Managing an equipment rental company is a daily challenge. Here are some tips to rent your equipment the right way.
For long term viability, the management of a rental company requires you to have a good control over your costs. Indeed, good management of profitability is a determining factor in the development of its rental activity. But then, how do you manage an equipment rental company?
Defining your policy and budget, the first step to managing a rental company properly
To manage an equipment rental company well, it is necessary to establish a policy and a budget consistent with the sector of activity. To begin with, define the general and pricing policies for your equipment. More importantly, communicate it! An exemplary communication of the terms and conditions to your employees, partners and customers clarifies many aspects and facilitates the exchange and rental of your equipment. An annual update of these procedures is preferable to avoid standing out for the wrong reasons in a very competitive market.
It is then necessary to establish the annual budget allocated to your equipment fleet. To do this, clearly identify all the costs generated by your equipment fleet. The budget will then be used to calculate the optimal number of machines for your fleet and to set a maximum operating cost figure per machine. These operating costs include consumption, maintenance, insurance and asset depreciation. A system of feedback and centralization of information will facilitate this step, we will come back to this point later.
Another point not to be neglected, choose an insurance tailored to your activity, your location and above all your customers. These are the basics of managing an equipment rental company. Once the policy and the budget have been clearly established, it is time to take an interest in managing the sales and purchases of your equipment rental company.
Regularly sell your equipment to keep your rental company profitable
Making a rental company profitable means regularly selling its equipment. Keeping equipment with a usage threshold below 40% is often unprofitable. Reducing the range of products on offer is not necessarily negative, quite the contrary. Do not hesitate to resell the equipment! Conversely, invest in the type of equipment that you can rent easily and regularly. A strategy of specialization to the detriment of diversification will in many cases pay off. However, this point should be taken into consideration according to the sector of activity, the location and the competition that an equipment rental company faces.
Similarly, it is important to keep a close eye on machines with high maintenance or servicing costs. If these expenses persist, selling the equipment is strongly recommended. For example, trailers have a long service life, but prolonging this life is not always synonymous with investment. Faulty equipment does not contribute to the good reputation of an equipment rental company. Even less to its financial health.
Buying the right second-hand equipment is a key step to controlling the costs of an equipment rental company
The opposite to selling, buying quality second-hand equipment also allows you to better control the costs of an equipment rental company. Investing in second-hand machines reduces expenses. The difference with new equipment is often minimal in the case of machines less than four years old. This low-cost investment provides a solid alternative. Moreover, a small investment can make your equipment just as attractive to your customers. Look regularly at the offers and sale announcements, especially on the internet. Gems are regularly posted online and are just waiting for you to find them! Buying second-hand limits debt and ensures better control of the costs of an equipment rental company.
On another level, do not hesitate to develop partnerships with other equipment rental companies to complete your offer. Investing in expensive equipment while remaining financially stable is tricky business. These partnerships broaden your offer at a lower investment. It is however important to set up beforehand the adequate rental conditions with your partner renters to avoid any misunderstandings.
Choose an equipment rental management solution, the most important tip
Choosing an equipmentrental management solution means above all choosing a tool in line with the challenges of your business. Hitechsoftware has developed the harmony equipment rental management software to centralize and analyze all aspects of its business sector. Harmony ensures a complete vision of your rental business as well as enabling you to react faster thanks to a clear and intuitive planning. This planning manages all the cycles of your equipment, from sales to invoicing and from reservation to contract and workshop management. The resulting real-time data and performance will be essential for establishing a consistent policy and budget.
As advised above, acquisition and purchasing management is greatly facilitated by harmony. This equipment rental management solution gives you the ability to quantify the upkeep and maintenance of your equipment to establish a history of expenses and revenues. The ideal solution to optimize decision support and accounting management. Our teams therefore strongly advise to automate this process in order to identify precisely the profitability of a fleet of machines. This practice will then allow you to make the right budgetary decisions quickly and efficiently. For more information on the subject or advice on how to facilitate the management of an equipment rental company, do not hesitate to contact our experts here.