Here are some tips that will help you improve the profitability of equipment rental and manage your business efficiently.
In 2016, the construction equipment rental market generated a turnover of 3.76 billion euros divided between 1,493 companies. Here are some tips that will help you 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 your equipment rental management
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.
Efficiently manage your activity thanks to equipment rental software
Many small and medium-sized rental companies still operate without equipment rental software or with very weak tools. It is obvious that you will never be as efficient using a notebook and pen as you are using a complete and feature-rich solution.
Using an adapted equipment rental software allows you to ensure a detailed follow-up of your fleet and an optimal organisation of your activity.
Discover a solution dedicated to the video equipment rental company by clicking here and do not hesitate to contact us if you need more information by clicking here.
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