The home improvement business has seen a significant improvement after the global financial crash. As the real estate market improves, so do the necessity for home repairs and appetite for home improvement. One of the segments benefiting from the growth of the home improvement industry is the tools and equipment rental business.
If you have extensive knowledge and interest in construction or home improvement, consider starting a tool and equipment rental business. A tool and equipment rental business aims to provide the right tools to customers, at the fraction of the cost of buying the tools brand-new. Tools can be expensive, and those who need these tools do not necessarily have the knowledge and expertise to use the tools. As a tool rental business owner, you provide customers with access to tools and share with them the knowledge on the tools to use and how to operate the tools.
The tool and equipment rental business has two main target markets:
- Home improvement market, including the do-it-yourself customers and homeowners
- Small business owners, including those who are operating small handyman, contracting, plumbing or lawn care businesses
Think of a home owner who decides to undertake a home improvement project over the weekend. The home owner may know what he wants to accomplish, but may not know the breadth of tools available to help him complete the job. Instead of buying the tools (and run of risk of buying the wrong one), it may be more prudent to simply rent the tool to complete the weekend project.
Renting tools and equipment is a practical solution for homeowners who may need the tools only for a specific home project that they are working on. There is a big demand for tool rentals from homeowners who do home improvement projects infrequently. Homeowners can save money renting, instead of buying, an expensive equipment that will only be used once.
Small businesses also save on costs by eliminating the need for storage, maintenance and parts repair of the tools. Renting also allows small businesses to use the right tools (and its latest version) without spending too much capital. It also enables small businesses to perform seasonal or temporary work using the right tools without the expense of maintaining and storing the tools when the season or job is over. In many cases, the rental tools can even be delivered to the job site with worry-free guarantee. Downtime can also be minimized when the tool breaks down, as the rental company can simply replace the damaged tool.
You can start slow with a small investment, and grow organically. The margins of a tool rental business can be significant: people will pay 20-30% (or more) of the cost to rent for a day or two. Take for example a carpet kicker. Home Depot sells the Roberts Economy Adjustable Knee Kicker for $65, but rents the same equipment for $19 per day or $76 per week. Get someone to rent the tool for a week, and you would have already paid in full for the cost plus a little profit!
Starting a Tool and Equipment Rental Business
A tool rental business rents out tools and other equipment to customers. You provide customers with access to the latest tools and equipment needed at a low cost. You will be responsible for procuring the tools and equipment to rent, maintaining the tools, cleaning the tools, and overseeing the operations of the business. You can purchase the tools, or develop relationships with leasing companies who can give you access to their inventory that you can then offer to your customers.
The first step is to determine who your target market/s will be. Ask homeowners in your area, for example, what tools they typically need, what tools that are likely to rent, and how they use these tools. You need to make sure that you have the tools that they need, instead of tying your capital on tools that your target market seldom use, if at all. Check with them if they are likely to rent these tools to a small business like you, instead of the big boys in the industry.
You also need to look at other tool rental businesses in your area, including those offered by big businesses such as Home Depot. Review the following key aspects of their businesses to help you come up with ways on how you can make your business stand up from your competitors:
- Rental inventory
- Sales items
- Customer service
The location of your business should support the demand for your services, and be accessible to your target market. Initially, you may be able to start this business from your home. However, as your business grows and the number and types of tools you rent out expands, you will need to consider finding a more appropriate location for your business. Find a location that is accessible and visible in the community; bonus will be if the location attracts significant foot traffic.
The facility of your tool rental business will depend on the type of tools and equipment you will offer for rental. You can choose a small area that can house your office management needs plus storage for small tools and equipment; or a larger space if you are storing and renting bigger equipment and even vehicles.