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Key steps to equipment rental profitability

Investing in rental equipment is really no different than the process of investing in equipment that you purchase.  You have a figure in your head that you need to stay below for your budget to work, then you go and shop around for the best value for your money.  Finding a supplier won’t be hard, most manufacturers today offer their own leasing options.  Finding an investor is typically much harder, but if you do your homework, it should be a natural progression.  Let’s rundown what factors into equipment rental profitability.

Looking at Quotes

To avoid wasting unnecessary time listening to every company’s sales pitches, you should come prepared with a list of specific needs and limitations.  Being proactive with your approach can get you quotes that most buyers will never get, because the leasing company knows that you are serious about renting their equipment and could step away if they feel that they aren’t being heard.

Companies that have a good reputation will lay out everything in plain English and will not try to skip any of the fine print.  This is especially important for a long-term contract, where you’ll be in a close relationship with that company for a long time.

Stiff Competition

In the tough economy of today, investors are much more complex and are able to select from a wider array of options today to minimize risk and maximize profits.  It seems that the biggest challenge of today’s market landscape is finding ways to inject more capital into their business, by building up a strong foundation, which can come from reducing equipment costs through leasing equipment.

No matter what type of business or industry you’re in: medical, construction, retail, automotive, or office space, there are going to be opportunities for you to take advantage of through renting instead of outright purchasing equipment.  The distribution channels are favoring major investments, giving companies fewer options.

Growing Investments

Entrepreneurs stepping foot into new markets are a high-risk investment for venture capitalists, so it’s going to take a lot for them to take the first bite.  The truth is, the odds are not in the favor of the little guy who is trying to grow his business.  They’re a nobody, an unknown brand on the market that has to prove themselves to be worthy of investment.  It makes most industries involved in the utilization of expensive equipment, parts, and services start in a very precarious position, as margins and sales are typically hard to move into the positive right out of the gate.

The big name brands in their respective industries started in an advantageous state before the 80’s, when regulatory rules and competition in the rental business was much more relaxed.  The road for the small business startup who wants to turn a profit being an equipment dealer is a long and hard one, but for those who tough it out and develop a successful strategy, the rewards will be well worth it, as more and more businesses depend on renting equipment to help grow their businesses and get the investment capital they need to continue to prosper.