Equipment Rental Cost Calculator

Published on March 31, 2022

Point is, this industry is growing fast. It’s a great time to be in the equipment rental business.

If you manage your business well, you can see huge growth fast. Thing is, to do that, you need a plan.

You need to run the numbers. One of the things you can do this with, is the cost of your rental equipment.

How much are your loans? How long will it take, at what price, to repay those loans? How should you ensure that you get a good ROI on your equipment?

To help you answer these questions, we’ve created a detailed online calculator. Just plug in your numbers, and you can find out what you’ll need to do to make sure you make a profit.

Our Equipment Rental Cost Calculator Spreadsheet

To help you crunch the numbers, we’ve created an equipment rental cost calculator.

It’s in the form of a spreadsheet, which you can open and use in Google Sheets, Excel, or similar apps. It’s programmed to do the math for you – just enter your numbers, and you’re good to go.

Using Sheets or Excel, you can calculate the best daily, weekly, or monthly equipment rental rates that will get you the best ROI, while still remaining competitive.

So how do you use it? Below, we have a full rundown of what our calculator does, and how to use this simple but powerful tool to figure out how to get the best ROI on your investment into your business.

What you’ll need:

Purchase cost of equipment
Insurance cost
Operating costs
Loan costs
Any other associated costs
Your ROI goal
The period of time over which you want to break even on the loan
Your utilization rate (per day, per week, or per month.)
Your utilization rate percentage (for daily utilization rates, you should enter 100%)

How to Calculate The Price of Your Rental Equipment?

When deciding how to properly price rental equipment, companies should understand the costs of owning their equipment, how often they can expect to rent their equipment per month, and any other costs that may be required.

Pricing for rentals should take the following into account:

Initial cost of the equipment
Any maintenance associated with keeping the equipment in good repair
How often the equipment may be rented each month
Any additional expenditures, such as staff or storage costs

Before pricing rental equipment, it’s important to conduct market research of other firms in your area that offers similar items for rent.

Find out how much they are charging for the rental of their equipment. Identify if there are any discounts offered for longer rental times or if additional costs associated with the equipment are passed on to their customers.

This article will discuss how to properly price rental equipment. It also includes an equipment rental rates calculator that can be used to help you figure out how long it will take to recoup your initial outlay.

Daily vs Weekly vs Monthly Equipment Rental Rates

In our calculator, you can set your rates by day, by week, or by month.

So which is the best option?

In short, the longer the rental, the better the daily rate equivalent should be. Longer rentals are massively valuable as they limit the number of transactions you have to make, and minimize downtime.

On the other hand, higher rates for shorter term periods means you’ll make more on each rental. Targeting customers that have longer rental periods will generally make for a more profitable and sustainable business that’s easier to manage.

Your administration and handling costs tend to be higher for shorter term rentals – keeping in mind that equipment needs to be cleaned, and undergo routine maintenance, between rentals.

There are different ways you can structure this, but daily rates – with weekly and monthly based off of the daily rate – tend to be optimal for most types of equipment rental, including heavy construction equipment.

A good way to do this is to start with the daily rate, then set monthly rentals based on the number of calendar days total in the rental period, plus a slight discount for the longer period. So if your daily rate is $200 for a piece of machinery, and say you’d be comfortable giving a 10% discount for a monthly rental as opposed to a daily one, you’d be looking at around $5,400 for a month-long rental period – a good deal for everyone involved.

You can also consider things like a discounted monthly rate for high-value recurring customers who rent for long term periods. But generally speaking, it’s best to charge by the day.

That way, calculating your equipment rental rates daily, monthly, and weekly in Excel or Google Sheets is also a lot easier.

Product Costs

When deciding how to price rental items, you must first figure out the cost of the equipment you plan to rent. The cost of the item should include the initial outlay for the product, as well as any interest expenses and upkeep costs. Upkeep costs can include storage, maintenance, and an allocation of staff wages as a proportion of the product.

Breaking Even

Your first task is to understand how long you expect it will take to break even with your initial investment in your equipment. Once you break even, your ROI improves substantially because you are renting your products almost purely for profit (with the exception of on-going costs such as maintenance, insurance, staff, etc.).

Return on Investment Goals

There are two different prices you can rent your product out at: at the break even price, or at a price with profit in mind.

If you rent your equipment out purely at your break even price, your overall rental price will likely be lower than your competitors, and thus will be more attractive for customers. However, recouping your initial investment will take more rental days.

Plus, there’s no reason to completely undercut your competitors, though offering a lower price is a good incentive for new customers to choose you.

With the right calculations, you can layer in an ROI goal while you are still in your break even phase.

An Example Rental Cost Calculation Scenario

Say, you purchased 10 pieces of equipment to rent which totaled $100,000.

You want to break even in 2.5 years.

In order to recoup your investment, you would need to rent out your 10 pieces of equipment about for a total of 200 days during 2.5 years at a price around $200 per day.

However – your competitor rents this piece of equipment out for $400 a day. Even lowering your price $50 underneath theirs would be a nice perk for your customer. If you were rent out your equipment at $350, you could recoup your costs in in around 115 days.

But – if your competitor is renting for $400 a day – they are probably renting at a profit instead of breaking even – as should you.

Back to the drawing board:

10 pieces of equipment: initial cost = $100,000

Break Even Goal: 2.5 Years

Competitor rental price: $400 per day.

Your ROI goal: 250% ie 150K on top of your initial investment.

If you rent your 10 pieces of equipment a total of 350 times in 2.5 years at a price of about $400 per day, you would break even in 2.5 years while making 150K.

The key factor is the number of times you think your market requires during this time period. Is renting 10 pieces of equipment for a total of 350 times in 2.5 years seem possible?

If this seems unreasonable, you have a couple levers to pull.

1) Your ROI goal might be too high. If you lower your ROI goal, then number of days you need to rent lowers.

2) Your Break Even Goal: You could increase your Break Even Goal, so that it takes longer to pay off your initial investment. However, rule of thumb is that you should Break Even with your initial investments at a max of 3 years.

3) Your rental price. If you price below your competitors, you may gain an edge in your market which would increase potential renters.

Utilization Rates

Some niches – most commonly construction – price their equipment based on utilization rates. During peak seasons, you might expect some of your equipment to rent out for half of a month. Thus – a 50% utilization rate.

Identifying a utilization rate requires having a strong understanding of your industry, however can be helpful for planning and maintenance costs.

If you are new to an industry, considering just how many days you need to rent during your break even period may be more helpful in that it simplifies what your goals are. Instead of thinking, “I need to rent out my equipment 50% of each month for 2.5 years”, you can replace this with “I need to rent out my equipment for x number of days over 2.5 years.”

Post Breaking Even Period Profit

Once you have reached the end of your Break Even Period, your profit margins will greatly increase since now you are renting almost purely for profit. With the exception of recurring cost such as insurance, maintenance, staff, etc. your equipment is paid for.

Here – you can calculate further your future profit and the calculation is quite simple.

(Rental Price x Expected Days Per Year it Is Rented) – Annual Costs = Annual Profit

What Are the Advantages to Understanding the Profitability of Your Equipment?

Knowing what items in your equipment rental company are generating a profit can help you better understand the mechanics of your operations. If you are consistently generating a regular income from particular items that you rent, you can decide to purchase more of them.

In contrast, if you have items that aren’t very popular with your customers, you may decide not to keep many of them available to rent. Thus, you’ll be able to have a more balanced approach to managing your event equipment inventory.

The equipment rental cost calculator can give you a lot of insight into understanding what benefits your business and what doesn’t. You don’t want to invest in products that have a high product cost and don’t sell well.

In that case, you’d be left with reduced profits or even losses. Understanding the strength of your product mix can help reduce your spending on unprofitable items.

USE QUIPLI’S RENTAL EQUIPMENT CALCULATOR TO FORMULATE A BREAKEVEN POINT

Equipment Rental Pricing FAQ

How do I calculate equipment rental rates?

The best way to figure out how to price your rental equipment is to price it by day, by week, or by month. (Rather than using a fixed rate structure.) Some of the factors to keep in mind include:

Initial cost and/or loan payments
Maintenance cost
Your goal for time to break even
Your ROI goal (what percentage you want to make back vs the cost)
What your competitors are charging for the same equipment

How do I calculate my equipment utilization rate?

To calculate your time utilization rate – that is, what percentage of the time a particular piece of equipment is in use – you can use the following simple formula:

(Days rented)/(days available for rental) = Time Utilization Percentage

The best time utilization percentage to aim for, for your fleet or inventory as a whole, is 75%. Keep in mind that equipment can often be under routine maintenance between uses, or can be in the shop for repairs. No piece of equipment is going to have a 100% utilization rate individually, regardless of the time period by which you’re measuring it.

How do I calculate the cost of my equipment?

The initial up-front cost of the equipment – whether you took out a loan, or bought it outright – is only part of its total cost.

Other factors to take into account include:

Maintenance and servicing
Repairs
Equipment inspections
Unexpected costs, like unanticipated facility downtime or other issues
Upgrades and improvements to the equipment
Depreciation over time

Here’s a formula that you can use for this:

(Total cost of a piece of equipment) x (5% / month) x 13 x 80%

How do I assess my competitors’ rates?

Market research is a big part of tailoring your equipment rental rates. (Our calculator has a section where you can enter what your top competitors are charging.)

To do this, you want to take a look at what’s standard in your area for a particular piece of equipment. This involves looking not only at pricing, but at how your competitors are positioned.

When looking at local competitors, you should ask:

How is a given competitor’s brand positioned? Are they positioning themselves as a premium offering, or are they catering more to customers who are shopping on price?
What prices are customers willing to pay for renting a given piece of equipment? What are typical minima and maxima locally?
Is price a big factor in your target customers’ decision making process? (This can depend on what kind of equipment rental you’re offering, as well as what particular piece of equipment you’re analyzing.)

Wrapping Up

If you are in the equipment rental business, it’s important to have a full understanding of how to calculate rental rates, as well as ways to increase your profitability. Using an equipment rental cost calculator can help you determine your break-even point for each item of equipment that you have. Once you know your break-even point, you’ll be in a better position to set your rental rates.

Quipli offers lots of insight geared towards assisting equipment rental companies who want help in growing their businesses.

Our software includes equipment reservation management, inventory management, and a reporting & utilization data tool. All of these modules can help you put your best foot forward for your equipment rental business. For a free demo of our equipment rental software, contact our team today!

Learn About Quipli’s rental Software

How to Calculate Construction Equipment Rental Rates

By Kyle Clements

Published on March 30, 2022

If you are in the construction equipment rental business, it is important to set the rates at which you rent your equipment to ensure profitability. Construction equipment is one of the more expensive types of equipment in a rental business due to its high upfront costs.

If you own a construction equipment rental business, you likely need staff to ensure that your machinery remains maintained and stored when it is not being used. This overhead can add to your regular costs associated with the rental.

How to Determine Your Rental Costs

There are several factors involved when determining how to calculate construction equipment rental rates.

First, you’ll need to consider the market rental rates for similar machinery in your area. You can do this by checking with other companies located within your region. If they offer construction equipment rental, ask them how much they charge for items that are similar to yours. You may also be able to find their rates online.

If you are the only company offering a piece of construction equipment, you’ll be able to set your own rates.

As you progress, you’ll want to make sure that your rental rates for construction equipment remain competitive but still leave you with a profit after you factor in your operating costs. Typical costs associated with construction equipment include:

Leasing payments made to the financing company for construction equipment
Regular costs of maintenance to keep your equipment functional
Overhead expenses, such as storage or staff
Insurance expenditures

Once you have an idea of all of the costs that should be allocated to your construction equipment, you’ll be in a better position to determine your rental rates.

There are several other different components associated with determining your rates. These include the product cost and the cost per rental. You’ll also need to determine the number of days required to rent your equipment before you break even.

What Is the Product Cost?

When determining how to calculate construction equipment rental rates, the product cost will be one of the more important pieces of the puzzle. The product cost is the total cost required to purchase a piece of equipment.

For example, if the equipment you purchased costs $1,500, this will be one part of your total product cost. Other costs involve an allocation associated with each piece of equipment that includes maintenance, overhead, and insurance.

For example, if you determine that your yearly maintenance and overhead costs are $250 for this particular piece of equipment, then your total product cost will be $1,750.

What Is the Cost Per Rental?

The cost per rental is equal to the amount that you can expect to charge for the construction equipment each day. If the average market rate for a piece of equipment is $150 in your area, this is the amount that you would set your rental prices to be.

What Is the Number of Rental Days Required to Break Even?

The number of rental days required to break even is simply the product cost divided by the cost per rental. In our example, it will be equal to $1,750 Product Cost / $150 Cost Per Rental = 11.67 Rental Days. Thus, you will need to rent your equipment for 12 days before you break even and begin to accrue a profit.

Examples of How to Calculate Construction Equipment Rental Rates

Provided below are examples of how to calculate construction equipment rental rates for three of the most popular types of rentals:

Scaffolding

Scaffolding is a type of construction equipment that is typically needed during exterior renovations. For example, if a client is currently repainting a building, they may need scaffolding to support their contractors to stand on and hold their supplies while working on areas above the ground.

To determine how to calculate construction equipment rental rates for scaffolding, search your local market to determine what other companies are charging.

Averages are generally between $15 and $40 per day but will vary according to location, the type of scaffolding required, and its length. If the market costs align with your product costs, the rental rates will be reasonable.

For example, if your product cost is $1,000, and the cost per rental is $40 per day, you will break even on your scaffolding purchase after renting it for 25 days.

Forklift Rental

The second most popular equipment rental is a forklift. A forklift requires a lot of outlay to initially purchase but can be quite lucrative depending on the market demand. Since many construction companies don’t require the use of a forklift daily, they will prefer to rent them to save on costs.

The average initial forklift cost is between $15,000 and $25,000, and the market rental rate will depend on your competitors and the amount you can afford to charge without losing profit. In most markets, a forklift can be rented for between $150 and $400 per day.

Assuming that the forklift you purchased costs $20,000, and the additional costs for overhead relating to it are $2,500, your product cost is $22,500. If you charge $400 for the rental, you will break even after renting the machine for 56.25 days.

Trencher Rental

A trencher is used to dig long, narrow trenches for landscaping purposes. Their initial cost can vary significantly depending on the type of trencher purchased and how it is used. The more expensive models can be over $50,000, while inexpensive versions may be obtained for a little over $2,000.

Assuming you purchase a trencher that costs $30,000, you’ll need to allocate the additional costs that your trencher will incur to arrive at a final product cost. For example, pretend that your allocated costs are $5,000, resulting in a product cost of $35,000.

The average rental rate of a trencher will vary depending on the type of model and the location where you are renting it from. Average rental rates are between $125 and $300 per day. If you choose to rent your trencher for $300 per day, you will break even after $35,000 / $300 = 116.67 days.

Are You in the Construction Equipment Rental Business?

Figuring out how to calculate construction equipment rental rates is just one part of ensuring smooth daily operations for your company. Quipli offers all-in-one software designed to meet your company’s equipment rental management needs. Contact us to learn more about our services and see a free demo today!

GET STARTED WITH QUIPLI’S CONSTRUCTION EQUIPMENT RENTAL SOFTWARE

State of the Industry: Resilient Rental Industry Ready for 2022

By Kyle Clements

Published on March 24, 2022

2022 is an exciting year to be in the rental business. In this article, ForConstructionPros talks about industry trends, growth trends, and upcoming challenges to the rental industry.

Quipli’s CEO Kyle Clements talks gives his perspective on the top movements in the industry for the year:

● The power of the internet

● Empowering local entrepreneurs

● Focus on utilization

How to Rent Out Equipment – Your Step-By-Step Guide

By Kyle Clements

Published on March 18, 2022

Do you have construction equipment rental business ideas that you aren’t sure how to realize?

Starting your equipment rental business takes planning and execution. To find success, you must manage inventory, and market your business well.

To start your business on a great foundation, we share this step-by-step guide on how to rent out equipment.

Evaluating the Market

Whether you’re interested in starting a tool rental, or heavy equipment rental business, you need to know who your target customers are. What’s the most rented equipment type in your area? Is there a demand for equipment rentals? These are all important questions that you should find a definite answer to.

An important part of how to rent out equipment is choosing the right equipment type to cater to your local market. If your area doesn’t see much new construction but plenty of renovations, then you should focus on lighter tools instead of heavy equipment. Every local area is unique, and evaluating the specifics of the market is key to your success.

Pricing Your Rentals

Once you’ve determined what types of equipment are in demand in your area, you need to establish your rental business profitability. To do so, you’re going to have to decide what you’re going to charge for your rentals. This task can be more challenging than it might seem.

The primary factor behind your rates is going to be what the market is willing to pay. You can look at similar rentals in your local area (or the broader region) to find this out. If it’s cheaper somewhere else, then you won’t get much business. The other major factor in deciding your costs is going to be how much revenue you need to be profitable.

Determining Your Costs

Your revenue has to be weighed against the costs of running your business. If you’re renting out equipment for profit, you’re going to have a variety of expenses. First, there’s the capital investment of buying equipment to rent out. Depending on whether you’re going with general tools or heavy equipment, this can be a significant investment.

Property for your business is going to be another significant cost. You’ll need to rent some kind of property to serve as your storefront, equipment storage, and maintenance shop. Further costs can include wages as your business grows, utilities, insurance, maintenance, and more.

Acquiring Inventory

Once you have determined your potential revenues and costs and found that your tool rental business plan can be profitable, you can move forward with acquiring inventory. You want to ensure that you get quality equipment while keeping costs as low as possible.

In some cases, used equipment can be a viable option. It really depends on the specific type of equipment. If your equipment rental business will have large numbers of the same type of equipment, you can consider reaching out to mid-level distributors for better deals rather than relying on retail dealers.

Learn How Equipped Saved 10 Hours a Month by Automating Inventory Management with Quipli

Read Our Case Study

Insuring Your Business

Insurance is important for many businesses but absolutely essential for rental businesses. Your insurance will protect you in several circumstances. The first is when equipment is damaged, but liability can’t be placed on the customer. This insurance can really save your business a lot of money on equipment replacement costs.

Second, your insurance will protect your business from potential liability for improper use of your rented equipment. If a customer were to cause significant damage to a building or property with your equipment, you could find your business under fire at some point in the legal proceedings. Insurance can protect you from this scenario.

Establishing a Maintenance Routine

Once your business is in swing, and you’re starting to rent out your heavy equipment, you’ll have to settle into a regular maintenance routine to keep it running. Different types of equipment have unique maintenance requirements. Keeping up with them is essential to maintaining both your inventory and your reputation as a rental business.

Another key component of your maintenance plan will be ensuring that customer maintenance requirements are communicated clearly. Many types of heavy equipment have active maintenance requirements that need to be carried out during the course of a regular working day, and customers need to know what their responsibilities are.

Marketing Your Rental Business

With your business now running properly, it’s no time to get complacent. You should always be focused on growing your business and bringing in new customers. To do so, you’ll need an effective marketing strategy that targets your potential renters. There are plenty of different options that you can take advantage of.

You should have a website that includes search engine optimization so that it comes up higher in search rankings. Social media can also play a role and make your business easier to find. Don’t discount traditional marketing tactics like brochures, print ads, and flyers, either. You might even consider billboards or bus ads, depending on your area.

Writing a Proper Rental Equipment Agreement

It’s important to ensure that you’re properly protected while running your business. That’s why you have insurance, a proper rental equipment agreement, and an equipment rental business license. Your rental contract establishes the roles and responsibilities of you and your customers, and it’s critical that you get it right.

A rental equipment agreement will protect you from costs due to negligent use of equipment by your renters. It also serves as an essential record of rental rates and schedules. You can check out our convenient rental agreement template to make sure you’re covering all of your bases.

Start Your Rental Equipment Business Right with Quipli

With so much planning and commitment going into your equipment rental business, you should implement the best possible inventory and reservation management system.

Quipli provides rental businesses with an easy-to-use and versatile solution that integrates your inventory with online reservations, along with other benefits. You can reach out to our team today to book a demo and find out what Quipli can do for your equipment rental business.

BUILD YOUR RENTAL BUSINESS WITH QUIPLI’S EQUIPMENT RENTAL SOFTWARE

Protect Your Business with This Equipment Rental Agreement Template

By Kyle Clements

Published on March 18, 2022

Careful planning is the most important thing when starting and growing your rental business. This planning needs to cover the company from every angle — logistically, technically, and legally. Nothing should be left to chance when it comes to your business.

Developing a formal construction equipment rental contract is a vital task that your rental business needs to start offering equipment rentals. While this might seem like a challenging task, we’ve got some clear guidelines to help you out.

What Is an Equipment Rental Contract?

Just about every kind of business out there relies on some sort of contract to nail down what exactly the service being provided entails. Defining this agreement is important to prevent confusion between companies and customers and to provide evidence of the nature of the contract if legal action ever needs to be taken.

A construction equipment rental contract is similar to the contracts many businesses deal with but covers both customer and business responsibilities. Considering that you have valuable equipment on the line every time you rent it out, you want your equipment rental contract to be ironclad and incredibly clear.

Need an airtight rental agreement template? click here to learn more

What Should an Equipment Rental Agreement Include?

Your construction equipment rental contract needs to clearly define the terms of the rental or lease in question. It is imperative not to overlook any details when preparing an equipment rental agreement because any ambiguity could end up being decided in favor of the customer if you ever face legal action.

Of course, you also want your equipment rental contract to be clear to make customer relations go smoothly. If a customer understands all of the terms of the rental clearly, they won’t end up disappointed or dissatisfied by any misunderstandings.

To protect yourself legally and keep your customers happy, make sure your construction equipment rental contract includes the following:

The Specific Equipment to Be Rented

Your equipment rental contract needs to specify very clearly what particular equipment is being rented. You don’t want to ever have to deal with a customer returning a similar but different piece of equipment and having only your word against theirs to rely on. Keep in mind that this should include any accessories and attachments as well.

The Length of the Rental

The construction equipment rental contract needs to define how long the rental term will be. Is the user renting your equipment for a day, a month, or indefinitely?

The return deadline should be clearly stated. If you’re arranging without a set end date, you’ll need to define additional terms for billing and what constitutes the end of the lease.

The Rental Rate

Of course, your agreement needs to define what the price is for the rental. This section should include a complete breakdown of the costs, not just a total. The rates should be set for each piece of equipment and be listed as the per day, per hour, or week rate. Don’t forget to be clear about accepted payment methods as well.

Limitations and Liability

Part of running a construction equipment business is dealing with the regular wear and tear and consequent maintenance involved. However, your agreement should have clear limitations defining what is and isn’t allowed, holding the customer liable if they damage the equipment through negligent or inappropriate use.

Insurance Responsibilities

Insurance is one of the most complex aspects to deal with when defining a rental agreement. The contract must identify who is responsible for equipment insurance. Does the customer need to acquire their own insurance, or does your equipment rental business insure the equipment during rentals?

Transportation Arrangements

Every agreement should clearly state who is responsible for transportation. This section is one of the most common sources of disputes between customers and rental businesses, whether the equipment needs to be picked up by the customer or dropped off by the company.

Termination Provisions

As the owner of the equipment, it’s in your best interests to include some provision for terminating rentals at will. This section will allow you to demand the return of equipment in some extenuating circumstances.

Without these terms, you could find yourself without any recourse if you know that customers are misusing equipment or breaching renting terms and conditions.

Renewal Options

With construction equipment, the actual duration that contractors need equipment can vary widely from their initial estimates. This variability means that they could require the rental longer.

Contractors will often look for businesses that provide attractive renewal options. Your agreement should define renewal rates and notice periods for extending the rental.

Maintenance Responsibilities

Most types of construction equipment require regular maintenance that would fall within the typical duration of rental agreements. It’s essential to define these maintenance responsibilities to avoid negligence from customers leading to equipment damage without your rental business having any effective recourse.

Warranties

The warranties defined in your rental agreement show what the primary expectations for your equipment rentals will be in terms of equipment quality and condition. In general, this protects the customer more so than the business. Many customers will be unwilling to rent without well-defined warranties guaranteeing that equipment works as intended.

Contact Us Today to Purchase a Rental Agreement Template

There’s a lot to keep in mind when setting up rental agreements for your rental business. We can make things a bit easier with this handy downloadable rental agreement. Of course, make sure to look over it carefully and ensure that it’s in line with the terms you want to set for your construction equipment rental contract.

Starting Your Construction Equipment Rental Business Off on the Right Foot

Having a reliable equipment rental agreement is an absolute must for your business, but there’s so much more that goes into running that business well. Reservations and inventory management are two of the most important areas to handle properly if you want to succeed.

Quipli provides rental businesses with a dedicated platform for seamless inventory and rental management, along with a point of sales system and digital growth tools for growing your business. Just contact our team today to book a demo and see what we can do for you.

START YOUR EQUIPMENT RENTAL BUSINESS WITH QUIPLI’S SOFTWARE TODAY

How to Create an ATV Rental Business Plan

By Kyle Clements

Published on March 17, 2022

ATV rentals are on the rise across the United States and abroad, and online searches for rental services have increased each year for the past four years running. There’s no reason to believe that this trend won’t continue — the timeless thrill of ATV rentals will always draw in adventurous customers.

If you’re looking into how to start an ATV business, you need to develop an effective ATV rental business plan. This will ensure that you fully understand what it will take to make your business succeed, and serve as an essential step in finding financing for your new business.

ATV Rental Industry Overview

Researching how to start an ATV rental business has probably left you familiar with the industry overall, but anyone you’re showing your ATV rental business plan PDF to might not be.

Place the industry overview at the start of your business plan to bring the reader up to speed with the ATV rental industry as a whole. By including some information about how ATV rentals are growing across the country or within your region, you can inspire confidence in the success of your venture.

Now you’re establishing a good foundation for showing any potential source of funding that your business can thrive.

Your Executive Summary

Once you’ve given the reader a brief overview of the industry, communicate the highlights of your ATV rental business model quickly and concisely. The executive summary contains key details about your business model, pricing, and more.

While this goes near the start of the business plan, you’ll actually put this section together last. It’s a summary of the contents of the rest of the business plan, so you’ll need to have all the other parts finished before you begin.

Your ATV Rental Services

In this section, you define what services you’re going to offer. You can flesh out your ATV rental business ideas in more detail here.

Consider these questions:

What class ATVs are you providing?
Are ATVs rented hourly for on-site trails, or extended off-site excursions?
Do you rent out helmets and other gear?
Do you have any accessories available for purchase?

When it comes to establishing your business plan, just saying that you’re going to rent ATVs doesn’t provide the necessary detail to determine your potential ATV rental profitability. You must be specific with your plans.

Your Mission Statement

You might not have thought about your mission statement when researching how to open an ATV rental store, but it’s still an important part of your business plan. This should say a bit about the principles on which you’re going to run your business.

It’s best to keep things simple when it comes to your mission statement. For ATV rentals, in particular, you can include that you want to provide an exciting experience while maintaining safety.

The Structure of Your Business

With this section, you’re getting into some of the finer details of your ATV rental business start-up.

Before moving any further, you need to decide who is going to do what in your business. Whether you’re going to have employees (and how many) will have a huge impact on your overall plan.

There are core responsibilities for any ATV rental business, and you need to know who is going to handle them. Who performs maintenance? Who cleans the ATVs? Who is dealing with marketing?

Performing a SWOT Analysis

A key feature of modern business plans is the strength, weakness, opportunity, and threat (SWOT) analysis. Here, you can identify how your ATV rental business is situated for success. You can discuss the demand in the area and other factors.

It’s just as important to discuss potential weaknesses and threats, in order to prevent and react to them. Is there a lot of competition in your area? Is there a risk of extended inclement weather reducing rentals?

Sales and Marketing Strategies

A big part of how to open an ATV rental store is properly marketing your business to drive growth. Marketing is important for establishing your business and keeping it going. You should identify specific strategies and platforms you intend to use for your business.

For ATV rentals, you should understand who your key rental demographics are. This can vary depending on your area and what renters will likely be using your ATVs for, whether that’s touring local trails or more serious off-roading.

Sales Forecasting

Are ATV rentals a profitable business? The biggest deciding factor for your business will be your sales. That means you should have some forecast in place before you actually start your business in order to gauge profitability.

Sales forecasting is a challenge in any industry, even for well-established businesses. You can look at companies in surrounding areas to see how they’re doing to put together a rough estimate and include projections based on your expected inventory for different use rates.

Choosing Your Pricing Strategies

How much does an ATV rental business make? That’s going to depend largely on your pricing strategy. You need to have a coherent pricing strategy in place to make sure you’re getting the returns you need to justify your ATV inventory investment.

Developing an effective pricing strategy will involve balancing what your customers are willing to pay with the income you need to keep your business running. If you can’t get this to work on paper in your business plan, then chances are your business idea isn’t going to pan out.

Evaluating Your Business Expenses

Any good business plan should have a detailed list of anticipated expenses. This should cover everything you need to run your ATV rental business, including wages, acquisitions, insurance, and more. You don’t want to find out about any unexpected expenses after the fact.

How to Grow an ATV Rental Business with Quipli

Setting up an ATV rental business plan is the first step, but once you get started, you need to know that you have the correct tools to grow your business.

With Quipli, you have access to a website builder that works seamlessly with our integrated reservation and inventory system.

Book a demo with Quipli today to see what we can do.

Build YOUR BUSINESS WITH QUIPLI’S ATV RENTAL SOFTWARE

What Your Rental Website Builder Needs to Help You Run a Successful Business

By Kyle Clements

Published on March 17, 2022

Businesses rely on their websites much more today than they did a decade ago. They’re more than just digital business cards now, with so much going into building an effective website. To do so correctly, you’re going to need to find the right website builder for your business.

Easy-to-Use Website Content Management Systems

When evaluating different equipment rental website builders, ease of use is going to be near the top of the list for anyone who doesn’t have extensive website experience. There are many options out there with templates, drag-and-drop functionality, and other features that make the once-difficult task of website building accessible to anyone.

Key Ease of Use Features

There are some features you really shouldn’t be without. Ideally, you’ll find a website builder that has an available customer service team to help with the builder. Here are some of the other key features that you should be looking for to make your website building experience go smoothly:

One-Click Page Composer

You should be able to make a new page with just one click or something close to that. Good website builders have pre-made templates to suit just about any potential need. These website templates should make it easy for you to create modern and user-friendly web pages in no time.

eCommerce Capabilities

Different website builders allow for varying levels of integration with your business. Since your website is for your rental company, you need a website builder that makes eCommerce integration easy with specific templates for that function.

SEO Features

Search engine optimization (SEO) involves catering your website content to what search engines recommend to their users. This design approach involves putting keywords in the right places, including content that is only viewable by search engines. A good builder makes this task incredibly straightforward. Find out how Quipli’s digital growth products can work for you!

Fully Responsive Sites with Mobile Optimization

Most users make the decision to stay on or leave a certain website within 15 seconds. If your website isn’t fully loaded and completely functional within that time, then your customer is gone. A good website builder has the fully responsive layout needed to make things easier for your customers.

You also need to make sure that your website builder optimizes for mobile users. Search engines like Google place a high value on mobile optimization, and over 60% of search traffic comes from mobile devices.

Ability to Add Product Listings, Category Pages, and Subcategory Pages

Most rental businesses start small and grow over time. Your business is sure to add more equipment as time goes on, likely branching out into other categories. Updating your website to reflect these new product listings shouldn’t be a challenge. Instead, your website builder should handle this practically automatically.

It should be just as straightforward to save your rental equipment in different categories as it is with any other eCommerce venture. Quipli makes it even easier with the ability to import product information and categories from an Excel spreadsheet. Our software updates your product listings without any difficulty at all.

Straightforward Payment Integration

Of course, a big part of running any business is getting paid. You need a website builder that lets you accept bookings and payments from a wide variety of sources. It isn’t enough to only accept a credit card for online payments. Many customers will simply move on to a competitor with more versatility.

Today, there are countless options like Stripe, PayPal, and more for online payments. You need an integrated payment system that can let customers pay how they want. Quipli does just that while also making a seamless connection between online reservations and in-person pickups.

Equipment Inventory and Reservation Management

Inventory management is a vital part of any rental company’s day-to-day operations. Given how many customers prefer to book online today, the only way to meet those needs is to have your website builder include an integrated inventory and reservation management system.

Syncing your inventory and reservations is something that needs to be done automatically to avoid mix-ups. You can’t have two separate systems running online and in-person reservations — you need your website to be fully integrated with your inventory.

Rental Software with CRM Integration

Customer relationship management (CRM) is essential for any business to succeed. This need is particularly pronounced in many types of rental companies where repeat customers are among the top sources of business. Many tools can improve your CRM, and you should choose a website builder that integrates those tools.

Among the most important aspects of CRM is to capture valuable data from customer interactions. This capture includes getting email addresses from customers and visitors to provide a direct link for email marketing. If you aren’t using these resources, you’re missing out on one of the most valuable marketing tools available today.

Blog Features

Blogs might seem like they have gone out of style, but they are a very important part of how businesses market themselves online today. You need a website builder that makes it easy to create, manage, and optimize blog posts for your rental business.

All of the content on your website plays a role in search engine rankings. Blog posts are a great way to target specific keywords to cast a wider net and funnel more potential customers through your website.

Customer Support for the Rental Website Builder

Many website builders online today have little to no customer support available. That’s a position that you don’t want to be in as a business that relies on its website for reservations. If your website develops issues, you need to know that there’s someone you can consult with to resolve those issues.

Get Started with Quipli’s Rental Website Builder

Quipli provides all-in-one rental business software for equipment rental businesses. Our software features a built-in website builder that works seamlessly with our inventory and reservation management solution.

The Quipli website builder is easy to use and has all of the features you need to run your business, including our integrated point of sale (POS) system. Contact Quipli today to set up a demo and find out more.

CREATE YOUR OWN STOREFRONT WITH QUIPLI’S POWERFUL WEBSITE BUILDER

How You Can Start Your Own Golf Cart Rental Business

By Kyle Clements

Published on March 17, 2022

A golf cart rental business could be an excellent choice for your next small business idea. These businesses can be highly profitable if you’re situated in a good location and run your operation right. With a good golf cart rental business plan in place, you could see your new venture become very profitable very quickly.

How Does a Golf Cart Rental Business Work?

You might think that golf carts are strictly the domain of golf courses, but that couldn’t be further from the truth. Your golf cart rental business ideas aren’t restricted to the sport itself at all. Golf carts are one of the most popular options for transportation in a wide variety of locations.

When figuring out how to start a golf cart rental business, one thing to keep in mind is that you need customers. Your primary revenue will be from renting out golf carts to drivers. In almost every case, those drivers are going to be tourists.

Golf cart rental businesses are predominantly found in areas with high tourist traffic. Most tourist areas will have the necessary density of attractions as well as pathways, boardwalks, and other routes that are perfect for golf carts.

The location is the primary factor in determining “how much does a golf cart rental business make?” If you have a steady stream of tourists and visitors renting your golf carts to enjoy local attractions and scenery, then this could be the perfect rental business idea for you.

What Is a Golf Cart Rental Company’s Business Model?

When it comes down to how to run a golf cart rental business, you need to understand how the business model works. That means you’ll have to understand what your revenue streams and costs will be.

In terms of costs to get started, you’re going to have to buy some golf carts. These can vary widely in price depending on the brand, style, features, and whether you buy new or used.

The other primary consideration is going to be where you keep your carts. You’re going to have to buy or rent property to store your carts and serve as your place of business. Identifying a suitable location will be one of the most considerable challenges because prime locations are expensive.

Your primary source of revenue will be rentals. Most golf cart rental businesses will charge by the hour, half-day, or day. To determine your golf cart rental profitability, you’ll have to weigh this revenue against all of your costs. Some golf cart rental businesses will also offer beverages and snacks.

What Are the Costs of Running a Golf Cart Rental Business?

In addition to the golf cart rental business start-up costs, you’ll also have various ongoing costs that can affect your golf cart rental business model. Understanding all of these costs is essential before committing to your rental business idea.

Maintenance is likely to be a considerable cost for your business. Like any vehicle, golf carts require regular maintenance to stay in working condition. You’ll have both recurring maintenance costs and unexpected maintenance costs when you have to replace broken parts. Customers will expect your carts to be clean and operational.

Your golf cart rental business should also invest in a tracking solution. You need to know where your carts are at any time to prevent theft. GPS tracking is the standard, with various solutions available on the market.

Replacing carts as needed is another significant cost. Eventually, every golf cart reaches a point where it needs to be replaced. Ignoring this cost in your business plan will eliminate any chance of profitability.

In addition to these specific costs, you’ll have the regular expenses of any business. If your business is more than just yourself, you’ll have to pay wages. Your golf cart rental business will need vehicle liability insurance. There will be taxes, utilities, accounting fees, and the costs for any other services or solutions you need.

How Can My Golf Cart Rental Business Reach Customers?

If you’re wondering how to grow a golf cart rental business, you can take advantage of plenty of unique opportunities. For example, if your business is in a tourist location, some effective tools can be traditional brochures and posters.

Hotels and other establishments encourage local attractions to provide brochures for their lobbies to attract tourists. You can also reach out to tourist spots themselves to promote your golf cart rentals. Any business that might receive more traffic if tourists can get around more quickly will be happy to help you.

Of course, there’s no getting around web marketing today. You’ll need an website that’s optimized and easy to find. It’s in your best interests to come up first whenever someone searches for transportation options in your area. Digital marketing for equipment rental businesses is crucial in this space.

What Are Some KPIs I Can Use to Understand How Well My Golf Cart Rental Business Performs?

Are golf cart rentals a profitable business? While they often can be, you need a way to know how well your business, in particular, is performing. To do so, you can use some common rental business key performance indicators (KPIs) to evaluate your business.

Time Utilization

This metric measures the hours your carts are rented out against the hours they’re available. You can use it to identify your strongest and weakest inventory items.

Customer Acquisition Cost

This data measures how much you pay in marketing to acquire customers. Comparing the cost for different referral methods can guide your marketing strategy.

Return On Investment

This figure represents the total revenue from a cart compared to its purchase and maintenance costs. It shows the lifetime profitability for your various golf cart options.

Of course, there are many more metrics that you can use to gauge how well your business is doing. By applying a wide variety of KPIs, you can get the best picture of your business.

The Importance of Reservation and Inventory Management

Every rental business needs a way to take reservations and manage its inventory. You can make running your golf cart rental business that much easier with Quipli, an integrated reservation and inventory system that automates the entire process and provides additional tools.

Contact Quipli today to find out more about our equipment rental website templates and our integrated rental pos system.

BUILD YOUR BUSINESS WITH QUIPLI’S GOLF CART RENTAL BUSINESS SOFTWARE

How to Improve Your Tool Business Profitability

By Kyle Clements

Published on March 17, 2022

How to Improve Your Tool Business Profitability

Are construction equipment rentals a profitable business? Well, they certainly can be. The key is to make sure that you have an effective rental business plan in place for improving the profitability of your business. With these actionable steps, you can start your new company off right or revolutionize how you run your established business.

1. Study Your Equipment Rentals Target Market

Among the most important aspects of starting any business is defining who your target market is. You need to know who you’re going to be renting to so that you can get the right inventory and apply the right marketing strategies.

For some of the top equipment rentals, this mostly revolves around the scale of the equipment you’re renting out. Are you going to be renting excavators to contractors or tile saws to homeowners? Keeping your inventory focused on a specific niche can help make your business more profitable.

2. Know How to Price Your Tools to Be Profitable

Pricing is one of the most challenging tasks when it comes to establishing your tool rental business. For the most part, you’re going to have to make sure your prices are in line with your competitors’. If you’re charging more, your customers will likely go elsewhere.

However, make sure that the tools you invest in can be profitable at the rental rates you can charge. You can use our equipment rental calculator when developing your tool rental business plan PDF to get a more accurate view of your potential profitability.

3. Develop an Effective Tool Rental Business Website

Your tool rental business model should include having an effective website in place for your business. Many people today prefer to seek out information about companies online. Having a good website makes you easier to find, especially if you take the time to focus on improving your search engine rankings.

If you don’t have a website, you should get one now. Find a good website builder that has the eCommerce functionality you need. Quipli provides a website builder along with our integrated inventory and reservation software, making it easy for your customers to reserve rentals online.

4. Grow and Scale Your Tool Rental Business Through Digital Marketing

Digital marketing is among the most effective tools for how to grow an equipment rental business. While most rental companies can still benefit from conventional marketing like billboards, newspaper ads, and radio ads, digital marketing isn’t optional anymore. It’s a necessary part of your marketing strategy and can focus on areas like:

Search Engine Optimization (SEO)

Your website doesn’t just cater to customers but to search engines, as well. Using the right keywords and metadata can increase your rankings and get you more visitors.

Pay-Per-Click (PPC)

Along with organic growth, search engines and social media give you the option to pay for advertisements. Google, Facebook, and other platforms have a simple model where you pay based on how many users click on your ads.

Social Media

Facebook, Instagram, YouTube, Twitter, and more are simple ways to get information about your business to your customers. Each one serves as one more potential entry point for customers to find your website.

Many strategies can be used to improve your digital marketing. It’s important to keep track of the analytics that advertising and social media platforms provide. That way, you can find out what works and what doesn’t when it comes to driving customers to your business.

5. Keep Investing in New or Used Equipment

You can make your tool rental business profitable by scaling up your inventory. With more equipment to offer, you’ll be making more money while some costs stay constant. That translates to more profit at the end of the year.

Both new and used equipment can be great ways to reinvest money into your business. Determining whether new or used is the best deal varies between specific types of equipment. Keep in mind when investing in new equipment that your existing equipment will need to be replaced at some point.

6. Maintain Quality Working Construction Tools

Like in any other business, the quality of the goods or services you provide for your customers is paramount. You need to ensure that every customer is receiving working, well-maintained equipment.

This will help drive more business based on your reputation. Keeping up with maintenance also makes your equipment last longer, reducing replacement equipment acquisition costs and improving margins.

7. Have Proper Tool Insurance and Liability Waivers

Not having the right insurance and liability waivers can cut into your tool rental profitability when you end up having to pay for damages that would have been otherwise covered. Damages can extend beyond the cost of replacing tools, so you need to make sure that your business is thoroughly protected.

Insurance is one area you want to have clearly defined in your tool rental business plan. The prices you’ll pay will vary depending on whether you’re renting full-scale construction equipment or smaller home-improvement or landscaping tools. Typical rates range from $500 to $1,500 annually per $1,000,000 in liability protection.

8. Focus on Customer Service and Repeat Business

Customer acquisition costs can be steep and are a major factor in answering the question, “Are tool rentals a profitable business?” You want to maximize the value from each customer, and that means doing everything you can to drive repeat business.

You can improve customer retention by:

Having clear communication to avoid disappointment
Offering customer-loyalty discounts for high-volume clients
Making sure your tools are provided in great condition

The value of repeat customers shouldn’t be underestimated, so you can always do a bit more to make sure they’re coming back.

9. Invest in Tool Rental Software

No matter what kind of business you run, you need the right tools for the job. When it comes to equipment rentals, you need the right software to manage your inventory and reservations. This lets you stay organized and provides you with clear and accurate data so you can understand how your business is doing.

Quipli has the rental business software you need to improve your profitability. With a fully integrated reservation and inventory system, you can rest easy knowing that your rentals are properly managed. You can contact Quipli today to book a demo and find out more.

GET STARTED TODAY WITH QUIPLI’S TOOL RENTAL BUSINESS SOFTWARE

What You Need to Know About the Latest Construction Equipment Trends

By Kyle Clements

Published on March 17, 2022

The construction equipment rental business covers a broad range of categories. A construction equipment rental business can rent to both contractors and homeowners, with equipment available in many different sizes for a variety of jobs.

Construction equipment trends appear to be headed upward for the immediate future. That means more rentals across the board. However, not all categories of equipment rentals are seeing the same increase. Here’s a look at how the top ten equipment rental categories are performing, based on Google Trends results.

Scaffolding Rentals

Scaffolding rentals have seen a strong 2020 and 2021, much like other construction equipment trends. Used in many different types of construction projects, from all-new construction to home renovations, scaffolding rentals see a relatively constant demand throughout the year.

With most scaffolding rentals peaking around late summer and early fall, it’s still too early to say exactly how 2022 will go. That being said, the early numbers show a stronger later 2021 to early 2022 than the industry saw the year before.

Forklift Rentals

Forklift rentals are one of the rare reversals when it comes to expected construction equipment trends for 2022. The disruption of many warehouses due to supply chain issues means that we could see the demand for forklifts drop in 2022.

Of course, that drop is coming down from record highs in the fall of 2021, so it’s more like forklift rentals are returning to their natural trend. However, the difference between the 2021 peak and the expectations for 2022 is considerable.

Trencher Rentals

Trenchers are used in a wide variety of different projects, and that includes homeowners trying their hand at DIY landscaping and drainage projects. Because of this, trencher rental interest reached an all-time high in the summer of 2020, during a time that saw many residents taking on home-improvement projects.

These construction equipment trends were the same for categories with significant residential use. In 2021, there was an increase from the years before 2020, and interest is expected to be high in 2022 as well, just not as much as we saw in 2020.

Lift Rentals

Lift rentals have seen very gradual growth in recent years, remaining steady compared to other construction equipment trends. Including a variety of standard, articulating, and telescopic boom lifts, this type of equipment is constantly in demand in many industries.

The end of 2021 saw a considerable spike in lift rentals, although it’s unclear at this time if the spike will continue, or if lift rentals will return to their usual trend. While there has been some decrease following the initial jump, interest is still up.

Scissor Lift Rentals

Scissor lifts generally follow similar construction equipment trends to other lift rentals, and have remained steady over the past five years or so. However, there’s been a dramatic spike since the end of 2021. Search interest more than tripled before dropping down to more reasonable (but still high) levels.

With so much interest in scissor lifts, the upward trend is expected to continue into 2022. While the extraordinary spike might not be seen again for some time, it seems that scissor lift rentals are on the rise.

Auger Rentals

Auger rentals are widely used for many purposes, but some of the most common include digging holes for deck or fence posts, along with other residential landscaping and construction purposes. As such, the summer of 2020 saw a huge spike for auger rental interest, similar to other construction equipment trends.

In 2021, there was reduced interest from 2020 for auger rentals, but the trend remained good overall. This leaves the potential for some growth going into the summer of 2022, with a solid foundation based on above-average fall months in 2021.

Mini-Excavator Rentals

Mini-excavator rentals have seen some of the most consistent growth compared to other construction equipment trends, with rentals increasing year over year since 2017. The best year yet was 2021, which maintained growth even over the substantial spike in 2020.

These growth trends are seasonal, with a peak in summer and a significant drop in winter. The summer of 2021 had a significant rise in mini-excavator interest, and 2021 reached new heights, sparking hope for an even better 2022.

Excavator Rentals

Excavator rentals are used mainly by contractors and saw a smaller 2020 bump than other construction equipment trends that were more residential in nature. That being said, 2020 did see a boost driven by an increase in construction projects.

That growth continued through 2021, with the summer of 2021 bringing an all-time high in excavator rental interest. The early days of 2022 are also showing an increase over the same time in 2021, so we could see even more growth this year.

Sod Cutter Rentals

Backhoe Rentals

Backhoe rentals are some of the most seasonal rentals out there, with construction equipment trends showing that rentals are considerably more prevalent in summer than in winter.

They also saw some of the largest increases in interest during 2020, with a spike over 2019. Summer 2021 saw a noticeable decrease compared to the year before but was still up compared to earlier years. It’s still a bit early to say how 2022 will go.

Starting Your Equipment Rental Business Could Be Easier Than You Think

Recent trends show that the construction equipment rental industry is highly lucrative and still has plenty of potential for growth. If you’re looking into starting a business, you need the right tools for the job.

Quipli is an all-in-one platform that provides you with inventory and reservation management, along with an effective ecommerce website builder for your business. Contact our team today to get started!

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