How to Start a Construction Equipment Rental Business
Welcome to the Business Ideas section. Watch this video, I’m going to give you a quick start guide on How to Start a Construction Equipment Rental Business. Over the last decade, the construction industry has experienced phenomenal growth. If you’re looking to make some money and make a difference in someones life, you should consider starting a construction equipment rental business.
Revenue for the Construction Machinery Rentals industry is expected to experience an increase over the next 5 years of about 3%. The industry is driven largely by the construction markets, new and existing houses, and nonresidential buildings such as schools, colleges, government buildings. These kinds of companies also cater to industrial buildings that require special heavy equipment for construction and maintenance.
If you are noticing an increase in construction in your area, there's probably a rising market in your area for equipment rentals. When you start this kind of business you first need to find out what your potential customers are looking to rent. Your first job will be to get in touch with renovators, builders and construction companies.
Ask them what kind of equipment they use most often, which brands they prefer to use and if they are in need of any specific rental equipment right now.
Based on the notes you take and conversations you have begin to purchase your minimum inventory to get you going. One thing you don't want to do is spend money on equipment that no one will ever end up renting. Make sure when purchasing your inventory that you're getting the best deals you can get and at a wholesale cost if possible.
The more customers you can get, the better and faster your business will grow.
Lots of service offerings, which means a lot of money for you!
Market Size: $27bn
Number of Businesses: 4,930
This Industry Employs: 65,240 people
So, here’s what you’ll need to get started:
Step 1 - Get a Business Plan
If you have no idea how an online business is supposed to operate or maybe you are a first time business owner, I'd recommend downloading a business plan from Bplans or getting a custom one created on Fiverr. Their plans outline exactly how this businesses works and what you should expect.
Step 2 - Find a Location to Store Your Rental Equipment
To find a warehouse location, go to google and type in "commercial warehouse for lease" or type in "warehouse for lease near me" or "warehouse for rent near me". You'll need to call around to local real estate agencies who work with businesses. You'll be looking for a good location with good enough storage area to hold multiple machines and doors that are wide enough to accommodate the in-and out. Find a place that works within your budget and sign a leasing agreement.
Step 3 - Choose a Name & Register Your Business
Now, when you've got that sorted, it's time to officially register your business. You won't be able to start working until you complete this step. You'll need to register & apply for a federal EIN Number, and form an LLC or Corporation.
Depending on what state you are in, you will likely also need a reseller or retail merchant certificate as well. This allows you to buy products for the equipment rental business, tax free. I recommend using MyCorporation, as they do have a variety of packages to choose from, but their most basic package will get you started right away.
Most states will require you to obtain a license and be fully insured before opening. Keep in mind, it can easily cost over $1000 to obtain licensing and can take up to 12 months, You'll also need to obtain a quote for business liability insurance. This usually can be general, property insurance, commercial vehicle insurance and workers compensation. This can be done through any service provider like Geico. I would also highly recommend you get with a business lawyer to draft and review your equipment rental agreements.
Once you get your retail merchant certificate from the state, you can buy all of your supplies and equipment at a wholesale price. Here are some of the equipment you will need for your rental business:
Scissor and Forklifts
Skid steers and track loaders
Towable light towers
Legally Incorporate Your Business Today
Step 4 - Open a Business Bank Account
Now, since you're going to be getting all this money, you'll need somewhere to put it. It's pretty easy to open a business bank account, but they won't get you setup without having the legal incorporation paperwork and the EIN number that I just spoke about. You can work with a local bank that you already use or you can just choose a new one. Square also has small business banking and invoicing for new businesses.
Step 5 - Buy Website Hosting
The next step is to buy web hosting. I always recommend choosing Bluehost because they are the most reliable for small business websites. You also get a free domain name, a free ssl certificate and access to 24/7 tech support. So, you really can't beat it.
Buy Website Hosting with Bluehost
Step 6 - Work with a Website Designer
Once you pay for a website hosting plan with Bluehost, you'll get your login credentials.
You'll want to save that information and deliver it to the web designer in the next step. If
you don't know about Fiverr, it's a company that sells affordable web development and marketing services that get done really quick.
You just type in what you want in the search bar, and it will reveal tons of people who are willing to help you get a website up in less than 3 days. Once you choose the person you want to work with, give them the Bluehost login details and communicate your vision and plans for the website.
Find a Website Designer on Fiverr
Step 7 - Setup a Merchant Account to Get Paid
You'll need to activate a merchant account for your customers to pay you through. Many businesses use paypal, square or stripe. I personally like Square, they make it super easy for to accept payments via a pos register system, online via your website or over the phone. I can also send copies of receipts, take customer payments, manage vendors and invoice directly through Square. The account with Square is free, so once you signup, give these login details to the web designer to complete the payment integration process.
Signup for a Free Square Payments Account and
Buy a Customer Management POS system
Step 8 - Get Logo & Online Marketing Materials Designed
Finally, you'll need to start spreading the word about your business. A good place to start is getting a logo, social media graphics and online marketing materials created. For website branding, I recommend 99designs because the process is quick and painless and you actually get what you want and for marketing materials, I like envato, because they literally have tons of graphics for each and every single kind of business, on demand.
Get a Construction Business Logo and Graphics
Get a Construction Business Marketing Templates
Step 9 - Create a Money Game Plan
Since you now own a construction equipment rental business, you can choose from a variety of services to sell. The most popular and profitable services are:
You’ll want to diversify your service offerings because this will help expand your customer reach. To maximize your profits, you’ll can create monthly membership plans or new customer referral discounts.
Step 10- Be Prepared for Startup Cost
Now, I know you're probably wondering...What's the price tag on this baby? Startup costs for this kind of business, is around $75,000 if you are starting as solo entrepreneur, or can be an upwards of $500,000+. This number largely depends on how many employees you hire, payroll, how much money is spent on employee training equipment, insurance, office software, computers, travel expenses, website, equipment storage, business phones, company t-shirts, and marketing.
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About Adella Pasos
This Entrepreneur and Marketing Expert has shared her passion for growing brands from the ground up. She’s worked with Startups, Small Businesses, Fortune 500 Corporations and Entertainment Talent to help them recognize the value of marketing, and give her clients the ability to access their niche market via online, social media, mobile, merchandising, and events.
She hosts the What's Your Game Plan TV show features: Free Expert Advice, and Growth strategies for Business Owners Across the Globe. Access thousands of FREE Tips, Trends & Tools to Move Your Business Forward!
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