Build Your Team

If you’re starting out small from a home office, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for an equipment rental business include:

  • Drivers – equipment drop-offs and pickups
  • General Manager – scheduling, inventory management, accounting
  • Marketing Lead – SEO strategies, social media

At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need. 

Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or You might also consider a premium recruitment option, such as advertising on Indeed , Glassdoor , or ZipRecruiter . Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent. 

Step 13: Start Making Money!

An equipment rental business is a great opportunity to start a company that can grow. You can run your business from home and make an excellent living. Start with small stuff, work your way up to larger items and someday your business could rival United Rentals, the largest equipment rental company in the world! 

Now that you understand the business of equipment rental, it’s time to head to the hardware store and start shopping so you can start your successful entrepreneurial journey.

  • Equipment Rental Business FAQs

Yes, you can make good money from equipment rentals since your ongoing expenses will be low. The key is to purchase the equipment that people will be most likely to rent.

Prices will vary based on the type of equipment you rent. Check local market prices to make sure that you’re competitive. You should aim for a profit margin of about 80%. Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up and final price points.

It is important to establish a maintenance schedule and set procedures for handling repairs, including regular inspections and preventative maintenance, as well as prompt response to customer complaints or concerns. 

Yes, it is possible to start an equipment rental business on the side, although it may require significant time and effort to manage both the business and your other commitments. It is important to carefully consider your available time, resources, and expertise, as well as the potential demand for your services and the competition in the market.

Renting out heavy machinery or specialized equipment may be subject to additional regulations and safety requirements, depending on the type of equipment and the industry in which it is used. It is important to research and comply with all relevant regulations and safety standards, and to ensure that your staff and customers are trained and educated on safe operation and handling of the equipment.

To increase customer retention for your equipment rental business, you can focus on providing exceptional customer service, including prompt response to inquiries and complaints, flexible rental terms, and personalized attention to each customer’s needs. You can also offer loyalty programs or incentives for repeat business, and regularly communicate with customers to stay top of mind and offer new promotions or deals. 

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  • Decide if the Business Is Right for You
  • Hone Your Idea
  • Brainstorm a Business Name
  • Create a Business Plan
  • Register Your Business
  • Register for Taxes
  • Fund your Business
  • Apply for Licenses/Permits
  • Open a Business Bank Account
  • Get Business Insurance
  • Prepare to Launch
  • Build Your Team
  • Start Making Money!

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Sales Articles

It’s not easy selling manual labor services anymore. Whether you’re your own salesperson or you have a sales team, these resources will help improve your sales presentations when dealing with skeptical homeowners.

How to Start an Equipment Rental Business [WITH RESOURCES]

Not sure where to start when building an equipment rental business? Don’t stress. 

how to start an equipment rental business

This article covers everything from identifying your target audience to starting a business plan. Set yourself up for success with this quick how-to guide for starting your own equipment rental business.

Identify your target market.

The first step to ensuring success is knowing what industries you’ll serve. Also consider the number of businesses in that industry located within an average 50 miles from your business. 

Already know what equipment you plan to carry? Then you likely know your target audience!

Research your rental competition.

It’s important to note local competition. How many rental businesses are in your area? Is success feasible? 

When considering the competition, be sure to note the following for each company: 

  • Type of equipment available
  • Rental prices (daily, weekly, monthly)
  • Services (in addition to renting, do they sell new/used equipment)
  • Hours of operation (the later you’re open, the more convenient you are for contractors)
  • Business size
  • Industries served

Then, develop a plan for making your business stand out. Will you stay open later to give contractors more time to return your equipment? Will you offer equipment that helps roofers, contractors, and restoration professionals, so it’s always out in the field making you money?

Determine what equipment you should offer at your equipment rental business.

Once you know your audience and familiarize yourself with the competition, it’s easier to determine what equipment you should carry. If you plan to serve the general construction community, for example, consider equipment that will help them accomplish their one-off jobs. Contractors are more likely to rent equipment they don’t use regularly.

rb4000 fleet

Here are a few tools and equipment to consider for your rental fleet: 

  • Pneumatic nail guns
  • Air compressors
  • Portable generators
  • Scissor lifts
  • Self-propelled dump trailers
  • Compact cranes

Build and maintain a budget.

In order to build your business without going bankrupt, it’s important to develop and stick to a budget. If you plan to consult investors, they’ll want to know your growth strategy, as well, so consider creating a business plan. 

Keep your budget in mind when choosing equipment for your new rental company. Don’t be afraid to start small–every little bit helps!

Create a website and marketing strategy for your equipment rental company. 

Make it easy for the right people to find you. One way to do this is to build a professional website for your equipment rental business. According to a survey by , 36% of small businesses don’t have websites, yet most people today look up businesses online before heading to their physical locations. True Co. Marketing in Leola, PA , creates custom websites so you can devote more time to researching equipment and other ways to build your business.

Some equipment manufacturers’ websites feature search tools that allow contractors to locate nearby stores carrying their equipment. For example, when you invest in Equipter products for your rental company, you can also be added to Equipter’s database of rental locations for free, searchable by anyone. The Equipter Find A Rental Tool delivers each searcher a list of local rental companies based on their zip code. That’s free brand awareness for you and just one more way to get in front of your target audience. Click below to watch a success story and learn more about adding Equipter products to your rental fleet.

Why Add Equipter Products To My Rental Fleet?

Check out these resources to learn more about how to start an equipment rental business.

Need more info? We’re happy to help! Explore the two collections of resources below to efficiently kickstart your new equipment rental business in no time.

General Resources

  • Write Your Business Plan (U.S. Small Business Administration)
  • Create a Small Business Budget in 5 Simple Steps (FreshBooks Cloud Accounting)
  • Why the RB4000 is Perfect for Your Rental Fleet (Equipter)
  • 6 Ways to Boost Your Equipment Rental Business Profitability (Equipter)
  • Guide to Financing Equipment for Roofing (Equipter)

Resources for New Equipter Rental Businesses

  • How to Start an Equipter Rental Business (Equipter)
  • 5 Tips for Running a Successful Equipter Rental Business (Equipter)
  • Financing the Equipter (Equipter)

One way to stay up to date with the happenings in the rental industry is to sign up for Equipter’s quarterly newsletter, the Rental Insider. Enter your info below, select "Equipment Rental" in the Industry Detail dropdown, and you’ll be all set to receive information on the latest trends and products from reputable sources.

equipment rental business plan

Itefy Asset and Equipment Management Software

How To Start An Equipment Rental Business: Your Guide to Success

In this article, we discuss how to start an equipment rental business, what to consider when planning to start your business, and offer proven tips and insights to help your business thrive.

equipment rental business plan

An equipment rental business start-up can be an extremely lucrative and effective form of business or income that you can grow to a (relatively) passive income stream. In order to keep your business viable and profitable, there are several key considerations that you should think about when it comes to administrative functions, hiring out equipment and other elements of your business operations.

Is an equipment rental business profitable? 

Before beginning your business, it is important for you to consider if the model will suit your current needs. One of the key ways to do this is to consider a simple question: “Is an equipment rental business profitable?” Equipment rental business profitability can vary greatly depending on your connections, location, ability to procure top-quality equipment in the industry, and more. Because of this, you may begin to find new and best ways to boost your equipment rental business profitability. 

Learning how to make your tool rental business profitable comes down to determining what barriers you have to overcome in order to reach success. It is possible to make a rental business profitable and to reinvest that profit to continue gaining additional benefits. However, you must start off with a significant investment in industry-leading tools and equipment to make your business competitive against other competitors. 

There is no true limit to the amount of profit that your rental business can make. This is due to the fact that these businesses are easy to delegate, leaving you more opportunity to expand your reach and start new sectors in more profitable areas. Your first rental business will ultimately be a learning experience and can serve as a framework for additional businesses if you feel so inclined. 

Most profitable rental equipment

Before you make your equipment investment, you’re likely working to evaluate which investments will get you the most profitable rental equipment. If you plan to serve a certain subsect of the industry, that is vital to take into account. However, if you’re looking to serve the general event and performance space, there are certain timeless pieces that you can begin with, and continue to expand upon over time. Consider conducting micro surveys of individuals in your space through services such as OnePulse or other e-services, allowing you to get real-time data based on current trends. You can also conduct a competitor analysis to determine which offerings are most appropriate for your current phase of business. 

How much money do you need to start a rental business?

An equipment rental business can be a significant upfront investment as you purchase your gear, and can continue to offer additional instances of cost for one-time or recurring events — such as repairs or travel and shipment costs. You can also factor a variety of different factors into account, such as: 

  • Business licensing fees 
  • Incorporation costs 
  • Recouperation costs 
  • Location rent fees or monthly costs
  • Other operating costs, such as employee payroll 

These elements are important to consider when you’re creating your budget for starting a rental budget of any type. While the cost up front may seem significant, you can easily obtain a small business loan from banking institutions in the form of credit or a lump sum. You can also consider private loans or financing as well. 

No matter how you choose to fund your business, you may consider putting together a detailed financial plan and budget for your equipment rental business to show investors exactly what you plan to do with their cost, and how you plan to recoup the amount and pay it back in full. Being as detailed and as up front as possible can help to increase your chances of securing financing on the first few rounds of attempts, and can speed your process to launch. 

Equipment rental business model 

A business plan can serve as a guiding framework for your business, and acts as your roadmap to success. Your business plan should have all considerations of your business listed, explained, and planned for, ranging from logistical needs to overall short and long-term goals. While there is no explicit equipment rental business model, you will be following a B2C framework if you are dealing in rentals only. Using this, you can craft a thorough business plan for your tool rental business. Below, we’ve listed everything that you should include in your small equipment rental business plan: 

Market Analysis

Conducting a market analysis is valuable, and shows investors and stakeholders that you have considered the needs of your target market. This should be toward the front of your business plan, and can illustrate how your business can best meet the needs of your ideal customer. When conducting market analysis, consider including a form of a customer profile timeline, highlighting their journey through your marketing funnel. This isn’t just advantageous to your marketing team and salespeople, this can help you to identify any points of weakness before presenting your business plan, helping you to make it as strong as possible before pitching to investors. 

When creating your market analysis, micro-surveys may be helpful, as well as any spec sheets that highlight your specific product features or offerings that can directly address customer needs. You can connect with this concept more by creating customer profiles, otherwise known as personas or avatars. In this part of your analysis, you’ll be identifying core demographic and defining characteristics of your audience, and demonstrating how your products can help each sub-class of your potential customers. Illustrating these concepts with as many visualizations as possible can help you to accurately organize your information in a digestible way. Always be sure to cite your sources, and verify all data points and statistics that you choose to use to protect your credibility. 

Competitor Analysis 

Now that you know your ideal customer, you will want to analyze your competition. Honesty is vital here, and can more accurately enable you to see what your competitors do well, and what they can improve on. Taking this information and creating strategies that apply to your equipment rental business can help to easily cement your place in the market and elevate you to a viable choice for your ideal customer. 

When conducting your competitor analysis, it’s important to leave no stone unturned. Review everything that you can find, including their social media presence across all platforms, customer reviews, website content and ads, as well as their offerings and price points. Be as thorough as possible, as all of this information can inform your own lucrative business and marketing strategy, which we’ll cover next. 

Marketing Strategy 

Before you launch your business, it’s important to solidify an initial marketing strategy that you will use to begin to reach your ideal customers. Taking a diverse, multi-channel approach to outreach can significantly boost your opportunity to convert your prospects within a shorter timeframe, especially if you rely on your previously created avatars or personas. Taking information learned from your competitor analysis and creating outreach around their gaps can be a great place to start, and you can continue to refine your messaging over time as you determine what “works” for your ideal audience and business. 

Your marketing strategy should be dynamic and reach across a wide variety of channels. Beyond doing online ads, you may consider the following social media channels to use when building your presence: 

  • Facebook 
  • TikTok 
  • Twitter 
  • LinkedIn 

Additionally, there are other avenues of marketing you can use as well, which we’ve summarized below: 

  • Content Marketing : Content marketing is done through your website and blogs, using organic content and optimizing it to have certain keyword density that is attractive to search engine algorithms. This is usually under the umbrella of SEO, otherwise known as search engine optimization. You can hire a skilled copywriter to assist you in creating your content and optimizing it for Google’s processes. 
  • Social Media Ads : Beyond simply posting on social media, you can also create ads that are designed to speak to your ideal customers. There are a variety of ads that you can use, most commonly centered around lead generation or retargeted. Every platform has different preferences, so you may consider bringing on an ads specialist or hiring an AI-based service to help you dial in your campaigns. 
  • Search Engine Marketing : SEM, otherwise known as Search Engine Marketing, is helpful and can place your ads directly on the search page. This is great for brand recognition, especially if your site is built and optimized for people to land on when they click into the ad. An SEO or SEM specialist will be helpful to help you create and launch your campaigns in the search engine. 
  • Community Outreach : There is still a lot to be said for simple community outreach. You will make a splash with local customers by showing up where they are and building brand awareness — such as farmer’s markets or performances. 

Financial Overview 

This is the framework budget that you will include to show investors exactly how you will spend your money. You can use your budget that you created when determining if your business will be profitable, and highlight the key figures that you will need to get there. You can make this component of your business plan as effective as possible by using graphics, statistics, and visual mediums to convey your needs easily to key stakeholders that could invest in your business. 

Proven tips to start an equipment rental business

Now that you’ve taken the leap to start your own equipment rental business, it’s time to optimize. Below, we’ve compiled a list of the top proven tips to help you through the launch process:

Create a plan for routine servicing and preventative maintenance

Taking the time to create a plan for routine and preventative maintenance for your rental tools is important not only for your team, but also for your investors. This can show that you have anticipated the needs required in order to keep the equipment profitable and protected, offering insight into your plan for longevity and user safety. This can also reduce the amount of customer service complaints and risk. Sharing this plan as part of your business plan is ideal. 

Get legal help for your contract drafts 

Never launch without a legally binding contract. Hiring on a lawyer to help you draft initial copy for your contracts is a great idea to protect your investments and to keep the interests of all parties as protected as possible. 

Invest in an equipment management software system 

Investing in a centralized equipment management system can help you to easily navigate equipment location, maintenance needs, team management, and more. Housing this in one simple software can help you to easily access and complete reporting, management tasks, and more. This is one investment that you won’t want to miss. 

Launching your equipment rental business has never been easier

A tool rental business is a great business opportunity for 2022, especially as customers are more reliant on tech than ever before. This article offers key insights that you can use to successfully create, launch, and manage your equipment rental business.

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Starting an Equipment Rental Business – A Complete Guide

  • November 28, 2023

Equipment rental business - a complete guide on how to start it with EZRentOut

The equipment rental industry is expected to reach USD 58.49 billion by 2029, up from USD 42.64 billion in 2022. The constant industry growth means it is ripe for investment. Creating a robust plan can help you start your business in this industry today. 

If you are looking to start your own equipment rental business, there are numerous aspects to consider before you jump in. From finding the right niche to targeting the right audience, and from buying the right equipment to marketing it correctly – we cover every step. 

Here are 7 steps for you to follow to get your equipment rental business up and running : 

1. Get started with your equipment rental business 

The first step towards starting your equipment rental business is to understand the market, industry, and technical jargon. Get the idea down on paper or create a digital mindmap to get a clear picture of the business roadmap. Connect all the relevant dots to verify your idea and its realistic implementation. 

Conceptualize and refine your idea 

Conceptualize and refine your idea 

Once you have the first machine rental business idea drafted, sit down to refine it further. Funnel it repeatedly through different filters like industry saturation, niche saturation, local competition, etc. This will help you refine the exact idea that will work best for you. 

Here are a few tips that will help you: 

  • Find the right equipment 

You can find different types of equipment to rent out for different purposes. For instance, if you have enough capital, you can build a fleet of heavy construction equipment like bulldozers, loaders, etc. You can also get portable and handheld equipment like drills, chainsaws, etc. that cater to a specific industry. 

You can buy everyday tools and equipment to rent out to customers in your neighborhood. So, choose the equipment that you are well-informed about as having ample information will help you at every step of the equipment lifecycle. 

  • Target a specific niche

Find a niche within the umbrella of the equipment rental business that you either have some knowledge of or have experience in. This will give you a competitive advantage from the get-go. 

Some of the popular niches in equipment rental are: 

  • Construction equipment 
  • Heavy equipment 
  • Tools and small equipment 
  • Machinery equipment 
  • Road equipment 
  • Dumpster rental equipment
  • Lawn and garden equipment
  • Carpentry or metalwork equipment 
  • Determine the demand 

The next step is to research the demand in the market you are targeting. Make sure that you choose the right equipment rental business that has ample demand. For instance, if you are in a small city or town, you can offer a one-stop-shop rental solution. 

Get everything under your roof, buy equipment that is used regularly, and sign an agreement with other vendors for low-utilization equipment. If your city or town is rebuilding its infrastructure, you can primarily, offer construction equipment. Research what is in demand and stays in demand for a good chunk of the year. 

  • Identify gaps and opportunities 

Once you know what equipment you will be renting out, find your competitors. Research them. Find out any business gaps that you can fill in. For instance, their business may not have specific high-utilization equipment, or maybe it is always rented out. Find these gaps and fill them in. As the saying goes, if you can’t beat them, join them. 

So, find partnership opportunities with competitors. If they have a high-revenue customer that they can’t fulfill the demand for, step in and become their vendor. There are always multiple opportunities that can be utilized to stand out from the competition. Find them and use them to your advantage. 

Equipment rental industry terms and metrics

Equipment rental industry terms and metrics 

Every industry has its unique jargon which has evolved over time to be commonly used and understood by those belonging to that industry in the equipment rental industry, this jargon has officially been listed by the American Rental Association (ARA) to keep the industry standardized. 

Here are a few terms and metrics you need to be aware of: 

  • Original Equipment Cost (OEC)

OEC measures the size of a rental fleet expressed in a base currency. Consistent with the concept of gross book value under U.S. GAAP, it represents the undepreciated cost of acquiring a piece of equipment.

  • For assets bought off lease, OEC represents the cost paid to buy out the lease 
  • OEC includes the cost of any refurbishments that can be capitalized under U.S. GAAP
  • Time (Physical) Utilization (TU) 

TU is the time an equipment unit is rented divided by the total time available. Fleet-wide TU is weighted by OEC and is a measure of fleet efficiency expressed as a percentage of the time the fleet is on rent.

  • TU per equipment unit = (OEC on rent during the period)/(Total OEC for the period)
  • Financial Utilization ($U)

$U is a function of annualized rental revenue exclusive of ancillary fees weighted by OEC. 

  • $U is calculated by dividing ‘pure’ rental revenue by the average OEC 
  •  ‘Pure’ rental revenue excludes ancillary fees such as environmental fees, damage waivers, delivery charges and re-rent revenue
  • Fleet Age (Age)

Age is the OEC-weighted average age (expressed in months) of the equipment in the fleet.

  • The in-service date is used to calculate fleet age 
  • No adjustments for refurbishments
  • Change in Rental Rate (%RR) 

The period-over-period change in rental rates measures the change in average contract rental rates. Rates vary depending on contract type (daily, weekly, or monthly) and the equipment rented. 

  • When reporting period-over-period rental rate changes, rental companies measure the average change in contract rental rates weighted by the prior period revenue mix

(These terms have been taken directly from the ARA Rental Market Metrics ) 

Research your market and locality

2. Research your market and locality 

Conducting a detailed analysis of your target market and locality will give you meaningful insights that will help you make informed decisions about your equipment rental business. Analyze and understand the competition to effectively offer better rentals to your customers. 

Do an in-depth analysis

This is where pen and paper or a digital notetaking app will help you. Write down everything your competitors are offering, learn how they offer it, what prices they have, and how they’re able to retain their customers. These small details will significantly help you in the long run. 

Take these steps to set up Northstar for your equipment rental business: 

  • Conduct thorough market research

In in-depth market research, try to find your competitors locally, county-wide, and in your state. The wider your scope of research, the more insights you will get. Keep in mind that if you’re starting a heavy equipment rental business, you may have to shorten the radius since logistics will be an important financial aspect to consider. However, you can bypass that by offering delivery and pickups as an additional service. 

  • Analyze pricing strategies

The next step will be to check the average pricing for the equipment you are planning to rent out. The price may vary depending on factors like availability, time of the year, weather conditions, etc. For instance, the weather-specific equipment will be priced differently during high-utilization and low-utilization months. Consider all factors before finalizing the pricing for your equipment. 

  • Figure out your USP 

The unique selling point (USP) of your business will be the decisive factor for customers to come to you rather than your competitors. So, stand out among the competition with a meaningful USP. For instance, you can offer to rent during days when all other competitors are closed. You can add extra services such as logistics, on-the-spot maintenance of your equipment, etc. Find something that solves crucial challenges your customer base is facing. 

Plan your equipment rental business

3. Plan your equipment rental business 

The next phase in starting your construction rental equipment business is to plan it in detail. Take the initial concepts to the next stage. Define a future-proof business plan, estimate and set budgets, and keep all financial aspects in mind. 

Chalk out a future-proof business plan 

If you want to future-proof your business, you start with a roadmap that accounts for all factors that may affect your operations. You will have to define a proper business plan including deep dives into operations, finances, and marketing. 

Here’s what to do: 

  • Detail the business plan

Outline a business model that covers all aspects of your operational workflows. Understand how your business will operate, which equipment rental software to use, what a single workday will look like, etc. From day-to-day operations to monthly reporting, and from quarterly projections to yearly goals – write down everything. 

  • Define business goals for your target market

Once you have your unique value proposition in place, you will have a clear picture of what your business goals should be. Consider your target market. If you’re targeting construction equipment rentals, what value will your rental business provide to construction companies?

 If you are starting a small equipment rental business, why should your community come to you instead of buying their own? Have clear goals regarding what you want to achieve, and highlight the value you’ll add for your customers.

  • Outline marketing strategy 

Once your business plan is ready, you will then have to figure out how you will market it to your customer base. Define a few ideal customer profiles (ICPs) that will help you provide more value to individual customers. For instance, if you are a small equipment rental business, one of your ICPs may be a hobbyist who enjoys making wood furniture as a side gig. Define your ICPs and market your business around them. 

Set a budget for your equipment rental business

Set a budget for your equipment rental business 

Once you’re done with the business plan, move on to budgeting your rental business. This will help you forecast all kinds of financials you need to be aware of. A robust financial plan will include equipment, startup, leasing, permits, insurance, logistics, marketing, and operational costs. 

These tips will help you create a solid financial plan: 

  • Calculate all initial business costs 

Anticipate and note down every kind of cost that you will have to bear from the start of your rental business to when it’s operational. If there’s anything you think will have a price attached to it, note it down. It is always better to be prepared. 

  • Identify operational costs 

It is important to be aware of all costs associated with running your equipment rental business. Depending on the type of equipment you offer, you will have to consider the cost of regular maintenance, servicing, repairs, and even breakdowns. Have a strategy in place to recover damages easily. Include costs for rental software, staffing, overheads, and marketing in operations as well. 

  • Set revenue targets 

Once you have decided on the rental prices for your equipment, it will be easier for you to forecast your regular expected cash flow. Set revenue targets for every quarter and plan your business strategies accordingly. It is easier to set a revenue target first and then try to achieve it rather than jumping in and hoping for the best. Revenue targets will help you align your marketing and rental strategies. 

  • Review quarterly and align 

Consider the first year of your rental business as a trial period. You will be testing out various strategies to find the one that works for you. Schedule weekly, monthly, and quarterly reviews to nudge your business in the right direction. This is crucial. 

Highlight what is working for you, what can be improved, and what needs to be eliminated. If you’re using holistic rental software , it will highlight which equipment is performing well and which has low utilization. You can add and subtract equipment to your rental assets to retain and increase revenue every quarter. 

Financial aspects to keep in mind 

For an equipment rental business, there are a few key financial aspects that you need to consider. These can easily make or break your business. Think them through properly, and come up with a strategy customized for your rental business and your customers. 

Here are the crucial financial metrics to consider: 

  • Rental rates

You can set your own rental rates for your equipment depending on the market, locality, demand, and customers. The rental rate for one specific piece of equipment will also vary depending on its type, the time of year, and the condition of the equipment. Generally, all equipment rental businesses offer a daily, weekly, and monthly rate. As a rule of thumb, the longer your equipment is rented, the higher the profit will be, even if the daily rate for that period is lower than the average daily rate. This is because you will have fewer costs added to it like maintenance, downtime, and delivery and pickup. 

  • Utilization 

Keep in mind that equipment with high utilization will always yield a higher profit. But to cater to this high demand, you have to add more rental equipment to fulfill the demand. You can very easily lose business to a competitor if your high-utilization equipment is frequently unavailable due to being rented out or maintenance. Your competitors will happily jump in to fill this gap for your customers. 

  • Seasonality 

Depending on where your business is located in the States, you have to consider seasons as a factor that will affect your rental business. The summer months are usually busier and the winter months are slower. You can add a wide range of equipment to cover both seasons. For instance, you can offer construction equipment during the summer and winter equipment during the snowy months. 

How to buy the right equipment for your business 

4. How to buy the right equipment for your business 

When buying equipment for your rental business, ensure that you get the best deal. The condition and durability of your equipment will determine how successful your rental business will be. Buy, lease, and get what your customers need. 

Think through the equipment purchases 

There can be multiple ways you can populate the assets and inventory of your equipment rental business. You should always get the best bargain via payment options that suit your needs and budget. 

Here’s what to look for: 

  • Choose to lease or buy the equipment 

If you have enough capital to buy all the necessary equipment at the beginning of your business journey, go ahead and buy it all. If not, you can segment your equipment purchases into high-utilization and low-utilization, and buy the former first and buy the latter down the line. If you’re low on capital, leasing can be a great option to minimize startup costs. You won’t have to dip into too much capital upfront. 

  • Find out the value of individual pieces of equipment 

Evaluate every single piece of equipment to assess its utilization level and profit margin. This way you’ll be able to get the right tools that get you the revenue you want to achieve your fiscal targets. Keep in mind that high-value equipment usually has regular high maintenance costs as well. If you’re only starting out, you can avoid the high-value equipment for the initial 3 to 6 months. As your business grows, you can buy those as well. 

  • Buy the equipment your customers need 

Another best practice is to customize your equipment purchases to cater to the needs of your customers. Rather than buying the equipment you want, you can buy the equipment your customers need. That way, you will ensure regular bookings and rentals for your assets. 

Get the best possible deals 

Let your bargaining prowess shine through when you go out to buy the equipment you want for your business. It’s a simple game of getting the best deal possible after searching for what’s available in the market and for how much. 

Here are a few tips that will help you get the right equipment: 

  • Get rates locally and online 

Although the same piece of equipment may be available at different prices in different States, you should always be aware of the price differences. First, go out into your local market, browse through the vendors, and compare prices there. Then, tally these prices with online stores even if they’re not from your own State. 

This will set a good baseline price for you. When comparing prices, include shipping costs, wherever applicable, in the overall price. Logistically, heavier equipment will be cheaper to buy locally, but you may get a better deal online for small equipment. 

  • View warranties and reviews beforehand 

To make an informed decision when purchasing equipment, make sure you compare not only the prices but also the warranties offered. If you are buying equipment you personally have not used before, it is better to read customer reviews in depth, especially for high-value equipment. Chances are that a similar piece of equipment from two different manufacturers may have different longevity and durability. Also, dive deep into the troubleshooting forums of high-value equipment to find out if customers have faced a similar maintenance issue with certain equipment. It’s good to know all this before making a bad investment. 

  • Buy in bulk or ask for further discounts 

Lastly, if you are purchasing more than one piece, buy it in bulk as it will reduce the overall cost. Find wholesalers who may be able to get you a better deal. Even if you are buying from a retailer, don’t shy away from asking for a further discount. Build good vendor relationships from the start. Let your vendors know you are here for the long run. It will help in creating a lasting customer relationship with them. 

Increase the lifecycle of your equipment

Increase the lifecycle of your equipment 

Once you have bought the equipment you need for your rental business, the next step is to ensure that you increase their lifetime value. Your equipment will be your bread and butter, so make sure you maintain, service, and repair regularly. Well-maintained equipment will have zero to low downtime since it will keep on running like a well-oiled engine. 

Follow these tips to ensure longer equipment lifecycles: 

  • Schedule and perform regular maintenance and inspections 

Great rental software will help you create regular maintenance checkups for your equipment. You can also schedule inspections to check if there is any problem that needs fixing. For heavy construction equipment, you will have to change oil, filters, etc. Maintain a way to schedule these regularly. A best practice is to fix a timeline or use the odometer readings. For instance, you can plan maintenance after every 100 hours or every 100 miles. 

  • Track and analyze maintenance, servicing, and repairs 

Keep track of all your maintenance, servicing, and repairs to quickly assess the health of your equipment. Vehicles and construction equipment that have been cleaned, maintained, serviced, and repaired on time will always have a higher probability of being rented out frequently. Analyze your maintenance, schedule accordingly, and minimize your costs. 

  • Provide necessary guidelines or train customers 

Most equipment breakdown happens when the equipment is not handled properly. To ensure that this doesn’t happen, provide guidelines to your customers on how to correctly operate and use the equipment. If your customer is a first-timer, you can offer to train them on the equipment, for free or with an additional charge. Always be available for support in case an experienced customer faces a mechanical breakdown while using your equipment. 

The best equipment to rent

The best equipment to rent 

To get an idea of which equipment you should buy for your equipment rental business, you can browse this list. These items are utilized regularly and are rented frequently:  

  • Regular and mini excavators for excavator rental business
  • Skid steers
  • Wheel loaders
  • Graders 
  • Bulldozers 
  • Track loaders 
  • Multi-terrain loaders 
  • Wheel excavators 
  • Trailers 
  • DIY and everyday tools for small equipment rental business 
  • Equipment for machine rental business 
  • Lawn and garden tools 

5. Prep your equipment rental business for the web  

After purchasing the right equipment for your business, you have to find the right channels to market it. If your target market is local, you can print out flyers and put up a billboard in a strategic location. Apart from this, you can leverage the power of the internet to increase your outreach. 

How to rent out equipment online 

You can use rental software to manage your rentals online. You can also create a website and webstore to redirect your customers to your online portal. Since the rental software is a turnkey solution, you’ll be able to kickstart your rental business from day one. 

Here are a few steps you can take to highlight your online presence: 

  • Create a professional website and webstore 

Start with a professional website for your equipment rental business. Research the available options as some rental software comes packed with the ability to create a website or a webstore directly. You can populate your equipment assets onto the webstore so your customers can book rentals online. An online webstore will take your business to the next level by allowing your customers to check availability and rent instantly. You won’t have to worry about the time and costs involved in booking orders on a one-on-one call. 

  • Integrate industry keywords and SEO 

Research your industry and competitors, and find out what your customers are searching for on all popular search engines. Once you have a list of keywords they are using, you can incorporate them into your website to achieve higher discoverability. The more eyeballs you get on your business website, the more customers you may be able to do business with. 

  • Leverage social media to build trust 

In this time and age when everyone is present on social media, leverage it for your business. Be present where your customers are, and engage with them frequently. Resolve their issues there, inform them of discounts, attract them to your business, and build long-lasting relationships.  

Build your team

Build your team 

For a business to successfully grow, you need to hire a team of specialized professionals who can help you in different aspects of your rental business. To reduce costs at the start, you can be a one-person-army and handle everything yourself. But if you want to grow, you will have to build a team. 

These tips will be useful in building a dream team: 

  • Identify critical roles 

Find out what the critical roles are for your equipment rental business. You may not need the conventional roles a regular company has, or you may have the margin to merge two similar roles into one. Plan your business team accordingly. Whatever you can do quickly, do it yourself, whatever else remains, delegate it. You can take ownership of sensitive business roles and hire professionals for all other tasks. This is where powerful rental software will act as another member of your team by automating a high number of your rental workflows. 

  • Empower your team with knowledge 

A great business owner takes a leadership role and enables their team to take ownership of their individual departments. Take time out to train your employees with the right tools and knowledge so they can handle everything on their own rather than escalating every minor issue to you. Train them on the rental software as well or get the help of the rental software company to get your employees onboarded quickly. 

6. Consider legal aspects from every perspective  

There are certain legal considerations you need to be aware of for your equipment rental business. Safeguard your business by getting relevant guidance online and from related authorities. You will have to get permits, licenses, insurance, etc. before you can actually start your business. Research online, visit helpdesks of relevant government agencies or get insights from similar businesses in your area. 

Create robust procedures 

To streamline your rental operations and ensure consistency in the quality of your business, get proper and robust procedures in place. Fill the gaps and cover all contingencies by creating a process for every rental business workflow. 

Here are a few guiding points to help you get started: 

  • Write down comprehensive rental agreements, contracts, and policies 

Have proper rental agreements and contracts on your rentals. In all of your customer-business interactions before, during, and after renting out, get an agreement document signed. Write clauses in that agreement or contract to cover all your bases. If it is high-value equipment, you can get pre-booking agreements signed by your customers as well. Jot down comprehensive agreements that help your customer understand how and what action needs to be taken in case of a contingency. 

  • Detailed inventory management 

Manage your rental assets efficiently via rental software to always know where every piece of equipment is and for how long. Your inventory management will ensure that you get the best ROI on every piece of equipment available at your rental business. 

  • Streamlined logistics, pickups, and deliveries 

If you are planning on offering delivery and pickup services to your customers, you can charge them for this service. If you want them to manage this on their own, make sure that you have a few logistics companies at your disposal to offer to them. Build trust with logistics and ensure peace of mind knowing your equipment won’t be damaged during transportation. 

  • Establish maintenance and servicing protocols 

Have proper protocols in place for checking in and out of your rental equipment. Ensure that regular cleaning, maintenance, servicing, and repair protocols are followed. The time you spend in creating these protocols will save you time and money you won’t spend on breakdowns and equipment downtime. 

Power up with rental software

  • Power up with rental software 

Get equipment rental software to automate your workflows. A holistic software will include every workflow your rental business needs. These crucial workflows are order management, customer management, bookings, tracking, invoice management, recurring orders, sub-renting, documentation, analysis, custom reports, customer portal, rental webstore, and much more. Go with rental software that helps you automate as many of your workflows as possible. 

7. Launch your equipment rental business 

Finally, when you have taken all the necessary steps, get ready to launch your equipment rental business. Market it to your customers through the right channels, book orders, and let the equipment rental business begin. 

Happy renting!

What construction equipment is rented out the most?

Some of the most rented-out pieces of equipment in construction rentals are: Excavators and mini-excavators Bulldozers Forklifts and scissor lifts Dump trucks Backhoes Skid Steers Wheel loaders Trailers Bucket truck, and more These are some of the construction equipment that have the highest profit margins. All of these have high utilization as well which means that each unit may frequently be unavailable for rent unless you have a larger fleet.

How profitable is an equipment rental business?

The type of assets you have for rent will determine the profitability of your equipment rental business. If you have a fleet of high-value construction equipment, expect high-profit margins. If you are primarily renting out tools and equipment for everyday DIY projects, the profit margin will be low. You can either mix and match your range of equipment to cater to every kind of customer or you can target a specific niche in your local market that has zero to low competition.

What is the most profitable construction machinery?

The most profitable construction machinery to rent out is wheel loaders. These come in various sizes for maximum flexibility. They can be transported with ease and the medium to small ones can be driven directly to a job (if the traffic laws allow it). This piece of equipment has a high profit margin as well with reasonable servicing costs.

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

Blog Author

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

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 t oday!

Get Started With Quipli’s Construction Rental Equipment Software Today

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About the author

Kyle Clements

Kyle Clements is the Founder & CEO of Quipli, a provider of modern software for independent equipment rental companies. Kyle has a decade of software startup experience and has been part of several successful ventures that have become publicly traded or been privately acquired, such as Uber and Clutch Technologies. In the past few years, Kyle has completed thousands of customer interviews understanding needs and trends in the growing equipment rental market. Kyle brings a unique perspective to the equipment rental industry and is passionate about partnering with independent equipment rental companies to run their operations more effectively and assist them in creating an impactful experience for their customers.

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Construction Equipment Rental Business Plan [Sample Template]

By: Author Tony Martins Ajaero

Home » Business ideas » Service Industry » Equipment Rental & Leasing Business

Equipment Leasing Business

Are you about starting an equipment rental company? If YES, here is a complete sample construction equipment rental business plan template & feasibility report you can use for FREE .

Okay, so we have considered all the requirements for starting a construction equipment rental business. We also took it further by analyzing and drafting a sample construction equipment rental marketing plan template backed up by actionable guerrilla marketing ideas for heavy equipment rental businesses. So let’s proceed to the business planning section.

According to a facts report from the Equipment Leasing Association of America, close to 80% of businesses in the country rented or leased equipment on a daily basis, thereby making the business very lucrative for anyone intending to start the business.

The reason why many businesses are renting equipment is due to the fact that they do not consider it necessary or worthwhile to purchase heavy equipment for use either due to budget constraints or the fact that buying the equipment would be a waste of resources as regards to leasing it.

Due to the fact that this is a capital intensive business, you would need the input of an expert who is knowledgeable in the industry and who would carry out an analysis on your company in relation to your location to help you determine if going into the business would be a wise decision.

If the odds are for you, the consultant would then help draft strategies that would help make your business have an edge over others that you might likely be competing with in the same location or even industry. Asides from getting a business consultant to help you determine if going into the business is worthwhile, writing a business plan is another task you would need to undertake.

Below is a sample of an equipment rental business template that should guide you towards writing your own business plan for your equipment rental business;

A Sample Construction Equipment Rental Business Plan Template

1. industry overview.

The equipment rental industry according to IBIS World has several downstream businesses or industries that are its customers such as railcars, aircrafts, ships and drilling machineries.

The revenue from this industry amounts to $38 billion and the projected growth from 2011 to 2015 for this industry was pegged at 4.8%. There are more than 18,000 equipment rental businesses in the united states of America employing more than 78,000 people.

The last economic recession caused a slide in the industry’s revenue as few companies rented equipment during this period. However, according to statistics, the downstream sector will strongly drive the industry from 2016 to 2022.  Also, it is stated that construction and transportation industries will benefit from this strong projection in the next five years.

The equipment rental industry especially the heavy equipment is heavily fragmented as the four largest players in the industry, according to the industry’s 2016 revenue, account for close to 20.2%; other players in the industry operated in specialist markets or in disperse geographical locations.

However, as activities have dropped in the construction and transportation industries, it has caused many small players to exit the industry.

As at 2014, the construction equipment rental market globally was valued at over $4 billion and has been anticipated to go over $84 billion by 2022. This is due to the fact that construction activities were on the increase globally, especially as governments were investing in emerging economies.

The rental market for material handling has been anticipated to grow at 13% from 2015 to 2022 due to the fact that focus has been increased on automated production processes so as to efficiently use raw materials, resources and energy.

Demand for advanced machinery with eco-friendly as well as low maintenance features has continually grown and is likely to surge past demand for conventional equipment in the coming years. Also, another thing that responsible for a high adoption of rental products is the fact that consumers now have high purchasing power with a higher preference for rentals.

As at 2014, the earthmoving rental machinery market was valued at over $19 billion and was expected to see a significant growth of more than 12% by 2022. This is due to the fact that emerging economies have increased the demand for heavy equipment.

The equipment rental industry is very capital in nature and businesses in the industry are usually involved in mergers and acquisitions, strategic alliances and joint ventures so as to increase their penetration to their target markets.

2. Executive Summary

Tack Rentals (TR) is a standard and the exclusive go-to equipment rental business based in Atlanta – Georgia, USA and intends to rent its equipment to individuals and businesses. We also intend to sell some of our equipment and also become distributors for some major equipment manufacturing companies all over the United States of America.

Our vision as a company is to be the preferred equipment rental company here in Atlanta and also be amongst the top 10 equipment rental businesses in the United States of America by 2025. To ensure that we achieve the following vision and objectives, we intend to ensure that we build the best business structure.

Our equipment rental business is strategically located at Peachtree Street, NE in Atlanta and provides the required convenience for our various customers in easily locating us to make enquiries, buy or rent from us. Also, our online presence makes it quite easy for those who love shopping online to locate us, not only are we located on top of various search engines, we also respond promptly to any online enquiries.

Our equipment are of high quality and are designed to last for as long as possible, this is because we procure these equipment with our customers in mind, and we would want that the equipment they get from us carry out its tasks efficiently.

Our management team is the best that can be found as we carefully sourced for those who not only had an understanding of the industry, but who also believe in our core values and were willing to work to ensure we reached our attained height.

Our customer care teams are very knowledgeable about the trends in the industry and have been trained to understand the wants of our clients and ensure that it is fulfilled. All complaints are speedily attended to and resolved by our able customer care executives.

We know how important is it to garner promotion for a business and so we have drafted effective publicity strategies that will ensure that the business gets the awareness it deserves here in Atlanta as well as all over the United States of America.

Finally, our Chief Executive Officer, Mr. Rocha Taylor is one who has the necessary expertise to ensure that the business attains its goals and objectives as he has more than 10 years experience in the rentals industry and will therefore bring in some strategies that will ensure we come up tops above our various competitors.

3. Our Products and Services

Tack Rentals (TR) intends to deal in all sorts of services to its various customers in the target market. Our niche makes it very easy for us to be the exclusive equipment rental business here in Atlanta, Georgia.

However, instead of just providing core services to our customers, we intend to add other services to in order to gain more customers while also creating multiple sources of income. Our aim is to make profit as we legally can and as is permissible under the laws of the United States of America. Therefore some of the services and products we intend to offer are;

  • Rentals of heavy equipment such as bulldozers, excavators , trenchers, and backhoes
  • Sale of chainsaws, tillers and augers
  • Distributor for several equipment manufacturing companies
  • Equipment repair
  • Consultancy and advisory services

4. Our Mission and Vision Statement

  • Our vision is to be the exclusive equipment rental business here in Atlanta; and amongst the top 10 equipment rental businesses in United States of America by 2025.
  • In order to achieve our goals and objectives, we intend to create a niche for ourselves in the area where we operate, so as to have little or no competition. We also intend to grow and expand as a company till we are known all over the United States of America

Our Business Structure

Having the right business structure is very important to us as a business, because we know that getting the business structure right will set us on the right path towards attaining success as an organization. It is for this reason that we would sources for and hire only the best employees that will help take our vision from where we are to where we intend to be.

We know how important it is to have the right management team that not only understands the core values of the company but also have the right knowledge and expertise to enable the company achieve its goals and objectives.

We are willing to pay all our employees well and also ensure that they are adequately trained so that they are able to handle the various responsibilities that would be assigned to them through our different sales and products offering. The training would also give them enhanced skills as well as increase their productivity for the overall benefit of the company.  Therefore, below is the business structure we intend to build at Tack Rentals (TR);

Chief Executive Officer

Rentals and Leasing Manager

Human Resources and Admin Manager

Maintenance Manager

Purchasing Manager

Marketing Executives


Customer Executive Officers

Truck Drivers

Security Guard

5. Job Roles and Responsibilities

  • Makes strategic decisions for the company
  • Reviews company’s policies and growth and tweak ineffective strategies
  • Meet with high-powered clients on behalf of the company
  • In charge of all equipment that are rented by customers and ensure its proper documentation
  • Checks the condition of outgoing and incoming equipment
  • Liaises with the purchasing and maintenance managers to ensure that equipment procured is in line with industry trends
  • Sources for and recruits the best employees for the available positions in the company
  • In charge of employee training and welfare
  • Conducts periodical performance appraisals on the employees on behalf of the company
  • Checks the quality of new equipment and machineries
  • Carries out light repairs on faulty equipment on behalf of the organization
  • Works with team to effect repairs on customer’s equipment
  • Sources for reliable vendors and suppliers on behalf of the organization
  • Gets quotes for equipment and makes findings to ensure the company gets the best quote
  • Liaises with the accountant to ensure that the right funds are transferred for the right equipment
  • Conducts an in-depth analysis of the market to determine ways to penetrate the market
  • Carries out one-on-one marketing on behalf of the company
  • Reviews and discards ineffective marketing policies
  • Prepares all accounting and financial information on behalf of Tack Rentals (TR)
  • In charge of channeling funds for the procurement of equipment
  • Prepares tax report for onward submission to tax authorities
  • Possess updated information about the general equipment rental industry as well as Tack Rentals (TR)
  • Attends to customers enquiries and complaints and ensure that they are promptly resolved
  • Keeps and update an accurate customer database on behalf of the organization
  • Ensures that the equipment arrives at its destination on time
  • Inspects the offloading and on-loading of the equipment
  •  Carries out light maintenance on truck
  • Ensure that the premises is secured at all times
  • Checks incoming and outgoing equipment and ensures that all documentation are in order
  • Monitors the surveillance cameras to check if anything is amiss
  • Ensure that the premises are kept clean before and after work hours
  • Clean out the equipment store so as there won’t be buildup of dirt and grease
  • Carry out any other tasks as might be assigned by the Admin Manager

6. SWOT Analysis

The SWOT ( Strength, Weakness, Opportunities and Threats ) analysis is usually a method that is used to evaluate the chances of a business’ survival. It is a necessary tool used to help the business understand and also carry out the best decisions on behalf of the organization.

In conducting a thorough analysis on our chances in the equipment rental business, we hired a reputable business consultant here in Atlanta who understands the business thoroughly and would evaluate our strengths and opportunities and use it to determine if they were worth more than our threats and weaknesses.

Below is the result from the SWOT analysis that was conducted on behalf of Tack Rentals (TR);

We have several strengths in our advantage and one of such is that we have competent employees that know how to handle our customers and also how to anticipate their needs, which is what our customers love most about us. Also, the fact that we can be found online and are actually responsive to enquiries and requests is one of our strengths.

Our brand is widely recognized in Atlanta which has led to more customers for us. Finally, our Chief Executive Officer, Mr. Rocha Taylor, has over 10 years experience in the equipment rental industry which is of a huge benefit to the business.

The fact that many businesses are into equipment rentals is a huge weakness for us as this would mean we would need to intensify efforts to get a good share of the target market that is already saturated. We however have strategies in place that would enable us make a huge impression on the public.

  • Opportunities

The opportunities that abound to us in this industry stem from companies that will be looking to rent our equipment on a long term basis, thereby causing an increase in our revenue. There are also loads of people looking for advices on what equipment is best for use and whether they should rent or buy; these are opportunities we intend to use to our full advantage.

The threats we are likely to experience in this industry are from the arrival of new competitors who might be looking to grab a share of our target market by offering cheaper prices than what we were offering. Also, another threat we are likely to face is in having an economic downturn which will affect the rate customers lend equipment from us.

However, every business knows that it is likely to encounter threats during the start and running of the business and as a serious business we are fully prepared to handle every threat.


  • Market Trends

The equipment rental business is one that has always been in demand and this is due to the fact that even though several individuals and companies require the use of heavy machinery to carry out certain tasks, they do not want to buy or have the means to buy such equipment.

Also, some of the heavy equipment are used few times by the end users and so there is no need to waste money purchasing these equipment only to use them once or a few times, hence the need to rent the equipment from rental companies.

However, any entrepreneur looking to go into this business must ensure that they think up innovative ways at earning money and staying on top of competition.

Equipment rental companies these days do not only rent out equipment, they are also involved in the sales of heavy and light equipment. Others also become distributors of some of this heavy equipment for equipment manufacturing companies.

This is so that they can gain a huge share of the target market, and keep generating revenue that would give them a healthy bottom line.

The use of the internet has made things quite easy for equipment rental companies, as most have built websites that has Search Engine Optimization (SEO) so that they could be amongst the top searches for customers who searched for equipment rental companies online.

There is also the trend of using online directories or paying Google so as to be able to appear in different forums, websites and blogs that register for Google’s Adsense. Asides this, owners of this kind of business always network with manufacturing companies as well as other stakeholders in the industry to help increase awareness about them.

8. Our Target Market

There are all sorts of people who make rent equipment for several purposes; this means that we cannot restrict our customers to a certain group as we have a huge target market to cater to here in Atlanta, Georgia.

Asides from having a large number of potential customers, we are also strategically located here in Atlanta, and have also chosen several other strategic locations in which to create awareness about Tack Rentals (TR). However to help us get a better perspective of our target market, we have carried out a market research that will not only help us understand their demands, but will also help us see what they would be expecting from us.

We therefore are in the equipment rental business to cater to the following group of individuals and industries according to our market research:

  • construction industry
  • agricultural industry
  • Mining Industry
  • Aviation industry
  • Individuals and Businesses dealing In forestry
  • Individuals and Businesses dealing in medical equipment
  •  Waterways
  • And other customers who generally lease heavy and light equipments for various activities

Our competitive advantage

Every business that intends to make profit knows that it is likely to have competitors and so it would be wise for such a business to set out competitive strategies that would ensure that it has an edge over its competitors either in the same location or in the whole industry.

With this, Tack Rentals (TR) has several competitive strategies which it intends to deploy against its competitors in the industry.

Our intention of being amongst the top ten equipment rentals in the United States of America and the only exclusive go-to equipment rental company here in Atlanta, Georgia means that we fully intend to deploy several strategies to ensure that we achieve this objectives, whilst maintaining a healthy bottom line.

Our different equipment are of high quality and so would not give our customers any hitches once they are being rented out. Not only do we stock the best equipment, we also ensure that our equipment are given a thorough inspection before and after use by our highly competent maintenance team.

Our customers would have the option of using our support personnel whenever they lease our equipment, this is so that any hitches that crop up during the use of our equipment would not only be speedily resolved but also recorded accurately for use by the company for future purposes.

Lastly, we offer the best customer care, the type that cannot be found anywhere in other similar start-ups in the industry. Our customer care executives are deeply knowledgeable about trends in the industry and are highly trained to handle our different types of customers no matter their temperaments.


  • Sources of Income

Tack Rentals (TR) is an established company in Atlanta, Georgia whose aim is to offer several services to its customers based within its target location.

We intend to give our customers several niche services that will ensure that they do not have to patronize our competitors, and that will also earn us income from various sources. Therefore, Tack Rentals (TR) will therefore generate income by offering the following services;

  • Rentals of heavy equipment such as bulldozers, excavators, trenchers, and backhoes

10. Sales Forecast

The equipment rental business is such that will always grow especially as most businesses in America cannot go without leasing one or several equipment every day.  Our strategic location in Atlanta – Georgia has made us quite optimistic of generating revenue and making profit from the second year of operation and from which we can then grow and expand our business from there.

We conducted a critical analysis of our chances in the equipment leasing industry based on data and information that was gathered from several similar start-ups in the industry and based on our location as well. It is from this critical analysis that we were able to come up with the sales projections.

Below are the sales projections for Tack Rentals (TR) based on factors such as the location, positive state of the economy and lack of a competitor arriving during the stated period;

  • First Fiscal Year-: $800,000
  • Second Fiscal Year-: $1,600,000
  • Third Fiscal Year-: $3,200,000

N.B: The above sales projections were carried out based on several facts and information from the industry. The above projections are based on the facts that there will be no change in the factors listed above. However, should any change occur either positively or negatively, it is likely to have an impact – increase or decrease – in the projected sales figures.

  • Marketing Strategy and Sales Strategy

Even though the equipment rental business is a lucrative one, there are still several businesses within this industry collapsing and all because they did not carry out adequate marketing. Marketing is the process by which businesses research on and identify their target market so as to be able to draft the necessary strategies that would be effective on the identified target market.

Marketing is the major source by which a business makes its revenue to sustain and eventually expand it. Therefore, we have conducted a thorough marketing research on our target market and have identified several ways we would attract customers to our equipment rentals business.

To aid us in carrying out this market research, we sourced for the services of a reputable marketing consultant who is knowledgeable in this field to help us look over our market research and not only review it but also draft the right strategies that would see us standing out in our marketing campaigns.

Empowered to work with the hired marketing consultant is out marketing team, who understanding our corporate core values and foundation have to ensure that each marketing strategy promotes the company positively to existing and potential customers while also generating the intended revenue for the company.

We do not also intend to dismiss the importance of technology as we intend to incorporate it into our marketing strategies.

We are fully aware of the power of the internet and will deploy all means to ensure that we maintain a strong online presence that will be helpful when marketing our equipment rental business. Therefore, the marketing and sales strategies we intend to adopt for Tack Rentals (TR) are;

  • Ensuring that we introduce our equipment rental business to all our target markets in our location by sending out formal letters that include our rates and a powerful brochure to the management of each companies
  • Ensure that we thoroughly advertise our equipment rental business in local newspapers, magazines as well as on radio and television stations
  • Make use of direct marketing for our equipment rental business
  • Use our official website to market our equipment rental business
  • Use our social media platforms – Facebook, Twitter and LinkedIn – to massively market Tack Rentals
  • Ensure that we are listed on online as well as offline directories

11. Publicity and Advertising Strategy

Publicity and advertising is a very important aspect for any business that intends to play an active role in generating revenue whilst also creating the necessary awareness it needs for its brand. Due to this it is very essential that we carefully draft our publicity strategies that would project our image positively to our customers – existing and potential.

We have also hired a brand strategist who is quite knowledgeable about the industry and knows which strategies would likely be beneficial to us in the short and long run, to help look over our strategies and help to modify or draft new ones that we would implement in ensuring that Tack Rentals (TR) is not only known here in Atlanta but in other surrounding cities as well.

Therefore the platforms we intend to use in promoting and advertising Tack Rentals (TR) to our various customers are;

  • Ensuring that we pay for Google Ads to help advertise our business on all web pages, forums and blogs that is guaranteed to give us the maximum exposure
  • To sponsor relevant school programs that is related to equipment in our local community
  • To place adverts in local newspapers, magazines as well as on radio and television stations
  • To use the social media platforms, such as Facebook, Twitter and LinkedIn to massively educate people about the advantages of patronizing Tack Rentals (TR) as well promoting us as well
  • To ensure that our billboards are strategically and conspicuously located all around Atlanta, Georgia
  • To ensure that we distribute our handbills and paste our fliers in strategic locations

12. Our Pricing Strategy

We know how important pricing is to a company and so we intend to take our pricing strategy very seriously when it comes to setting the rates and prices for our customers.

We would give our customers an affordable price or rates for our equipment, and will ensure that the price given fetches us a good margin that will cover not only our overhead but our running costs as well. However, in order to attract customers to our business and make them loyal to us, we intend to reduce our rates during the first few months (3 months) of business.

The rates would not however be lowered to the point that they affect our business negatively, we would only be running on low margins. We would however raise our prices later so as to conform to what is obtainable in the rental industry.

  • Payment Options

The days where there were only one or two ways by which customers could pay for services or a product is long gone as there are several available platforms available to suit the different needs of the customers. At Tack Rentals (TR), we are a business that understands that our customers might have different preferences and so we have different payment options available.

Therefore, the payment options we intend to offer all our various customers are;

  • Payment via cash
  • Payment via check
  • Payment via bank draft
  • Payment via Credit Card
  • Payment via Point of Sale (POS) Machine
  • Payment via online payment portal

The above payment options were carefully chosen by our bank and we have been assured that they will offer our customers no problems during transactions.

13. Startup Expenditure (Budget)

The equipment rental business is a capital intensive business especially if one intends to set up a business that is of a certain standard.

In generating start-up capital for our equipment rental business, it should be noted that the bulk of the capital would go into purchasing these heavy equipment, while the other heavy spending will be on paying employee salaries and bills. Therefore the key areas where we intend to spend our start-up capital on are;

  • Total fee for registering the business in the United States of America – $750
  • Obtaining of licenses, permits and accounting software as well as other legalities – $3,250
  • Cost of hiring business consultant – $5,000
  • Insurance coverage (general liability, asset insurance, workers’ compensation) – $3,000
  • Cost of purchasing several equipment for business start-up – $600,000
  • Operational cost for the first 6 months (employee salaries and utility payments) – $200,000
  • Cost of leasing and renovating a facility for use for at least 1 year – $100,000
  • Marketing expenses (grand opening party promotion and general marketing) – $10,000
  • Other start-up expenses (furniture, stationeries, computers, printers, and phones) – $9,000
  • Cost of store equipment (security, and ventilation) – $3,000
  • Cost of purchasing two heavy duty transport trucks – $155,000
  • Cost of launching a website – $1,000
  • Cost of throwing a launching party – $5,000
  • Miscellaneous – $10,000

From the above analysis, we would need the sum of $1,100,000 in order to not only start but successfully run our equipment rental business here in Atlanta, Georgia. It should be noted that the bulk of the capital will go into buying the heavy equipment that would be rented out to various customers as well as payment employee salaries and lease and furnish the facility we intend to use for our business.

Generating Funding / Startup Capital for Tack Rental Business

Tack Rentals (TR) is owned by businessman Mr. Rocha Taylor, who has over 10 years experience in the industry. In seeking for funds to start this business, Mr. Rocha intends to source for funds from different sources including the bank and external investors, so that his business can start off successfully. Therefore the areas where he intends to generate start-up capital for Tack Rentals (TR) are;

  • Generate part capital from sale of personal stock and properties
  • Approach the bank for a loan
  • Approach a private investor for a loan in exchange for part equity

N.B: Mr. Rocha Taylor was able to generate $100,000 from the sale of personal stock and properties. The bank in which Mr. Rocha Taylor approached for a loan of $500,000 has given approval after verifying his documents. The loan from the bank will be repayable in 7 years with a 3% interest rate.

Mr. Taylor has additionally approached a private investor for the sum of $500,000 in return for 3% equity; the deal is nearly being done as both parties are waiting for the lawyers to fine-tune the agreement.

14. Sustainability and Expansion Strategy

A business that has no sustainability and expansion strategies has no future, and so because we have established our business not only to make profit but have a future as well, we intend to ensure that we implement our sustainability – employee competence, customers’ loyalty – and expansion – reinvestment – strategies to our advantage.

One first aim of sustaining our business is to ensure that we employ those who are very competent and have a good understanding of how to run the business. In a bid to ensure that the business runs smoothly, we intend to pay our employees well exactly what is obtainable in the industry for start-ups such as ours, and ensure we provide them with a great welfare package.

We intend to share our profits with our management team especially those who have shown a great commitment and zeal for at least a 3 year period; and we also intend to provide incentives by promoting lower end staff after conducting periodical performance appraisals.

Retaining our customers is such a big deal for us and we intend to ensure we deploy all the strategies that will make our customers stick to us.

We intend to offer them excellent customer care, by always listening and attending promptly to their complaints and also responding to whatever enquiries they might have. We will also reward loyal customers by providing discounts every now.

Having a healthy bottom line is important and so we would ensure that we re-invest part of our profit back into the company so that we do not need to source for external sources to fund our company all the time. We believe that once we apply these strategies, we would be able to not only sustain but also expand our equipment rental business as well.

Check List / Milestone

  • Business Name Availability Check: Completed
  • Business Registration: Completed
  • Opening of Corporate Bank Accounts: Completed
  • Securing Point of Sales (POS) Machines: Completed
  • Opening Mobile Money Accounts: Completed
  • Opening Online Payment Platforms: Completed
  • Application and Obtaining Tax Payer’s ID: In Progress
  • Application for business license and permit: Completed
  • Purchase of Insurance for the Business: Completed
  • Conducting feasibility studies: Completed
  • Generating capital from family members: Completed
  • Applications for Loan from the bank: In Progress
  • Writing of Business Plan: Completed
  • Drafting of Employee’s Handbook: Completed
  • Drafting of Contract Documents and other relevant Legal Documents: In Progress
  • Design of The Company’s Logo: Completed
  • Graphic Designs and Printing of Packaging Marketing / Promotional Materials: In Progress
  • Recruitment of employees: In Progress
  • Creating Official Website for the Company: In Progress
  • Creating Awareness for the business both online and around the community: In Progress
  • Health and Safety and Fire Safety Arrangement (License): Secured
  • Opening party / launching party planning: In Progress
  • Establishing business relationship with vendors – wholesale suppliers / merchants: In Progress
  • Purchase of trucks: Completed

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  • Business Plans Handbook
  • Business Plans - Volume 01
  • Equipment Rental Business Plan

Equipment Rental

Equipment Rental 645



777 W. Langley Ave. Bradenton, Florida 89201

February 1992

Rich Rentals is an equipment rental business providing a wide variety of tools and machinery for the Do-it-Yourselfer. This family-owned venture seeks to provide a competitive service to its customers and secure a long-term financial opportunity and livelihood in which the entire family can participate .



Market potential and competition.





Promotional, organizational, financial projections.

Since 1988, our business has suffered from cash constraints. We have used the services of University of Southern Florida's Business Analyst Program, Small Business Development Center, and our accountant to analyze the problem. Our large number of assets and varied services have made our situation difficult to analyze. However, we now know the basis for our cash shortages, and they are as follows:

  • The addition of small gas engine repair to our services.
  • Increase in our labor force to accomplish the above.
  • Financing the needed small gas engine parts inventory through existing cash flow and accounts payable.
  • The age of some key rental equipment.
  • Our low equity position.

This plan specifically addresses several methods that we will use to correct the cash flow, profitability, and equity deficiencies.

We have already initiated several changes that have had positive results. The future changes fall into two categories: Management and Financial. When these changes have all been implemented, the company will be within industry norms in two years, as will be shown later in the plan.

Business Objectives

In the summer of 1983, my wife and I began discussing the possibility of relocating to Bradenton, Florida and starting a family business. We were attracted to Bradenton because of its proximity to family, the lifestyle, and the ability to raise our children in a more controlled environment. After months of discussion, market studies, and reviewing several different potential business opportunities, we decided on the equipment rental business. The equipment being rented by the existing equipment rental business was in very poor condition and they had recently filed Chapter 11 Bankruptcy. We spent time evaluating their particular circumstances and determined that their failure was primarily related to overextension financially, brought on by the tremendous drop in oil prices significantly hurting this area, as well as an absentee owner.

The salient points in our consideration were as follows:

  • To provide our family with long-term financial opportunity and to provide an adequate standard of living.
  • To have a business where competition could and would be limited.
  • Long term, we wanted a business that was in a growth industry with greater opportunities for the entire area.
  • To open a family-owned business in which our children would later have the opportunity to participate and learn just how important small business is to the future of our country.

The equipment rental business met all of our needs.

Our primary product/service mix is:

  • We must FIRST provide equipment that is in good working condition.
  • We must provide the equipment when it is needed.
  • When necessary we will provide our equipment at a competitive price, BUT ALWAYS at a profit.
  • We provide complete written "HOW TO" information on all of our equipment and detailed verbal or visual explanations when needed.
  • We provide pickup and delivery for a fee.
  • Last but far from least, when our customers have a problem, we go to them. The completion of their job becomes our No. 1 priority.


We also provide, for sale or rent, most accessories needed to use our tools and equipment.

We provide "damage waiver" to create a worry-free environment for our customers and ourselves by charging a ten percent mandatory fee. This has been very successful in our operation.

  • We are a Ryder Truck Rental Agent. In that capacity, we are able to provide consumers with a complete range of moving needs, from trucks to dollies of all kinds, pads, trailers, towing equipment, boxes, and related supplies.
  • We are a Kubota Consumer Products Dealer with the ability to sell parts for the complete Kubota Tractor line. The bulk of our profit and sales is directly related to Bilt Contract Co. and the mines in our area.
  • We are a Western Union Agent with the capability to send and receive money, mailgrams, and telegrams. They provide an IBM Computer which we also use to run the business.
  • In addition we are a Briggs & Stratton Service Dealer. However, we have decided as of March 1, 1993 we will no longer provide small engine repair service to walk-in trade. We will limit this end of our business to the more lucrative commercial trade which will also reduce our manpower requirements and make it easier to schedule the work around our needs. We will no longer allow outside repair work to conflict with the needs of our rental business.

Rich Rentals has been in business now for almost eight years and we have maintained detailed financial information since the beginning. Our projections for 1992 are included in this business plan and are based on historical data, and augmented with the latest charges that are outlined in this plan. In addition we have maintained records of most requests for equipment that we were unable to fill for whatever reason, and thereby have an accurate estimation of demand.

When we opened our business in 1984, unemployment in Bradenton was at one of its highest levels and the mines were doing poorly. Because of this, we and experts from Quick Rentals performed detailed market analysis prior to making our final decision. Quick Rentals provided regional and community market and site location analysis and start-up aid. Bob Shafer who owned Quick Rentals, and his family had extensive experience in this industry, having opened over 150 stores through Quick Rentals. The potential for success was here especially with the Bilk Contract Co. construction just beginning. In addition, the size of the community and our knowledge of the existing rental store indicated that we could soon be the only equipment rental business in Bradenton. Since 1988 we have been the only rental equipment business in this market area.

We know the current market potential for Bradenton is only partially reflected in our historically-based financial projections. Certain rental equipment additions and planned construction for 1992-1993 will enhance our revenues for the near future. Further information on the local economy, including recent newspaper articles are available upon request.


Revenues are up substantially: (Balance Sheets and income statements outlining this have been prepared and are available upon request.)

  • Rental is up $8,059.00 or 4 percent before implementation of Damage Waiver.
  • Rental & Sales Combined are up $34,274.00 or 13 percent.
  • Gross Profit is up $32,363.00 or 17 percent.
  • Total Income is up $29,307.00 or 13 percent.
  • Rental Revenue/Equipment Cost is up from .95 to 1.06
  • Rental Revenue/Net Rental Equipment is up from 1.39 to 1.69 or an 18 percent improvement.

These improvements reflect our rate increases beginning in October 1990, which made up for no real rate increase since 1987. As a result our return on equipment investment in Bradenton has improved substantially. THE POTENTIAL IS HERE.

Expenses went up as well: Wages paid to employees were up $13,952.00 or 33 percent and equipment repair costs were up $14,610.00 or 72 percent. Wages were up because, we increased our labor force by one full-time individual in early 1991. Prior to that we had added a third full-time person in 1988. This was to provide the necessary personnel required for the additional repair volume created by adding the Kubota and Briggs & Stratton line. Due to the nature of our business our efficiency per man hour decreased proportionally making the addition of outside service work not profitable. This fact had escaped our analysis because all of our personnel shared responsibilities and duties. Service was also the only area where we encountered substantial competition.

The results of adding manpower are clear. We slightly increased our profit from "LABOR AND DELIVER" plus "NET SALES INCOME" by $559.00 over 1991. However, when you subtract the increase in total wages paid over previous years, you can see all we did was create a deficit of http://$13,393.

In addition our increase in "Equipment Repair Expenses" are two-fold in nature. First, because of the manner of accounting (non-cost), we are unable to track all items to the proper department. Therefore, the shown expense account is higher than it should be, by about $3,218.00 or 47 percent over 1990. Much of this expense is related to customer repair work and not rental maintenance. Secondly, we have had excessive repair costs on some of our large equipment (Skid Steer Loader, Trencher/Backhoe, Tractor, and one Compressor) of approximately $6,952.00. The current management goals will reduce and contain these costs.

In 1991 we could have shown additional income of about $8,459.26. This was a paper loss on a John Deere Tractor and a Kubota Riding Lawn Mower that were sold primarily because they were beginning to cost us a lot more in repairs than they could possibly earn. This adjustment should be noted when comparing 1991 to previous years. This comparison indicates an improvement in our revenue over previous years related to the addition of Damage Waiver and our aggressive rate increases beginning in 1990.

Even before the end of 1991 it became apparent that several changes were still needed to improve our financial situation. Our analysis merely highlighted much of what we already believed. Even though our revenues were up in 1991 we still did not have the strong financial showing possible primarily due to higher labor and equipment repair costs. As a result of this information, we have made certain decisions and established some long and short range remedies as follows


First, we have already DECREASED OUR WORKFORCE by two employees and will maintain this level, except for possibly temporary workers during peak periods.

We will be CONCENTRATING ON STRICTLY THE RENTAL BUSINESS and EXTENSIVELY LIMITING OUR REPAIR BUSINESS to commercial accounts. This should decrease scheduling problems we have had with homeowners and other individuals.

WE WILL TERMINATE our Kubota and/or our Briggs & Stratton agreement IF ASKED TO INVEST ADDITIONAL TIME OR MONEY. Currently our inventories are more than sufficient to support our rental business. Our analysis has shown service work to be a loser.

Review the potential for Total Quality Management in the business.


We are practicing COST CONTAINMENT on a daily basis.


  • Bradenton National Bank, 1988 pickup, from $356/month to $262/month, a $94/month savings.
  • NFCU, 1987 Van, from $383/month to $215/month, a $168/month savings.

We are requesting that G.E. Capital assist us in one of the two options listed below in our efforts to upgrade our equipment and to realign our cash position as follows:

  • To finance a new Ditch Witch 3500 and 1020 Trencher through our G.E. Capital line if possible, and to reamortize the lease at close to the current payment amount. The net purchase amount would be about $28,500 after trade-ins.
  • Extend our lease approximately one year or extend it sufficiently to reduce our payment by about $700/month March through November.
  • Change our reduced payment months to December, January, and February to match our needs.
  • Release the Ditch Witch 2310 trencher and A220 Backhoe to be used as a trade. This will allow us to upgrade critical equipment and reduce maintenance cost. This combination unit is now five years old and the engine is now bored to .040 over. If not traded soon this machine combination, which creates substantial rental revenue, will become a liability.

We are requesting that SBA reamortize our loan to allow for four months without payments starting in June. We would like the maturity date to remain the same. This would result in an accumulation of $9408 in operating capital.

We have purchased a new Skid Steer Loader from Case. This was necessary because:

  • Our previous unit was giving us constant problems and we were unable to keep it on a good long-term commercial rental. Maintenance costs were running very high.
  • There is a real need for a good small loader with optional pallet forks in our rental fleet. The demand is there from a broad range of customers. Our cash flow would be enhanced by at least $161/month, over the new payment amount based on historical information available.
  • We used our old unit as a $2,000 trade-in.

We renegotiated a long-term rental we have had with Biringer effective January 1, 1993, from a previous level of $750/month to $920/month. This is a contract we have had for over two years and it should go for about two more.

THE CHANGES WE HAVE INITIATED SHOULD SAVE AN ANNUAL COST OF $23,436 PER MONTH. (A chart outlining this information has been prepared and is available upon request.)

Rich Rentals has several areas where we maintain a sustainable competitive advantage from the standpoint of being the only service provider in town for the areas of equipment rental; Kubota sales, parts, and service; and Bostitch and Interchange Air Tools and Fasteners. Areas of limited competition are Western Union (one competitor) and Ryder Truck rentals (one competitor; U-Haul).

Marketing Strategy

It is our goal to extend the very best service and equipment to our customers at a competitive price. Our prices must remain competitive to prevent competition in the rental business from within Bradenton and the surrounding areas.

Target Market and Market Share

Our target markets for rental equipment has been and will continue to be:

  • Small contractor - 45 percent of total
  • Industrial sector - 25 percent of total
  • Homeowner - 30 percent of total

They are listed in order of profitability. Since we are currently getting all of the small contractor and industrial rentals we can fill, we most exploit the homeowner segment to a greater degree than in the past.

Our target markets for Ryder truck rentals are:

  • People moving out of town - 70 percent of market
  • In town moves - 20 percent of market
  • Commercial moves-10 percent of market

They are listed in order of priority. Ryder Truck Rental has estimated our share of the truck rental business at 52 percent of the local market. As of April, we became a zone leader for the distribution of Ryder trucks. This will be a revenue enhancer from the standpoint of having additional trucks to rent when needed.

Our target market for Kubota sales is as follows:

  • Industrial sales - 40 percent of market
  • Institutions and business - 20 percent of market
  • Upper middle-class homeowner - 40 percent of market

Western Union is a service we provide because:

  • They provide a computer and software that can be used in other areas of the business.
  • To increase walk-in trade with other revenue potential.

We plan to enhance our rental income by selectively targeting the homeowner market. Our goal in the coming years is to continually increase the homeowner segment of our rental business by eight percent over the previous comparable period. We will continue our existing efforts directed at the contractors and industrial areas.

We will target the realtors as a vehicle to promote greater usage of our trucks and trailers. In addition, Michelle's Moving will also enhance the sales and rentals in this area. Our goal is to increase this area by a factor of six percent on an ongoing basis. Ryder has some discretionary co-op advertising that we will avail ourselves of when possible.

We will continue our sales in this area. Promotion will be minimal because of the excessive labor demands it creates for our service. We have backed off outside service since we have determined that to be a loss area.

Michelle's Moving

Since this area is a contract with Biringer, it will require no promotion. However, if it appears to be profitable after this one-year contract period, we will entertain moving into the local moving business as a separate venture. There is only one existing business providing the service in Bradenton at this time.

The primary thrust of our promotion program in 1992 will be in the form of "DIRECTMAIL" and "DOOR TO DOOR"flyers directedat the "HOWEVERE" market in hopes of expanding our rental business. In the past we depended primarily on radio and newspaper. Most of our potential customers in this trade areaare aware of "WHERE WE ARE" and "WHO WE ARE", but not "WHAT WE HAVE" and"HOW THEY CAN USE US TO THEIR ADVANTAGE".

  • Our mailing list can be directed to individual neighborhoods and we will tie discounts and promotions to each mailing to determine their effectiveness.
  • Thank you letters with additional promotional information and a ten percent discount on their next rental will be a key part of our direct mail campaign.
  • Our mailings will highlight individual tools, how to properly use them for maximum results, and new ideas. We will stress our concept of personal service and just how "rich" we can make their rental experience.
  • We will be utilizing DOOR TO DOOR on a trial basis.

We will begin promoting our equipment rentals by using retail outlets of related merchandise.

  • Automotive equipment, pullers, transmission jacks, hoists, torque wrenches, impacts, timing light, etc. We will provide a coupon worth $2 off any equipment rental at the counter of outlets such as Kmart, Walmart, American Auto, Wilsons, etc.
  • Ryder trucks, moving equipment ad related supplies, such as boxes and tape. In a joint effort with Ryder, we will provide a coupon worth $5 on any local rental and $15.00 on any one-way rental to every real estate agent in Bradenton. We are considering a promotional incentive for the referring agent courtesy of Ryder.

We will continue to use some radio and a minimum newspaper contract of 240" annually, coordinating those mediums with our direct mail campaign.

A detailed outline of our " 1992 ANNUAL CAMPAIGN" will be completed by the end of May as follows:

  • It will be budgeted by type of advertising.
  • It will be itemized by type of equipment and/or service by promotional period.

To help promote the business and provide a higher level of service we will also be setting up an answering machine to give basic after-hours information and emergency numbers for our customers who call after hours and weekends.

Michelle's Moving could become our biggest move in 1992. We will begin in May 1992 providing contract moving services between offices for Biringer Bradenton, Florida. In the fall of 1991 we were approached by Biringer Purchasing to bid on these moving services. This basically consists of providing one full-time employee in a supervisory/labor capacity with assistance from day labor as needed, a Ryder truck, and any necessary moving equipment, about five to six days per month on average. Advance notice will be provided by Biringer to allow us sufficient time to schedule our manpower.

In the past this service had been provided by a local moving company but was not satisfactory. Our long-time relationship with and the availability of all the necessary moving equipment was what brought them to us. This service concept tied in well with our goals to expand our revenues by offering additional services for Biringer that complimented what we were already doing. The basic service contract should be very profitable and will increase the sale of moving boxes which is also very profitable. In addition, it does not require us to invest in any new equipment to provide the service.

For better control of equipment repair costs we will improve our record keeping to include all costs as well as information. In addition, we will return to keeping track of rental revenues by equipment. This information when combined, will give us better data when buying new equipment. We have implemented weekly and monthly P&L Statements as a management tool.

Until further notice any manpower requirements over the basic two employees will be strictly on an as-needed, temporary basis. We are in the process of building financial models to use as a management tool to provide keys for when we must cut back on manpower or other expenditures.

This business is centrally located in Bradenton, Florida at 777 W. Langley Ave. The business is situated on a lot 101 feet by 165 feet, with a 2,450 square foot metal building built by us in 1984. One third of the building is the showroom display area. The Ryder trucks are parked in the front area of the business and across the street in a parking lot.

The business currently has all of the equipment that it needs to operate except for the following replacements and/or additions required:

Equipment Rental: Rich Rentals

Labor Force

Our labor force consists of the owners, Jim and Michelle Griffith and two employees, Dave Weager and Donald Carp

Dave Weager is 29 years old, married with two children, and has 11 years experience as a mechanic. He was hired by us September 5, 1988 and is currently our Shop Foreman with an hourly wage of $9.25.

Donald Carp is 30 years old, married with two children, and was hired on August 18, 1988. He had previously operated his own lawn service business. He is currently a Rental Clerk and primarily responsible for equipment maintenance and service. He is also our parts man with an hourly wage of $6.25. Both employees are Bradenton natives with extensive local knowledge and contacts. A resume outlining the qualifications and experience of Jim Griffith has been prepared and is available upon request

Equipment Rental: Rich Rentals

It is the goal of management through this plan to maximize cash and profitability. This is being accomplished as follows:

  • Cost containment through ongoing analysis and aggressive daily management.
  • Revenue enhancement through the marketing plan and ongoing evaluation and adjustment of our rental rates.
  • Cash Management

The monthly P&L Statements reflect our success to date, in terms of increased profitability over the same period a year ago. These are available upon request.

Our goal for this coming year is to accumulate $15,000 in cash for operating and emergency purposes. This will be accomplished via operations. A 12-month cash forecast has been prepared and is available upon request. It projects an accumulated cash balance at year end of $16,142. This will be accomplished via:

  • Reduction in our labor force
  • Reduction in owner's draw from previous years
  • Refinancing our two vehicle notes
  • Recapitalization of G.E. Capital note
  • Four-month SB A payment waiver
  • Upgrading our trencher and loader to reduce maintenance cost and enhance revenue

Pro-forma statements have been prepared and are available upon request. Assumptions based on these are as follows:

Income Statement

  • An increase in rental revenue is projected from 1991, based on the local construction activity, and generally a solid local economy. (Aforementioned newspaper articles support this)
  • Michelle's Moving revenue is projected at 50 percent of the unofficial estimate from the Biringer Procurement office. Therefore, these projections may be very conservative.
  • Sale projections were reduced because we are no longer promoting sales, which are marginally profitable when compared to rental revenue and we are discouraging service work. A most recent financial comparison based on the first two months of 1991 versus 1992 has been prepared and is available upon request.
  • Current financial statements are also available.
  • The labor projection represents one less full-time position and one less temporary from 1991.
  • The moving insurance is additional workman's compensation due to the inclusion of Michelle's Moving.
  • Equipment repair is reduced because of the projected purchase of two new large items that replaced older ones in poor condition.
  • Also, the deletion of the small gas engine area impacts here. We have already rebuilt two of our three larger diesel air compressors.
  • The finance charges should be reduced due to more available cash and reduced payables.
  • The SBA interest payable assumes the four-month waiver.
  • The G.E. capital interest also assumes a recapitalization. Although this is technically a lease purchase, we have always shown the debt on our balance sheet as a financed purchase to more accurately project our equity position in the equipment.

The current pro-forma income statement shows a before tax profit of $73,434. The pro-forma balance sheets have been adjusted for changes in accounts payable and debt service from year to year. The ALP are reduced to $8,500 within three years and are maintained at that level. This reduction is accomplished solely through operations and assumes the SBA Waiver and the G.E. Capital request for 1992. The May 1994 balance sheets show a $50,000 equipment purchase that will be necessary to maintain our rental equipment inventory.

Replacement vehicles are scheduled in 1993 and 1994. Their respective value and debts are shown. The loader and trencher are scheduled for June 1992, and are included in the May statement for analysis purposes. All of these statements are available upon request.

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equipment rental business plan

How to write a business plan for a construction equipment rental firm?

construction equipment rental firm business plan

Writing a business plan for a construction equipment rental firm can be an intimidating task, especially for those just starting.

This in-depth guide is designed to help entrepreneurs like you understand how to create a comprehensive business plan so that you can approach the exercise with method and confidence.

We'll cover: why writing a construction equipment rental firm business plan is so important - both when starting up, and when running and growing the business - what information you need to include in your plan, how it should be structured, and what tools you can use to get the job done efficiently.

Let's get started!

In this guide:

Why write a business plan for a construction equipment rental firm?

  • What information is needed to create a business plan for a construction equipment rental firm?
  • What goes in the financial forecast for a construction equipment rental firm?
  • What goes in the written part of a construction equipment rental firm business plan?
  • What tool can I use to write my construction equipment rental firm business plan?

Having a clear understanding of why you want to write a business plan for your construction equipment rental firm will make it simpler for you to grasp the rationale behind its structure and content. So before delving into the plan's actual details, let's take a moment to remind ourselves of the primary reasons why you'd want to create a construction equipment rental firm business plan.

To have a clear roadmap to grow the business

It's rarely business as usual for small businesses. The economy follows cycles where years of growth are followed by recessions, and the business environment is always changing with new technologies, new regulations, new competitors, and new consumer behaviours appearing all the time...

In this context, running a business without a clear roadmap is like driving blindfolded: it's dangerous at best. That's why writing a business plan for a construction equipment rental firm is essential to create successful and sustainable businesses.

To write an effective business plan, you will need to take stock of where you are (if you are already in business) and where you want the business to go in the next three to five years.

Once you know where you want your construction equipment rental firm to be, you'll have to identify:

  • what resources (human, equipment, and capital) are needed to get there,
  • at what pace the business needs to progress to get there in time,
  • and what risks you'll face along the way.

Going through this process regularly is beneficial, both for startups and existing companies, as it helps make informed decisions about how best to allocate resources to ensure the long-term success of the business.

To get visibility on future cash flows

If your small construction equipment rental firm runs out of cash: it's game over. That's why we often say "cash is king", and it's crucial to have a clear view of your construction equipment rental firm's future cash flows.

So, how can you achieve this? It's simple - you need to have an up-to-date financial forecast.

The good news is that your construction equipment rental firm business plan already includes a financial forecast (which we'll discuss further in this guide). Your task is to ensure it stays current.

To accomplish this, it's essential to regularly compare your actual financial performance with what was planned in your financial forecast. Based on your business's current trajectory, you can make adjustments to the forecast.

By diligently monitoring your construction equipment rental firm's financial health, you'll be able to spot potential financial issues, like unexpected cash shortfalls, early on and take corrective actions. Moreover, this practice will enable you to recognize and capitalize on growth opportunities, such as excess cash flow enabling you to expand to new locations.

To secure financing

A detailed business plan becomes a crucial tool when seeking financing from banks or investors for your construction equipment rental firm.

Investing and lending to small businesses are very risky activities given how fragile they are. Therefore, financiers have to take extra precautions before putting their capital at risk.

At a minimum, financiers will want to ensure that you have a clear roadmap and a solid understanding of your future cash flows (like we just explained above). But they will also want to ensure that your business plan fits the risk/reward profile they seek.

This will off-course vary from bank to bank and investor to investor, but as a rule of thumb. Banks will want to see a conservative financial management style (low risk), and they will use the information in your business plan to assess your borrowing capacity — the level of debt they think your business can comfortably handle — and your ability to repay the loan. This evaluation will determine whether they'll provide credit to your construction equipment rental firm and the terms of the agreement.

Whereas investors will carefully analyze your business plan to gauge the potential return on their investment. Their focus lies on evidence indicating your construction equipment rental firm's potential for high growth, profitability, and consistent cash flow generation over time.

Now that you recognize the importance of creating a business plan for your construction equipment rental firm, let's explore what information is required to create a compelling plan.

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Information needed to create a business plan for a construction equipment rental firm

Drafting a construction equipment rental firm business plan requires research so that you can project sales, investments and cost accurately in your financial forecast, and convince the reader that there is a viable commercial opportunity to be seized.

Below, we'll focus on three critical pieces of information you should gather before starting to write your plan.

Carrying out market research for a construction equipment rental firm

Before you begin writing your business plan for a construction equipment rental firm, conducting market research is a critical step in ensuring precise and realistic financial projections.

Market research grants you valuable insights into your target customer base, competitors, pricing strategies, and other crucial factors that can impact the success of your business.

In the course of this research, you may stumble upon trends that could impact your construction equipment rental firm.

1. Your construction equipment rental firm might find that the demand for larger pieces of equipment, such as bulldozers and backhoes, is increasing. 2. Your construction equipment rental firm could discover that the demand for smaller pieces of equipment, such as power drills and saws, is declining.

Such market trends play a pivotal role in revenue forecasting, as they provide essential data regarding potential customers' spending habits and preferences.

By integrating these findings into your financial projections, you can provide investors with more accurate information, enabling them to make well-informed decisions about investing in your construction equipment rental firm.

Developing the marketing plan for a construction equipment rental firm

Before delving into your construction equipment rental firm business plan, it's imperative to budget for sales and marketing expenses.

To achieve this, a comprehensive sales and marketing plan is essential. This plan should provide an accurate projection of the necessary actions to acquire and retain customers.

Additionally, it will outline the required workforce to carry out these initiatives and the corresponding budget for promotions, advertising, and other marketing endeavours.

By budgeting accordingly, you can ensure that the right resources are allocated to these vital activities, aligning them with the sales and growth objectives outlined in your business plan.

The staffing and equipment needs of a construction equipment rental firm

As you embark on starting or expanding your construction equipment rental firm, having a clear plan for recruitment and capital expenditures (investment in equipment and real estate) is essential for ensuring your business's success.

Both the recruitment and investment plans must align with the timing and level of growth projected in your forecast, and they require appropriate funding.

Staffing costs for a construction equipment rental firm may include salaries for sales staff, customer service representatives, and mechanics who maintain the equipment. Equipment costs may include the purchase and repair of the equipment, as well as any special tools or safety gear that may be needed. Additionally, the firm may incur costs for renting storage space for the equipment.

To create a realistic financial forecast, you also need to consider other operating expenses associated with the day-to-day running of your business, such as insurance and bookkeeping.

With all the necessary information at hand, you are ready to begin crafting your business plan and developing your financial forecast.

What goes into your construction equipment rental firm's financial forecast?

The financial forecast of your construction equipment rental firm's business plan will enable you to assess the growth, profitability, funding requirements, and cash generation potential of your business in the coming years.

The four key outputs of a financial forecast for a construction equipment rental firm are:

  • The profit and loss (P&L) statement ,
  • The projected balance sheet ,
  • The cash flow forecast ,
  • And the sources and uses table .

Let's look at each of these in a bit more detail.

The projected P&L statement

Your construction equipment rental firm forecasted P&L statement enables the reader of your business plan to get an idea of how much revenue and profits your business is expected to make in the near future.

forecasted profit and loss statement in a construction equipment rental firm business plan

Ideally, your reader will want to see:

  • Growth above the inflation level
  • Expanding profit margins
  • Positive net profit throughout the plan

Expectations for an established construction equipment rental firm will of course be different than for a startup. Existing businesses which have reached their cruising altitude might have slower growth and higher margins than ventures just being started.

The forecasted balance sheet of your construction equipment rental firm

The projected balance sheet of your construction equipment rental firm will enable the reader of your business plan to assess the overall financial health of your business.

It shows three elements: assets, liabilities and equity:

  • Assets: are productive resources owned by the business, such as equipment, cash, and accounts receivable (money owed by clients).
  • Liabilities: are debts owed to creditors, lenders, and other entities, such as accounts payable (money owed to suppliers).
  • Equity: includes the sums invested by the shareholders or business owners and the profits and losses accumulated by the business to date (which are called retained earnings). It is a proxy for the value of the owner's stake in the business.

projected balance sheet in a construction equipment rental firm business plan example

Analysing your construction equipment rental firm projected balance sheet provides an understanding of your construction equipment rental firm's working capital structure, investment and financing policies.

In particular, the readers of your plan can compare the level of financial debt on the balance sheet to the equity value to measure the level of financial risk (equity doesn't need to be reimbursed, while financial debt must be repaid, making it riskier).

They can also use your balance sheet to assess your construction equipment rental firm's liquidity and solvency:

  • A liquidity analysis: focuses on whether or not your business has sufficient cash and short-term assets to cover its liabilities due in the next 12 months.
  • A solvency analysis: takes and longer view to assess whether or not your business has the capacity to repay its debts over the medium-term.

The cash flow forecast

As we've seen earlier in this guide, monitoring future cash flows is the key to success and the only way of ensuring that your construction equipment rental firm has enough cash to operate.

As you can expect showing future cash flows is the main role of the cash flow forecast in your construction equipment rental firm business plan.

example of projected cash flow forecast in a construction equipment rental firm business plan

It is best practice to organise the cash flow statement by nature in order to show the cash impact of the following areas:

  • Cash flow generated from operations: the operating cash flow shows how much cash is generated or consumed by the business's commercial activities
  • Cash flow from investing activities: the investing cash flow shows how much cash is being invested in capital expenditure (equipment, real estate, etc.) either to maintain the business's equipment or to expand its capabilities
  • Cash flow from financing activities: the financing cash flow shows how much cash is raised or distributed to financiers

Looking at the cash flow forecast helps you to make sure that your business has enough cash to keep running, and can help you anticipate potential cash shortfalls.

Your construction equipment rental firm business plan will normally include both yearly and monthly cash flow forecasts so that the readers can view the impact of seasonality on your business cash position and generation.

The initial financing plan

The sources and uses table or initial financing plan is a key component of your business plan when starting a construction equipment rental firm.

It shows where the capital needed to set up the business will come from (sources) and how it will be spent (uses).

sources and uses table in a construction equipment rental firm business plan

This table helps size the investment required to set up the construction equipment rental firm, and understand how risks will be distributed between the business owners, and the financiers.

The sources and uses table also highlights what the starting cash position will be. This is key for startups as the business needs to have sufficient funding to sustain operations until the break-even point is reached.

Now that you have a clear understanding of what will go into the financial forecast of your construction equipment rental firm business plan, let's have a look at the written part of the plan.

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The written part of a construction equipment rental firm business plan

The written part of the business plan is where you will explain what your business does and how it operates, what your target market is, whom you compete against, and what strategy you will put in place to seize the commercial opportunity you've identified.

Having this context is key for the reader to form a view on whether or not they believe that your plan is achievable and the numbers in your forecast realistic.

The written part of a construction equipment rental firm business plan is composed of 7 main sections:

  • The executive summary
  • The presentation of the company
  • The products and services
  • The market analysis
  • The strategy
  • The operations
  • The financial plan

Let's go through the content of each section in more detail!

1. The executive summary

The first section of your construction equipment rental firm's business plan is the executive summary which provides, as its name suggests, an enticing summary of your plan which should hook the reader and make them want to know more about your business.

When writing the executive summary, it is important to provide an overview of the business, the market, the key financials, and what you are asking from the reader.

Start with a brief introduction of the business, its name, concept, location, how long it has been in operation, and what makes it unique. Mention any services or products you plan to offer and who you sell to.

Then you should follow with an overview of the addressable market for your construction equipment rental firm, current trends, and potential growth opportunities.

You should then include a summary of your key financial figures such as projected revenues, profits, and cash flows.

Finally, you should detail any funding requirements in the ask section.

2. The presentation of the company

The second section in your construction equipment rental firm's business plan should focus on the structure and ownership, location, and management team of the company.

The structure and ownership part provides an overview of the legal structure of the business, who the owners are and how much each has invested and owns. If you are seeking financing it is important that the reader gets a clear picture of which legal entity is receiving the funds, and who controls the business.

The location part should give an overview of the premises from which the company is operating, and why that location is of particular interest (catchment area, accessibility, amenities nearby, etc.).

When describing the location of your construction equipment rental firm, you may mention that it is in a prime location where there is a high demand for construction equipment rentals. The area may have a growing population due to new businesses and residential developments that could lead to an increase in rental activity. Additionally, the area may be easily accessible by public transportation, which could make it easier to access the equipment and get it to the job site. Finally, the area may be close to other businesses and services that may be needed for the construction projects. All of this could indicate that the location is a good fit for your construction equipment rental business.

Finally, you should introduce the management team. Explain each member's role, background, and experience.

It is also important to emphasize any past successes that the members of the management team have achieved, and how long they've been working together, as this will help potential lenders or investors understand why they should trust in their leadership.

3. The products and services section

The products and services section of your construction equipment rental firm business plan should include a detailed description of what your company sells to its customers. 

For example, your construction equipment rental firm can provide customers with heavy machinery such as backhoes, excavators, and bulldozers for large-scale construction projects. It can also offer services such as delivery and on-site repairs to ensure that the equipment is working properly and that your customers’ projects are completed on time. Additionally, your firm can provide the necessary safety and operational training to ensure that the job is done safely and efficiently.

The reader will want to understand what makes your construction equipment rental firm unique from other businesses in this competitive market.

When drafting this section, you should be precise about the categories of products or services you sell, the clients you are targeting and the channels that you are targeting them through. 

4. The market analysis

When presenting your market analysis in your construction equipment rental firm business plan, you should detail the customers' demographics and segmentation, target market, competition, barriers to entry, and any regulations that may apply.

The goal of this section is to help the reader understand how big and attractive your market is, and demonstrate that you have a solid understanding of the industry.

You should start with the demographics and segmentation subsection, which gives an overview of the addressable market for your construction equipment rental firm, the main trends in the marketplace, and introduces the different customer segments and their preferences in terms of purchasing habits and budgets.

The target market section should follow and zoom on the customer segments your construction equipment rental firm is targeting, and explain how your products and services meet the specific needs of these customers.

For example, your target market might include homeowners who need access to construction equipment for a one-time project. These homeowners might not want to purchase the equipment outright, so they would benefit from renting it instead. They may need equipment for a renovation, landscaping project, or construction of a new structure.

Then comes the competition subsection, where you should introduce your main competitors and explain what differentiates you from them.

Finally, you should finish your market analysis by giving an overview of the main regulations applicable to your construction equipment rental firm.

5. The strategy section

When crafting the strategy section of your business plan for your construction equipment rental firm, it's important to cover several key aspects, including your competitive edge, pricing strategy, sales & marketing plan, milestones, and risks and mitigants.

In the competitive edge subsection, clearly explain what sets your company apart from competitors. This is particularly critical if you're a startup, as you'll be trying to establish your presence in the marketplace among entrenched players.

The pricing strategy subsection should demonstrate how you aim to maintain profitability while offering competitive prices to your customers.

For the sales & marketing plan, outline how you plan to reach and acquire new customers, as well as retain existing ones through loyalty programs or special offers.

In the milestones subsection, detail what your company has achieved thus far and outline your primary objectives for the coming years by including specific dates for expected progress. This ensures everyone involved has clear expectations.

Lastly, in the risks and mitigants subsection, list the main risks that could potentially impact the execution of your plan. Explain the measures you've taken to minimize these risks. This is vital for investors or lenders to feel confident in supporting your venture - try to proactively address any objection they might have.

Your construction equipment rental firm may face the risk of theft. Equipment could be stolen from the jobsite or from the rental yard. To minimize this risk, your firm could equip each piece of equipment with a GPS tracking device and require proof of identification from customers before any rentals are made. Your firm may also face the risk of equipment breakdowns. Equipment could be damaged due to improper use or due to normal wear and tear. To mitigate this risk, your firm could provide thorough training to rental customers on the proper use of the equipment and have regular maintenance and inspections done on the equipment to ensure it is in good working order.

6. The operations section

The operations of your construction equipment rental firm must be presented in detail in your business plan.

The first thing you should cover in this section is your staffing team, the main roles, and the overall recruitment plan to support the growth expected in your business plan. You should also outline the qualifications and experience necessary to fulfil each role, and how you intend to recruit (using job boards, referrals, or headhunters).

You should then state the operating hours of your construction equipment rental firm - so that the reader can check the adequacy of your staffing levels - and any plans for varying opening times during peak season. Additionally, the plan should include details on how you will handle customer queries outside of normal operating hours.

The next part of this section should focus on the key assets and IP required to operate your business. If you depend on any licenses or trademarks, physical structures (equipment or property) or lease agreements, these should all go in there.

You may have key assets such as a fleet of construction equipment and real estate. These could be important to the business operations and could be considered IP. Additionally, you might have proprietary software or processes that are used in the rental process and could be protected as IP.

Finally, you should include a list of suppliers that you plan to work with and a breakdown of their services and main commercial terms (price, payment terms, contract duration, etc.). Investors are always keen to know if there is a particular reason why you have chosen to work with a specific supplier (higher-quality products or past relationships for example).

7. The presentation of the financial plan

The financial plan section is where we will include the financial forecast we talked about earlier in this guide.

Now that you have a clear idea of the content of a construction equipment rental firm business plan, let's look at some of the tools you can use to create yours.

What tool should I use to write my construction equipment rental firm's business plan?

In this section, we will be reviewing the two main solutions for creating a construction equipment rental firm business plan:

  • Using specialized online business plan software,
  • Outsourcing the plan to the business plan writer.

Using an online business plan software for your construction equipment rental firm's business plan

Using online business planning software is the most efficient and modern way to create a construction equipment rental firm business plan.

There are several advantages to using specialized software:

  • You can easily create your financial forecast by letting the software take care of the financial calculations for you without errors
  • You are guided through the writing process by detailed instructions and examples for each part of the plan
  • You can access a library of dozens of complete business plan samples and templates for inspiration
  • You get a professional business plan, formatted and ready to be sent to your bank or investors
  • You can easily track your actual financial performance against your financial forecast
  • You can create scenarios to stress test your forecast's main assumptions
  • You can easily update your forecast as time goes by to maintain visibility on future cash flows
  • You have a friendly support team on standby to assist you when you are stuck

If you're interested in using this type of solution, you can try The Business Plan Shop for free by signing up here .

Need a solid financial forecast?

The Business Plan Shop does the maths for you. Simply enter your revenues, costs and investments. Click save and our online tool builds a three-way forecast for you instantly.

Screenshot from The Business Plan Shop's Financial Forecasting Software

Hiring a business plan writer to write your construction equipment rental firm's business plan

Outsourcing your construction equipment rental firm business plan to a business plan writer can also be a viable option.

These writers possess valuable experience in crafting business plans and creating accurate financial forecasts. Additionally, enlisting their services can save you precious time, enabling you to concentrate on the day-to-day operations of your business.

It's important to be mindful, though, that hiring business plan writers comes with a cost. You'll be paying not just for their time but also for the software they use, and their profit margin.

Based on experience, a complete business plan usually requires a budget of at least £1.5k ($2.0k) excluding tax, and more if revisions are needed after initial meetings with lenders or investors - changes often arise following these discussions.

When seeking investment, be cautious about spending too much on consulting fees. Investors prefer their funds to contribute directly to business growth. Thus, the amount you spend on business plan writing services and other consulting services should be negligible compared to the amount you raise.

Another aspect to consider is that while you'll receive the output of the business plan, you usually won't own the actual document. It will be saved in the consultant's business plan software, which will make updating the plan challenging without retaining the consultant on a retainer.

Given these factors, it's essential to carefully weigh the pros and cons of outsourcing your construction equipment rental firm business plan to a business plan writer and decide what best suits your business's unique needs.

Why not create your construction equipment rental firm's business plan using Word or Excel?

I must advise against using Microsoft Excel and Word (or their Google, Apple, or open-source equivalents) to write your construction equipment rental firm business plan. Let me explain why.

Firstly, creating an accurate and error-free financial forecast on Excel (or any spreadsheet) is highly technical and requires a strong grasp of accounting principles and financial modelling skills. It is, therefore, unlikely that anyone will fully trust your numbers unless you have both a degree in finance and accounting and significant financial modelling experience, like us at The Business Plan Shop.

Secondly, relying on spreadsheets is inefficient. While it may have been the only option in the past, technology has advanced significantly, and software can now perform these tasks much faster and with greater accuracy. With the rise of AI, software can even help us detect mistakes in forecasts and analyze the numbers for better decision-making.

And with the rise of AI, software is also becoming smarter at helping us detect mistakes in our forecasts and helping us analyse the numbers to make better decisions.

Moreover, software makes it easier to compare actuals versus forecasts and maintain up-to-date forecasts to keep visibility on future cash flows, as we discussed earlier in this guide. This task is cumbersome when using spreadsheets.

Now, let's talk about the written part of your construction equipment rental firm business plan. While it may be less error-prone, using software can bring tremendous gains in productivity. Word processors, for example, lack instructions and examples for each part of your business plan. They also won't automatically update your numbers when changes occur in your forecast, and they don't handle formatting for you.

Overall, while Word or Excel may seem viable for some entrepreneurs to create a business plan, it's by far becoming an antiquated way of doing things.

  • Using business plan software is a modern and cost-effective way of writing and maintaining business plans.
  • A business plan is not a one-shot exercise as maintaining it current is the only way to keep visibility on your future cash flows.
  • A business plan has 2 main parts: a financial forecast outlining the funding requirements of your construction equipment rental firm and the expected growth, profits and cash flows for the next 3 to 5 years; and a written part which gives the reader the information needed to decide if they believe the forecast is achievable.

We hope that this in-depth guide met your expectations and that you now have a clear understanding of how to write your construction equipment rental firm business plan. Do not hesitate to contact our friendly team if you have questions additional questions we haven't addressed here.

Also on The Business Plan Shop

  • How to write a business plan to secure a bank loan?
  • How does a business plan differ from a business model canvas?
  • How to write a business plan for a supplier
  • Key steps to write a business plan?
  • Top mistakes to avoid in your business plan

Do you know entrepreneurs interested in starting or growing a construction equipment rental firm? Share this article with them!

Guillaume Le Brouster

Founder & CEO at The Business Plan Shop Ltd

Guillaume Le Brouster is a seasoned entrepreneur and financier.

Guillaume has been an entrepreneur for more than a decade and has first-hand experience of starting, running, and growing a successful business.

Prior to being a business owner, Guillaume worked in investment banking and private equity, where he spent most of his time creating complex financial forecasts, writing business plans, and analysing financial statements to make financing and investment decisions.

Guillaume holds a Master's Degree in Finance from ESCP Business School and a Bachelor of Science in Business & Management from Paris Dauphine University.

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Many owners of sole proprietorships, partnerships, S corporations and some trusts and estates may be eligible for a qualified business income (QBI) deduction – also called the Section 199A deduction – for tax years beginning after December 31, 2017. The deduction allows eligible taxpayers to deduct up to 20 percent of their QBI, plus 20 percent of qualified real estate investment trust (REIT) dividends and qualified publicly traded partnership (PTP) income. Income earned through a C corporation or by providing services as an employee is not eligible for the deduction. For more information on what qualifies as a trade or business, see Determining your qualified trades or businesses in the Instructions for Form 8995-A or Form 8995 .

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  • QBI Component. This component of the deduction equals 20 percent of QBI from a domestic business operated as a sole proprietorship or through a partnership, S corporation, trust, or estate. The QBI Component is subject to limitations, depending on the taxpayer's taxable income which may include the type of trade or business, the amount of W-2 wages paid by the qualified trade or business, and the unadjusted basis immediately after acquisition (UBIA) of qualified property held by the trade or business. It may also be reduced by the patron reduction if the taxpayer is a patron of an agricultural or horticultural cooperative.
  • REIT/PTP Component. This component of the deduction equals 20 percent of qualified REIT dividends and qualified PTP income. This component is not limited by W-2 wages or the UBIA of qualified property. Depending on the taxpayer's taxable income, the amount of PTP income that qualifies may be limited depending on the type of the PTP's trade or business.

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QBI is the net amount of qualified items of income, gain, deduction, and loss from any qualified trade or business, including income from partnerships, S corporations, sole proprietorships, and certain trusts. Generally, this includes, but is not limited to, the deductible part of self-employment tax, self-employed health insurance, and deductions for contributions to qualified retirement plans (e.g., SEP, SIMPLE and qualified plan deductions).

QBI does not include items such as:

  • Items that are not properly includable in taxable income
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  • Interest income not properly allocable to a trade or business
  • Wage income
  • Income that is not effectively connected with the conduct of business within the United States
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Solely for the purposes of section 199A, a safe harbor is available to individuals and owners of passthrough entities who seek to claim the deduction under section 199A with respect to a rental real estate enterprise. Under the safe harbor a rental real estate enterprise will be treated as a trade or business for purposes of the QBI deduction if certain criteria are met. For more information on the safe harbor, see  News Release IR-2019-158

An interest in rental real estate that does not meet the requirements of the safe harbor may still be treated as a trade or business for purposes of the QBI deduction if it otherwise is a section 162 trade or business.

In addition, the rental or licensing of tangible or intangible property that does not rise to the level of a section 162 trade or business is nevertheless treated as a qualified trade or business for purposes of section 199A if the rental or licensing of property is to a commonly controlled trade or business operated by the individual or a passthrough entity as provided in Treas. Reg. § 1.199A-1(b)(14).

More information:

  • Final Regulations PDF
  • Notice 2018-64
  • Instructions to Form 1040 PDF
  • Instructions to Form 8995-A PDF
  • Instructions to Form 8995 PDF
  • Publication 535 PDF
  • Tax Reform Basics for the Qualified Business Income Deduction (199A)

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Traveler reimbursement is based on the location of the work activities and not the accommodations, unless lodging is not available at the work activity, then the agency may authorize the rate where lodging is obtained.

Unless otherwise specified, the per diem locality is defined as "all locations within, or entirely surrounded by, the corporate limits of the key city, including independent entities located within those boundaries."

Per diem localities with county definitions shall include "all locations within, or entirely surrounded by, the corporate limits of the key city as well as the boundaries of the listed counties, including independent entities located within the boundaries of the key city and the listed counties (unless otherwise listed separately)."

When a military installation or Government - related facility(whether or not specifically named) is located partially within more than one city or county boundary, the applicable per diem rate for the entire installation or facility is the higher of the rates which apply to the cities and / or counties, even though part(s) of such activities may be located outside the defined per diem locality.


  1. Construction Equipment Rental Business Plan

    equipment rental business plan

  2. How to Write a Equipment Rental Business Plan: Complete Guide

    equipment rental business plan

  3. How to Write a Equipment Rental Business Plan: Complete Guide

    equipment rental business plan

  4. How to Write a Equipment Rental Business Plan: Complete Guide

    equipment rental business plan

  5. Construction Equipment Rental Business Plan

    equipment rental business plan

  6. Construction Equipment Rental Business Plan

    equipment rental business plan


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  1. How to Write a Equipment Rental Business Plan: Complete Guide

    The business plan of your equipment rental company must start with a high-level overview of every section: the executive summary. The overview must be small, attention-grabbing, and focus on the concept, problems, solutions, target audience, financial targets, etc. Ideally, the executive summary must not exceed 1-2 pages.

  2. Guide To Starting A Profitable Equipment Rental Company In 2021

    Sept. 18, 2021 The equipment rental industry has outgrown the overall construction industry over the past few decades. Learn how you can start your own equipment rental company. MacAllister CAT equipment for rent at its Indianapolis location Equipment Rental Industry Overview

  3. How to Start an Equipment Rental Business in 2024

    $50,000 - $125,000 p.a. Industry trend Growing Commitment Flexible If you're looking to start a business from home and make good money, an equipment rental business may be just the ticket. It's a large and growing industry, expected to rebound more than 60% from a huge dip in 2020.

  4. Equipment Rental Sales Business Plan Example

    1.1 Mission ER's mission is to become THE exclusive full-service equipment rental, sales, and service company in upper and lower Denton Parish with the ability to service the surrounding parishes of Memphis, Knoxville, Grand Prairie, Plano, Garland, Irvine, and Riverside.

  5. 5 Things to Include in Your Equipment Rental Business Plan

    There are multiple aspects to an equipment rental business plan. It should cover how you plan to make your business successful. Just a few of these include working through revenue sources, aligning with business legalities, identifying what innovative equipment you plan to offer, and more.

  6. How to Start an Equipment Rental Business [WITH RESOURCES]

    How to Start an Equipment Rental Business [WITH RESOURCES] Not sure where to start when building an equipment rental business? Don't stress. This article covers everything from identifying your target audience to starting a business plan. Set yourself up for success with this quick how-to guide for starting your own equipment rental business.

  7. Equipment Rental Business Plan Examples

    Explore our library of Equipment Rental Business Plan Templates and find inspiration for your own business.

  8. How to write a business plan for an equipment rental company?

    To get visibility on future cash flows If your small equipment rental company runs out of cash: it's game over. That's why we often say "cash is king", and it's crucial to have a clear view of your equipment rental company's future cash flows. So, how can you achieve this? It's simple - you need to have an up-to-date financial forecast.

  9. How To Start An Equipment Rental Business: Your Guide to Success

    Updated April 13, 2022 An equipment rental business start-up can be an extremely lucrative and effective form of business or income that you can grow to a (relatively) passive income stream.

  10. Starting an Equipment Rental Business

    November 28, 2023 The equipment rental industry is expected to reach USD 58.49 billion by 2029, up from USD 42.64 billion in 2022. The constant industry growth means it is ripe for investment. Creating a robust plan can help you start your business in this industry today.

  11. Equipment Rental Business Plan

    The business model for an equipment rental business plan should communicate what assets will be rented, the price, and how the facility will operate. For instance, how the assets will be acquired, maintained, and salvaged are all dimensions that should be well planned before you begin operations.

  12. How To Create A Construction Equipment Rental Business Plan

    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.

  13. Construction Equipment Rental Business Plan [Sample Template]

    A Sample Construction Equipment Rental Business Plan Template. 1. Industry Overview. The equipment rental industry according to IBIS World has several downstream businesses or industries that are its customers such as railcars, aircrafts, ships and drilling machineries. The revenue from this industry amounts to $38 billion and the projected ...

  14. Equipment Rental Business Plan

    Equipment Rental Business Plan Equipment Rental Photo by: Yves Roland BUSINESS PLAN RICH RENTALS 777 W. Langley Ave. Bradenton, Florida 89201 February 1992 Rich Rentals is an equipment rental business providing a wide variety of tools and machinery for the Do-it-Yourselfer.

  15. TEKHNIKA, OOO Company Profile

    Industry: Commercial and Industrial Machinery and Equipment Rental and Leasing , Utility System Construction , Foundation, Structure, and Building Exterior Contractors , Heavy construction equipment rental, Water, sewer, and utility lines See All Industries, Electric power line construction, Concrete work, Foundation and footing contractor Structural steel erection See Fewer Industries

  16. Equipment Rental Sales Business Plan Template

    Key sections in this equipment rental sales business plan: All of our sample business plans are complete and include all of the sections that bankers and investors expect to see. Every plan includes the following sections: Executive Summary: A quick overview of your plan and entices investors to read more of your plan.

  17. How to write a business plan for a construction equipment rental firm?

    A business plan is not a one-shot exercise as maintaining it current is the only way to keep visibility on your future cash flows. A business plan has 2 main parts: a financial forecast outlining the funding requirements of your construction equipment rental firm and the expected growth, profits and cash flows for the next 3 to 5 years; and a ...


    Industry: Machinery, Equipment, and Supplies Merchant Wholesalers , Apparel Knitting Mills , Industrial Machinery Manufacturing , Commercial and Industrial Machinery and Equipment Rental and Leasing , Personal and Household Goods Repair and Maintenance See All Industries, Textile and leather machinery, Hosiery, nec, Textile machinery, Equipment ...


    Industry: Commercial and Industrial Machinery and Equipment Rental and Leasing , General Freight Trucking , Scenic and Sightseeing Transportation, Water , Miscellaneous Nondurable Goods Merchant Wholesalers , Offices of Real Estate Agents and Brokers See All Industries, Equipment rental and leasing, nec, Trucking, except local, Water passenger transportation, Nondurable goods, nec, Real estate ...

  20. Qualified Business Income Deduction

    An interest in rental real estate that does not meet the requirements of the safe harbor may still be treated as a trade or business for purposes of the QBI deduction if it otherwise is a section 162 trade or business. In addition, the rental or licensing of tangible or intangible property that does not rise to the level of a section 162 trade ...

  21. GEBAU, OOO Company Profile

    Industry: Commercial and Industrial Machinery and Equipment Rental and Leasing , Building Finishing Contractors , Plastics Product Manufacturing , Lumber and Other Construction Materials Merchant Wholesalers , Miscellaneous Durable Goods Merchant Wholesalers See All Industries, Equipment rental and leasing, nec, Painting and paper hanging ...

  22. Privately owned vehicle (POV) mileage reimbursement rates

    Socio economic categories Check your eligibility for small-business set-asides. Training and videos Suggested training for doing business with us. ... Rental policy and procedures. Site selection and relocation. For businesses seeking opportunities. ... Plan and book expand menu. Per diem rates. Transportation (airfare rates, POV rates, etc ...