Here are some tips that will help you improve the profitability of equipment rental and manage your business efficiently.
Optimizing the profitability of an equipment rental business is a key challenge for industry professionals. From cost management and maximizing utilization rates to customer retention, every detail matters when it comes to increasing revenue and ensuring long-term success. Discover hitech’s five expert tips to improve your equipment rental management, as well as equipment rental software that will allow you to manage your business smoothly and efficiently in this competitive market.
5 tips to improve equipment rental management
Here are five key tips to improve equipment rental management and run your business with peace of mind.
Sell underused equipment
For better equipment rental management, set a minimum usage rate target for your equipment fleet. For your larger equipment, the utilisation rate should approach 70%. For more “common” equipment, the utilisation rate should be around 100%. At least once a month, record equipment usage rates by equipment using your equipment rental software. Determine which equipment has a usage rate of less than 40% and remove it from your fleet if you do not see improvements within 60 to 90 days.
Sell units that have maintenance problems
Using your equipment rental software, determine which equipment has a care and maintenance cost equal to or greater than 10% of their annual turnover. Talk to your technicians and your workshop, if they believe that these maintenance and repair expenses will continue, it could mean that it is time to sell the equipment concerned. Broken equipment does not bring in any money and damages your reputation.
Extend the life of some of your equipment
In general, trucks and trailers have long service lives. Many equipment continues to be profitable well after their traditional replacement cycle. In economically difficult years, national rental companies extend the age of their fleets in order to reduce their investments. Be sure not to extend the life of equipment that is not expensive to maintain.
Consider purchasing used equipment in good condition
You have the opportunity to minimise your expenses by investing in second-hand machines. This can help you maintain cash flow and limit your debt. Used equipment from 1 to 4 years old will bring you about the same as the same equipment, new. Sometimes, a small investment in a used machine is all it takes to restore it to new condition in the eyes of your customers.
Complete your offer with other rental companies
Rather than investing in a machine that is not often asked of you, develop a partnership with another equipment rental company that owns the machine. You can rent it to him in order to rent it back to your customer. This way, you can expand your offer without investment. Make sure that you can make a comfortable margin and pay particular attention to the rental conditions with your colleague and the condition of the equipment on departure and return.
How to optimize equipment rental profitability?
You can easily optimize equipment rental profitability with the right software. Yet, many rental businesses still operate without dedicated equipment rental software or rely on inefficient tools. It’s clear that using a notebook and pen will never be as effective as a comprehensive, feature-rich solution. However, in a competitive market, these approaches can lead to errors, inefficiencies, and missed opportunities. A comprehensive rental management solution allows you to automate key processes, track your fleet in real time, and improve decision-making. Find out how to choose the best rental management software on hitech’s expert rental blog.
Get a demo
