Your Guide to Hiring Building Contractors
When you’re planning a home remodeling project, a general building contractor will be an integral part of the whole process. A building contractor is the person in charge of managing the entire project, coordinating all the workers, contractors and materials.
You can hand off the majority of the headaches associated with a home remodeling project to your home contractor. This professional plans a project and hires and coordinates subcontractors who provide specific services, such as electrical, plumbing, flooring, cabinets, painting and finishing work. Some building contractors will perform various services instead of hiring the work out to subcontractors.
Start by Interviewing Building Contractors
Having an experienced and professional building contractor at the helm of your home remodeling project will be crucial for the overall success of the venture. Interview at least two or three general contractors to explore your options.
Conduct the interviews at your home so the contractors can see the project area. As you explain and describe your desires, a winning contractor will display expertise and understanding of the full scope of the project. Ask specific questions about the timeline for completion, building materials, subcontractors needed, building permits and more. Every professional you meet with should follow up on your meeting with a comprehensive bid that includes all fees and charges associated with the project.
Ask potential building contractors for two or three references that are previous clients for whom the contractor has provided services. With contact information, you can reach out to these former clients to ask about their experiences with the contractor. Find out about the clients’ overall satisfaction with the services, whether the project ended on schedule, whether there were cost overruns and how well the subcontractors performed.
Proof of Insurance and Licensing
Your building contractor needs to carry general liability insurance and workman’s compensation insurance to cover accidents that result in injury and property damage. Get proof of insurance before hiring a building contractor. Never assume a contractor has insurance.
Licensing may or may not be required by your state. If it is, ask to see a contractor’s license. A licensed contractor ensures reasonable competency.
Hiring and Moving Forward
Once you’ve done your research and made a hiring decision, it’s time to review a contract and sign on the dotted line. The contract should include a start and planned completion date, list of materials and products, payment schedule, proof of insurance and provisions for the contractor to get lien releases from suppliers and subcontractors, which protects you from liability if the contractor doesn’t pay these expenses. All parties need to sign the contract to get the project underway.
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Plant and Tool Hire Business Plan [Sample Template]
By: Author Tony Martins Ajaero
Home » Business ideas » Service Industry » Equipment Rental & Leasing Business
Are you about starting a plant tool & hire business? If YES, here’s a complete sample plant tool & hire business plan template & feasibility report you can use for FREE to get started .
Okay, so we have considered all the requirements for starting a plant tool & hire business. We have analyzed and drafted a sample plant tool & hire marketing plan backed up by actionable guerrilla marketing ideas for plant tool & hire businesses. So let’s proceed to the business planning section.
If you are looking to start a business that doesn’t require much stress or perhaps extensive period of training, then you should either look towards opening a shop to sell stuffs or start a rental business. One of the businesses that you can start that is highly profitable is a plant and tool hire business.
There are countless number of technicians, farmers and artisans who don’t have the required capital to acquire all the tools needed to run their business but can afford to rent such tools if they can find a place to rent from.
Much more than technicians and artisans, some organizations also rent tools to carry out a project or job because it is cost effective for them to rent as against purchasing such tools. Ideally, people would prefer to rent tools to do a one-off job.
There are several tools that people can rent to accomplish the task they have at hand. Tools like mower, hand drillers, heavy duty drillers, welding machines, forklifts, hand tools (pliers, spanners, screwdrivers, hammers, chisels et al), wheelbarrows, spades, rakes, sickles, power saw, filling machine, scaffoldings and virtually any tool that is needed to get any task done.
So your responsibility is to look for such tools and ensure that you have them in your store. So if you have decided to start a plant and tool hire business, then you should ensure that you carry out feasibility studies and also market survey.
Business plan is yet another very important business document that you should not take for granted when launching your own business. Below is a sample plant and tool hire business plan template that can help you to successfully write your own with little or no difficulty.
A Sample Plant and Tool Hire Business Plan Template
1. industry overview.
Plant and tool hire business which is part of the tool and equipment industry comprises companies that primarily rent tools and small to medium size pieces of equipment, including contractors’ and builders’ tools, equipment and home maintenance tools.
Please note that companies that mainly focus on other rentals like trucks and trailers without drivers, party and banquet equipment and personal and household goods are all excluded from this industry.
The truth is that the Tool and Equipment Rental industry falls under a larger umbrella of rental industries that have largely benefited from improving nonresidential construction markets. This industry, however, has been slower to recover.
Thus, as multifamily and nonresidential construction grew slowly in 2013, industry revenue continued declining. It was not until these markets had mostly recovered that industry operators began experiencing increased demand for their services.
Going forward, the industry will continue benefiting from contractors resuming their prominence as the industry’s largest consumer group. This will be supported by steady growth in the number of construction projects in both residential and nonresidential markets.
The Tool and Equipment Rental Industry is indeed a large and vibrant industry not only in the united states of America and but also in most countries of the world. Statistics have it that the Tool and Equipment Rental industry in the United States of America, is worth about $3 billion, with an estimated growth rate of 3.0 percent between 2012 and 2017.
There are about 9,090 registered and licensed tool and equipment rental businesses in the United States and they are responsible for employing about 26,355 people. In the United States, no company can boast of having the lion market share in the industry, the industry is still very much open for competitions from aspiring investors who would want to launch their own plant and tool hire business.
According to a report recently published by IBISWORLD, the Tool and Equipment Rental industry is in the mature phase of its life cycle as indicated by its growth rate over the 10 years to 2022 and the widespread but growing acceptance of its services in downstream markets.
This trend is not true globally, however, as the maturity of the Tool and Equipment Rental industry varies considerably depending on the country’s equipment sales performance.
Industry value added (IVA), a measure of the industry’s contribution to the overall economy, is forecast to grow at an annualized rate of 2.4 percent over the 10 years to 2022, relatively in line with the projected growth of US GDP, which is set to rise at an annualized rate of 2.0 percent during the same period. IVA is a function of wages, depreciation and profit margins.
The tool and equipment rental industry is indeed a profitable industry to venture into despite the fact that the entry bar for the business is not too difficult to scale through.
The truth is that if a plant and tool hire business is well – stocked with a wide array of tools and also well positioned in an environment with the right demography, they will sure attract regular clients and their items will be booked all through the year.
2. Executive Summary
Jonny Pardew® Plant & Tool Hire, LLC is a licensed equipment and tool rental company that will be based in Carson City – Nevada. We have been able to secure a corner piece property in a centralized and busy location in the heart of the city; a location with the right demography for the kind of business we want to run.
We are a standard equipment and tool rental company that will be involved in renting out contractors’ equipment, home tools, DIY equipment and delivery, repair and other services. We are equipped to service a wide range of clientele in and around Carson City – Nevada.
Jonny Pardew® Plant & Tool Hire, LLC is a client-focused and result driven plant and tool hire outfit that provides standard and reliable equipment and tools at an affordable fee that won’t in any way put a hole in the pocket of our clients.
We will offer standard and professional services to all to our clients. We will ensure that we work hard to meet and surpass our clients’ expectations whenever they rent tools and equipment from our organization.
Jonny Pardew® Plant & Tool Hire, LLC will at all times demonstrate her commitment to sustainability, both individually and as a firm, by actively participating in our communities and integrating sustainable business practices wherever possible.
We will ensure that we hold ourselves accountable to the highest standards by meeting our client’s needs precisely and completely.
Our plan is to position Jonny Pardew® Plant & Tool Hire, LLC to become the leading brand in the equipment and tool rental industry in the whole of Nevada, and also to be amongst the top 10 plant and tool hire outfits in the United States of America within the first 10 years of operation.
This might look too tall a dream but we are optimistic that this will surely come to pass because we have done our research and feasibility studies and we are enthusiastic and confident that Carson City – Nevada is the right place to launch our plant and tool hire business before spreading to other parts of the United States.
Jonny Pardew® Plant & Tool Hire, LLC is family business that is owned by Mr. Jonny Pardew. The organization will be managed by Mr. Jonny Pardew who has over 12 years of hands on experience working at various capacities within the equipment and tools rental industry in the United States. Jonny Pardew has a Diploma in Mechanical Engineering from the University of Nevada – Las Vegas.
3. Our Products and Services
Jonny Pardew® Plant & Tool Hire, LLC is going to offer varieties of services within the scope of the equipment and tool rental services industry in the United States of America. Our intention of starting our plant and equipment hire company is to make profits from the industry and we will do all that is permitted by the law in the US to achieve our aim and ambition.
Our business offerings are listed below;
- Rental of contractors’ and builders’ tools and equipment
- Rental of home repair tools
- Rental of moving equipment and supplies, except trucks and vans
- Rental of floor waxing and sanding machines
- Rental of lawn and garden equipment
- Rental of various work tools and equipment
4. Our Mission and Vision Statement
- Our vision is to build a plant and tool hire business that will become the number one choice for clients in the whole of Carson City – Nevada. Our vision reflects our values: integrity, service, excellence and teamwork.
- Our mission as a plant and tool hire company is to rent out contractors’ equipment, home tools, DIY equipment rental and repair and other services to a wide range of clientele. We are going to position the business to become the leading brand in the equipment and tools rental industry in the whole of Carson City – Nevada, and also to be amongst the top 10 plant and tool hire companies in the United States of America within the first 10 years of fully launching the business.
Our Business Structure
Jonny Pardew® Plant & Tool Hire, LLC is a plant and tool hire company that intends to start small in Carson City – Nevada, but looks to grow big in order to compete favorably with leading equipment and tool rental companies both in the United States and on a global stage.
We are aware of the importance of building a solid business structure that can support the kind of world class plant and tools hire business we want to own. This is why we are committed to only hiring the best hands within our area of operations.
At Jonny Pardew® Plant & Tool Hire, LLC, we will ensure that we hire people that are qualified, hardworking, creative, customer centric and are ready to work to help us build a prosperous business that will benefit all the stake holders.
As a matter of fact, profit-sharing arrangement will be made available to all our senior management staff and it will be based on their performance for a period of five years or more as agreed by the board of trustees of the company. In view of the above, we have decided to hire qualified and competent hands to occupy the following positions in our organization;
- Chief Executive Officer (Owner)
- Equipment and Tools Rental Manager
Admin and HR Manager
Marketing and Sales Executive
- Customer Services Executive
- Truck Driver
5. Job Roles and Responsibilities
Chief Executive Office:
- Increases management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results; developing incentives; developing a climate for offering information and opinions.
- Responsible for fixing prices and signing business deals
- Responsible for providing direction for the business
- Creates, communicates, and implements the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
- In authority for signing checks and documents on behalf of the company
- Evaluates the success of the organization
Equipment and Tool Rental Manager
- Manages the rental of contractors’ and builders’ tools and equipment, home repair tools, moving equipment and supplies, floor-waxing and sanding machines, lawn and garden equipment, and rental of various work tools and equipment
- Achieves maximum profitability and over-all success by controlling costs
- Responsible for plant and tools rental control policies and completion of necessary forms
- Follows proper purchasing and requisitioning procedures.
- Co-ordinates the general assembling and dismantling of plants and other heavy equipment and ensure that they are safely transported to and fro event venues.
- Responsible for overseeing the smooth running of HR and administrative tasks for the organization
- Designs job descriptions with KPI to drive performance management for clients
- Regularly hold meetings with key stakeholders to review the effectiveness of HR Policies, Procedures and Processes
- Maintains office supplies by checking stocks; placing and expediting orders; evaluating new products.
- Ensures operation of equipment by completing preventive maintenance requirements; calling for repairs.
- Defines job positions for recruitment and managing interviewing process
- Carries out induction for new team members
- Responsible for training, evaluation and assessment of employees
- Responsible for arranging travel, meetings and appointments
- Oversees the smooth running of the daily office activities
- Identifies, prioritizes, and reaches out to new partners, and business opportunities et al
- Identifies development opportunities; follows up on development leads and contacts; participates in the structuring and financing of projects; assures the completion of development projects.
- Writes winning proposal documents, negotiate fees and rates in line with company policy
- Responsible for handling business research, marker surveys and feasibility studies for clients
- Responsible for supervising implementation, advocate for the customer’s needs, and communicate with clients
- Develops, executes and evaluates new plans for increasing sales
- Documents all customer contact and information
- Represents the company in strategic meetings
- Helps to increase sales and growth for the company
- Responsible for preparing financial reports, budgets, and financial statements for the organization
- Provides managements with financial analyses, development budgets, and accounting reports; analyzes financial feasibility for the most complex proposed projects; conducts market research to forecast trends and business conditions.
- Responsible for financial forecasting and risks analysis.
- Performs cash management, general ledger accounting, and financial reporting for one or more properties.
- Responsible for developing and managing financial systems and policies
- Responsible for administering payrolls
- Ensures compliance with taxation legislation
- Handles all financial transactions for the company
- Serves as internal auditor for the company
Client Service Executive
- Welcomes guests and clients by greeting them in person or on the telephone; answering or directing inquiries.
- Ensures that all contacts with clients (e-mail, walk-In center, SMS or phone) provides the client with a personalized customer service experience of the highest level
- Through interaction with clients on the phone, uses every opportunity to build client’s interest in the company’s products and services
- Manages administrative duties assigned by the manager in an effective and timely manner
- Consistently stays abreast of any new information on the company’s products, promotional campaigns etc. to ensure accurate and helpful information is supplied to clients when they make enquiries
- Responsible for transporting contractors’ and builders’ tools and equipment, home repair tools, floor-waxing and sanding machines, lawn and gardening equipment to project site
- Runs errand for the organization
- Handles any other duty as assigned by the plant and tools rental manager
6. SWOT Analysis
Because of our drive for excellence when it comes to running a standard plant and tool hire company, we were able to engage some of the finest business consultants in Carson City – Nevada to look through our business concept and together we were able to critically examine the prospect of the business and to access ourselves to be sure we have what it takes to run this business.
In view of that, we were able to take stock of our strengths, our weakness, our opportunities and also the threats that we are likely going to be exposed to in Carson City – Nevada. Here is a of what we got from the critically conducted SWOT Analysis for Jonny Pardew® Plant & Tool Hire, LLC.
Notwithstanding the fact that all our tools and equipment are of world – class standard and the business is well positioned and equipped to meet the 21 st century demand of both high profile corporate and individual clients.
We have a team that can go all the way to give our clients value for their money; a team that are trained and equipped to pay attention to details regard assembling, servicing and maintaining plants and tools. We are well positioned and we know we will attract loads of clients from the first day we open our doors for business.
As a new plant and tool hire company, it might take some time for our organization to break into the market and gain acceptance in the already saturated equipment and tools rental industry especially from corporate clients; that is perhaps our major weakness.
The opportunities in the equipment and tools rental industry is massive considering the number of individuals and businesses that prefer renting work tools and equipment as against purchasing in the United States. As a standard plant and tools hire company, we are ready to take advantage of any opportunity that comes our way.
Some of the threats that we may likely face as a plant and tools hire company operating in the United States are unfavorable government policies , the arrival of a competitor within our location of operation and global economic downturn which usually affects purchasing power.
There is hardly anything we can do as regards these threats other than to be optimistic that things will continue to work for our good.
7. MARKET ANALYSIS
- Market Trends
If you are interested in the trends in the equipment and tools rental industry especially in the United States, you will notice that the pattern is same and it is as construction projects increase, contractors will resume their prominence as the industry’s largest consumer group.
With the recovery of construction markets, consumers have opted to hire contractors and higher per capita disposable income will encourage households to hire professionals to undertake home improvement projects.
The fact remains that the equipment and tools rental industry is in a continuous state of evolution and as such, ground breaking strategies and ideas that were once highly successful are no longer as productive as they were in the past. Close observation of the trend in the industry reveals that the past few years have seen the rise and proliferation of social media and new tech tools.
The trend also extends to increased attention paid to engagement and new market segments, adopting eco-friendly measures and sustainability when making use of equipment and tools, and of course increase in demands from contractors.
Lastly, aside from excellent customer services, plant and tool rental companies ensure that they have some of the best equipment and tools they can get even if it means importing them or customizing them. This will enable them to continue to welcome repeated customers on a regular basis.
8. Our Target Market
Even though Jonny Pardew® Plant & Tool Hire, LLC will initially serve small to medium sized business, but that does not in any way stop us from growing to be able to compete with leading equipment and tool rental companies in the United States.
We are coming into the industry with a business concept that will enable us work with the highly placed people and companies in the country and at the same with lowly placed people and smaller businesses.
Our Competitive Advantage
Jonny Pardew® Plant & Tool Hire, LLC might be a new entrant into the equipment and tools rental industry in the United States of America, but the management staff and owners of the business are considered gurus. They are core professionals who are highly qualified to run such a business.
Other competitive advantages that we are bringing to the market are our ability to quickly adopt new technology, economies of scale and the fact that all our plant, tools and equipment are of world – class standard and the business is well positioned and well – equipped to meet the 21 st century demand of clients. These are part of what will count as a competitive advantage for us.
Lastly, our employees will be well taken care of, and their welfare package will be amongst the best within our category in the industry meaning that they will be more than willing to build the business with us and help deliver our set goals and achieve all our aims and objectives.
9. SALES AND MARKETING STRATEGY
- Sources of Income
Jonny Pardew® Plant & Tool Hire, LLC is established with the aim of maximizing profits in the equipment and tools rental industry and we are going to go all the way to ensure that we do all it takes to attract clients on a regular basis. Jonny Pardew® Plant & Tool Hire, LLC will generate income by offering the following equipment and tool rental services;
- Rental of floor-waxing and -sanding machines
10. Sales Forecast
One thing is certain, there would always be need to carry out jobs that require the rental of equipment and tools in the United States of America and as such the services of plant and tool hire companies will always be needed.
We are well positioned to take on the available market in Carson City – Nevada and we are quite optimistic that we will meet our set target of generating enough profits from the first six months of operation and grow the business beyond Carson City – Nevada to other states in the U.S.
We have been able to critically examine the equipment and tool rental market, we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. The sales projections are based on information gathered on the field and some assumptions that are peculiar to startups in Carson City – Nevada.
- First Fiscal Year: $250,000
- Second Fiscal Year: $600,000
- Third Fiscal Year: $900,000
N.B : This projection was done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and natural disasters within the period stated above. There won’t be any major competitor offering same services as we do within the same location. Please note that the above projection might be lower and at the same time it might be higher.
- Marketing Strategy and Sales Strategy
We are mindful of the fact that there is stiffer competition amongst equipment and tools rental companies in the United States of America; hence we have been able to hire some of the best business developers to handle our sales and marketing concerns.
Our sales and marketing team will be recruited based on their vast experience in the equipment and tools rental industry and they will be trained on a regular basis so as to be equipped to meet their targets and the overall goal of the organization.
Our goal is to grow our plant and tools hire company to become one of the top 10 plant and tools hire cum rental companies in the United States of America which is why we have mapped out strategies that will help us take advantage of the available market and grow to become a major force to reckon with not only in the Carson City – Nevada but also in other cities in the United States of America.
Jonny Pardew® Plant & Tool Hire, LLC is set to make use of the following marketing and sales strategies to attract clients;
- Introduce our business by sending introductory letters alongside our brochure to contractors, plumber, households and key stake holders in Carson City and other cities in Nevada
- Advertise our business in relevant related magazines, newspapers, TV and radio stations
- List our business on yellow pages’ ads (local directories)
- Attend relevant international and local expos, seminars, and business fairs et al
- Create different packages for different category of clients in order to work with their budgets and still deliver quality supply and services to them
- Leverage on the internet to promote our business
- Engage in direct marketing approach
- Encourage word of mouth marketing from loyal and satisfied clients
- Join local chambers of commerce and industry with the aim of marketing our business
- Make use of attractive hand bills to create awareness and also to give direction to our facility
- Adopt direct mailing coupon marketing approach
- Position our signage / flexi banners at strategic places in and around Carson City – Nevada
- Create a loyalty plan that will enable us reward our consistent clients especially those that refer clients to us.
- Engage in roadshows within our neighborhood to create awareness for our plant and tools hire business.
11. Publicity and Advertising Strategy
We have been able to work with our brand and publicity consultants to help us map out publicity and advertising strategies that will help us walk our way into the heart of our target market. We are set to take the equipment and tools rental industry by storm which is why we have made provisions for effective publicity and advertisement of our plant and tools hire company.
Below are the platforms we intend to leverage on to promote and advertise Jonny Pardew® Plant & Tool Hire, LLC;
- Place adverts on both print (community based newspapers and magazines) and electronic media platforms
- Sponsor relevant community based events/programs
- Leverage on the internet and social media platforms like Instagram, Facebook, twitter, YouTube, Google + et al to promote our brand
- Install our billboards in strategic locations all around Carson City – Nevada
- Engage in roadshow from time to time in target neighborhoods to create awareness of our business
- Distribute our fliers and handbills in target areas
- Ensure that all our workers wear our branded shirts and all our vehicles and trucks are well branded with our company’s logo et al.
12. Our Pricing Strategy
Just like in rental and consulting business, hourly billing for rental services is also a long – time tradition in the industry. However, for some types of rental services, flat fees make more sense because they allow clients to better predict the overall service charges.
As a result of this, Jonny Pardew® Plant & Tool Hire, LLC will charge our clients both flat fee and hourly billing as long as it favors both parties.
At Jonny Pardew® Plant & Tool Hire, LLC we will keep our fees below the average market rate for all of our clients by keeping our overhead low and by collecting payment in advance. We are aware that there are some clients especially contractors that would need to rent tools and equipment on a regular basis, we will offer flat rate for such services that will be tailored to take care of such clients’ needs.
- Payment Options
The payment policy adopted by Jonny Pardew® Plant & Tool Hire, LLC is all inclusive because we are quite aware that different customers prefer different payment options as it suits them but at the same time, we will ensure that we abide by the financial rules and regulation of the United States of America.
Here are the payment options that Jonny Pardew® Plant & Tool Hire, LLC will make available to her clients;
- Payment via bank transfer
- Payment with cash
- Payment via credit cards / Point of Sale Machines (POS Machines)
- Payment via online bank transfer
- Payment via check
- Payment via bank draft
In view of the above, we have chosen banking platforms that will enable our clients make payment for renting our equipment and tools without any stress on their part. Our bank account numbers will be made available on our website and promotional materials.
13. Startup Expenditure (Budget)
From our market survey and feasibility studies, we have been able to come up with a detailed budget for establishing a standard tool hire company in Carson City – Nevada and here are the key areas where we will spend our startup capital;
- The total fee for incorporating the Business in the United States of America- $750.
- The budget for basic insurance policy covers, permits and business license – $2,500
- The amount needed to acquire a suitable facility that will accommodate our heavy duty plants, tools and equipment, trucks and small office facility (Re – Construction of the facility inclusive) – $150,000.
- The cost for equipping the office (computers, software applications, printers, fax machines, furniture, telephones, filing cabins, safety gadgets and electronics et al) – $5,000
- The cost of launching an official website – $600
- The cost for the purchase of standard plant, equipment and tools (contractors’ and builders’ tools and equipment, home repair tools, moving equipment and supplies, floor-waxing and sanding machines, lawn and garden equipment, and various work tools and equipment) – $60,000
- The cost for the purchase of a truck – $10,000
- Budget for paying at least 4 employees for 2 months plus utility bills – $100,000
- Additional Expenditure (Business cards, Signage, Adverts and Promotions et al) – $2,500
- Miscellaneous: $5,000
Going by the report from the market research and feasibility studies conducted, we will need about four hundred and fifty thousand ( 450,000 ) U.S. dollars to successfully set up a medium scale but standard plant and tool hire business firm in the United States of America.
Generating Startup Capital for Jonny Pardew® Plant & Tool Hire, LLC
Jonny Pardew® Plant & Tool Hire, LLC is a family business that will be owned by Mr. Jonny Pardew and his immediate family members. They are the sole financiers of the firm, but may likely welcome partners later which is why they decided to restrict the sourcing of the startup capital for the business to just three major sources.
These are the areas we intend generating our startup capital;
- Generate part of the startup capital from personal savings
- Source for soft loans from family members and friends
- Apply for loan from my Bank
N.B: We have been able to generate about $150,000 ( Personal savings $100,000 and soft loan from family members $50,000 ) and we are at the final stages of obtaining a loan facility of $300,000 from our bank. All the papers and documents have been duly signed and submitted, the loan has been approved and any moment from now our account will be credited.
14. Sustainability and Expansion Strategy
The future of a business lies in the number of loyal customers that they have, the capacity and competence of their employees, their investment strategies and business structure. If all of these factors are missing from a business, then it won’t be too long before the business closes shop.
One of our major goals of starting Jonny Pardew® Plant & Tool Hire, LLC is to build a business that will survive off its own cash flow without the need for injecting finance from external sources once the business is officially running.
We know that one of the ways of gaining approval and winning customers over is to rent our tools and equipment a little bit lower than what is obtainable in the market and we are well prepared to survive on lower profit margin for a while.
Jonny Pardew® Plant & Tool Hire, LLC will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our company’s corporate culture is designed to drive our business to greater heights and training and retraining of our workforce is at the top burner.
As a matter of fact, profit-sharing arrangement will be made available to all our management staff and it will be based on their performance for a period of six years or more. We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.
- Business Name Availability Check: Completed
- Business Incorporation: Completed
- Opening of Corporate Bank Accounts various banks in the United States: Completed
- Opening Online Payment Platforms: Completed
- Application and Obtaining Tax Payer’s ID: In Progress
- Application for business license and permit: Completed
- Purchase of Insurance for the Business: Completed
- Securing a standard warehouse facility and reconstruction inclusive: In Progress
- Conducting Feasibility Studies: Completed
- Generating part of the startup capital from the founder: Completed
- Applications for Loan from our Bankers: In Progress
- Writing of Business Plan: Completed
- Drafting of Employee’s Handbook: Completed
- Drafting of Contract Documents: In Progress
- Design of The Company’s Logo: Completed
- Printing of Promotional Materials: Completed
- Recruitment of employees: In Progress
- Purchase of the needed furniture, office equipment, electronic appliances and facility facelift: In progress
- Purchase of various sizes of standard tools and equipment: Completed
- Purchase of trucks and vans: Completed
- Creating Official Website for the Company: In Progress
- Creating Awareness for the business (Business PR): In Progress
- Health and Safety and Fire Safety Arrangement: In Progress
- Establishing business relationship with vendors and key players in the industry: In Progress
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How To Write a Business Plan for Construction Equipment Hire in 9 Steps: Checklist
By alex ryzhkov, resources on construction equipment hire.
- Financial Model
- Business Plan
- Value Proposition
- One-Page Business Plan
Are you looking to start a construction equipment hire business but don't know where to begin? Look no further! In this blog post, we will provide you with a comprehensive checklist of nine key steps to help you write a solid business plan for your construction equipment hire venture.
Statistical Information: Before we delve into the steps, let's take a moment to explore the industry and its growth potential. The construction equipment rental market in the United States is experiencing significant growth, with a projected CAGR (Compound Annual Growth Rate) of 4.2% from 2021 to 2026. This growth can be attributed to various factors, including rising construction activities, cost-effectiveness of renting equipment, and the need for specialized machinery for specific projects.
Now, let's get started on the steps to create a comprehensive business plan for your construction equipment hire business:
- Conduct market research to gain insights into the industry's current trends, customer preferences, and potential opportunities.
- Identify your target market and customers, understanding their specific needs and requirements.
- Analyze your competition to identify gaps in the market and develop strategies to differentiate your business.
- Define your unique selling proposition (USP), highlighting what sets your construction equipment hire business apart from the competition.
- Determine your pricing strategy, considering factors such as equipment value, rental duration, and market demand.
- Create a comprehensive marketing plan to reach your target audience effectively and promote your services.
- Develop a financial forecast that outlines your projected revenue, expenses, and profitability over a specific period.
- Identify potential funding sources, such as investors, loans, or grants, to support your business's initial setup and ongoing operations.
- Outline your organizational structure, including the roles and responsibilities of key personnel, to ensure smooth operations.
By following these nine steps, you will be well on your way to writing a robust business plan for your construction equipment hire venture. Remember, a solid plan sets the foundation for a successful business, so take the time to research, analyze, and strategize.
Conduct Market Research
Market research plays a crucial role in any business planning process, and for a construction equipment hire company, it is no exception. By conducting comprehensive market research, you can gather valuable information about your target market, customers, and competitors. This research will enable you to make informed decisions that will help you develop a successful business plan for your construction equipment rental business.
Here are some important steps to consider when conducting market research:
- Identify the demand: Determine the demand for construction equipment rentals in your target area. Look at the current market trends and growth projections to gauge the potential success of your business.
- Define your target market: Understand who your potential customers will be. Are you targeting small contractors, large construction companies, or homeowners? Identify their specific needs and preferences.
- Research your competition: Study your competitors to assess their strengths, weaknesses, and market positioning. This will help you identify opportunities and gaps in the market that you can leverage.
- Analyze customer preferences: Learn about your potential customers' preferences when it comes to construction equipment rental. What types of equipment do they commonly require? Are there any specific features or services they value the most?
- Identify market trends: Stay updated with the latest industry trends, technological advancements, and regulatory changes that can impact your construction equipment rental business.
Tips for conducting effective market research:
- Utilize online resources: Take advantage of online databases, industry reports, and trade publications to gather market data.
- Survey potential customers: Conduct surveys or interviews with your target audience to understand their needs and preferences.
- Network with industry professionals: Attend trade shows, conferences, and join industry associations to connect with professionals who can provide insights into the construction equipment rental market.
- Consider hiring a market research firm: If you have the budget, partnering with a market research firm can provide you with in-depth analysis and a comprehensive understanding of your market.
By conducting thorough market research, you can gain valuable insights that will help you make strategic decisions throughout the business planning process. It will enable you to identify your target market, understand customer preferences, and position your construction equipment hire business for success.
Identify Target Market And Customers
Identifying your target market and customers is crucial for the success of your construction equipment hire business. By understanding who your target audience is, you can tailor your marketing efforts and services to meet their specific needs, increasing your chances of attracting and retaining customers. Here are some important steps to help you identify your target market and customers:
- Research the construction industry: Start by conducting thorough research on the construction industry to gain a deeper understanding of its trends, demands, and potential opportunities. This research will help you identify which specific sectors within the industry are in need of construction equipment rental services.
- Define your ideal customer profile: Once you have a general understanding of the industry, narrow down your focus to define your ideal customer profile. Consider factors such as the size of the construction projects they undertake, the frequency of equipment usage, and their budget constraints. This will help you target your marketing efforts and tailor your services accordingly.
- Identify customer pain points: In order to attract customers, you need to understand their pain points and address them effectively. Conduct surveys or interviews with potential customers to identify their challenges when it comes to equipment acquisition and usage. This will enable you to position your rental services as a solution to their problems.
- Research your competition: Analyze your competitors who operate in the same market segment as you. Identify their target market and customer base to gain insights into their strategies and offerings. This will help you differentiate your business and find unique selling points that will attract customers.
Tips for Identifying Your Target Market and Customers:
- Consider creating customer personas, fictional representations of your ideal customers, to help you better understand their needs and preferences.
- Use online tools and databases to gather demographic and psychographic information about your target market.
- Network with professionals in the construction industry to gain insights and form valuable connections.
When starting a construction equipment hire business, it is crucial to thoroughly analyze the competition in the market. By understanding your competitors, you can identify gaps in the market and develop strategies to differentiate your business. Here are some important factors to consider when analyzing the competition:
- Identify direct and indirect competitors: Begin by identifying both direct competitors who offer similar construction equipment hire services and indirect competitors who may offer alternative solutions to customers.
- Evaluate their offerings: Study the equipment, pricing, quality, and range of services offered by your competitors. This will help you understand their strengths and weaknesses.
- Assess their target market: Analyze the target market and customer base of your competitors. This will provide insights into which customer segments are being targeted and help you identify potential niches or untapped markets.
- Compare pricing strategies: Analyze your competitors' pricing strategies and rental fees. Understand the value they offer to customers and how your pricing can be competitive while still generating profit.
- Research customer reviews and feedback: Read customer reviews and feedback about your competitors' services. This will give you an understanding of their strengths and weaknesses from the perspective of customers.
Tips for Analyzing Competition:
- Visit competitors' websites and study their online presence.
- Visit their physical locations to gain a better understanding of their operations and customer experience.
- Network with industry professionals and attend trade shows to learn about new players in the market.
- Stay updated with industry news and trends to identify potential emerging competitors.
- Use SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats) to compare your business with your competitors.
By conducting a thorough analysis of your competition, you can develop strategies to position your construction equipment hire business uniquely in the market. This analysis will help you identify areas where you can excel and discover opportunities to meet the specific needs of your target customers.
Define Unique Selling Proposition
Once you have conducted market research and analyzed your competition, it is important to define your unique selling proposition (USP). Your USP is what sets your construction equipment hire business apart from your competitors and convinces potential customers to choose you over others.
Here are some tips to help you define your USP:
Focus on Your Strengths:
- Identify the strengths and advantages of your business in terms of the construction equipment you offer, the quality of your equipment, and the level of customer service you provide.
- Highlight any specialized equipment or unique features that can fulfill specific needs of your target market.
Address Customer Pain Points:
- Understand the pain points and challenges that your target customers face when it comes to construction equipment hire.
- Offer solutions or benefits that alleviate these pain points and make the rental process easier, more convenient, or cost-effective for your customers.
Emphasize Value and Benefits:
- Clearly communicate the value and benefits of choosing your business over your competitors.
- Highlight how renting from you can save customers money, provide greater flexibility, and ensure reliable equipment for their construction projects.
By defining your unique selling proposition, you can effectively differentiate your construction equipment hire business from others in the market and attract customers who value what you have to offer. It is important to consistently communicate and reinforce your USP in your marketing efforts to establish a strong brand presence and build trust with potential customers.
Determine Pricing Strategy
Determining the right pricing strategy for your construction equipment hire business is crucial to attract customers and maximize your revenue. Here are some key considerations to help you set the right prices:
- Research the market: Conduct a thorough analysis of your competitors' pricing strategies. This will give you a benchmark and help you understand the prevailing market rates for construction equipment rental. Take into account factors such as equipment type, size, condition, and additional services provided.
- Consider your costs: Calculate your expenses, including equipment purchase or maintenance costs, insurance, overhead expenses, and personnel wages. This will give you an idea of the minimum rental price you need to cover your expenses and generate profit.
- Understand customer value: Determine the value your customers derive from renting your construction equipment. Consider factors such as convenience, reliability of equipment, availability, and quality of customer service. Take into account the benefits your customers receive compared to purchasing and maintaining their own equipment.
- Segment your pricing: Depending on the type of equipment and target market, consider segmenting your pricing by offering different rental rates for various equipment categories or customer segments. This can help you cater to different customer needs and capture a wider market share.
- Offer additional services: Consider offering additional services such as equipment delivery, setup assistance, or operator training. These value-added services can justify higher rental prices, as customers will benefit from the convenience and expertise provided.
- Monitor and adapt: Regularly monitor the market and customer feedback to evaluate the effectiveness of your pricing strategy. Consider adjusting your prices based on demand, market trends, and the competitive landscape. Continuously strive to provide the best value for your customers while maintaining profitability.
Tips for determining a successful pricing strategy:
- Consider offering flexible rental terms and packages to cater to different customer needs and budget constraints.
- Implement a dynamic pricing model based on peak and off-peak seasons, demand fluctuations, and availability of equipment.
- Offer loyalty programs or discounts for repeat customers to encourage ongoing relationships and customer loyalty.
- Regularly analyze your financial statements to ensure your pricing strategy is generating the desired level of profitability.
- Seek feedback from your customers on the perceived value of your pricing to identify areas for improvement.
Create A Marketing Plan
A strong marketing plan is essential for the success of your construction equipment hire business. It allows you to effectively promote your services, attract customers, and differentiate yourself from competitors. Here are some key steps to create an effective marketing plan:
- 1. Identify your target market: Understand the specific segment of customers that are most likely to benefit from your construction equipment hire services. This could include contractors, builders, landscapers, and maintenance teams.
- 2. Segment your target market: Divide your target market into distinct segments based on factors such as industry, location, and equipment needs. This will allow you to tailor your marketing efforts to each segment's specific requirements.
- 3. Conduct competitor analysis: Identify your main competitors in the construction equipment rental industry and analyze their marketing strategies. This will help you understand their strengths and weaknesses and allow you to differentiate yourself in the market.
- 4. Define your unique selling proposition (USP): Determine what sets your business apart from competitors. This could be factors such as offering a wider range of equipment, providing exceptional customer service, or offering competitive pricing.
- 5. Determine your pricing strategy: Set competitive rental rates for your construction equipment while ensuring profitability. Consider factors such as equipment value, operating costs, and market demand.
- 6. Choose effective marketing channels: Identify the most effective channels to reach your target market. This could include online advertising, social media, industry publications, trade shows, and networking events.
- 7. Develop a marketing budget: Allocate a budget for your marketing activities, considering factors such as advertising costs, promotional materials, and website development. Ensure that your budget is realistic and allows for effective marketing campaigns.
- 8. Create compelling marketing materials: Design materials such as brochures, flyers, and a professional website that effectively communicate your services, USP, and benefits to potential customers.
- 9. Track and measure marketing results: Regularly monitor the effectiveness of your marketing efforts and analyze key metrics such as website traffic, call volume, and customer inquiries. Use this data to refine your marketing strategies and make informed decisions.
- Consider offering special promotions or discounts to attract new customers and incentivize repeat business.
- Collaborate with industry influencers or organizations to enhance your brand visibility and credibility.
- Regularly update your online presence with relevant content, engaging social media posts, and customer testimonials to establish trust and attract potential customers.
- Continuously monitor industry trends and adapt your marketing strategies to stay ahead of the competition and meet evolving customer needs.
Develop A Financial Forecast
Developing a financial forecast is a crucial step in creating a comprehensive business plan for your construction equipment hire company. It involves estimating your potential revenue, costs, and profitability over a specific period, usually for the first three to five years of your business operations. A well-developed financial forecast can provide insights into the financial viability of your business idea and help you make informed decisions.
To develop a financial forecast, consider the following key components:
- Revenue Projections: Estimate your potential rental fees based on market research and industry standards. Consider factors such as rental rates, equipment utilization rates, and average rental duration. This will help you determine your overall revenue potential.
- Cost Analysis: Identify and quantify all costs associated with running your construction equipment hire business. This includes equipment purchase or leasing costs, maintenance and repair expenses, staff wages, insurance, marketing expenses, and administrative costs.
- Profitability Analysis: Calculate your potential profit margins by subtracting your estimated costs from your projected revenue. This will give you an understanding of your business's profitability and help you assess its financial feasibility.
- Cash Flow Projections: Determine your expected cash inflows and outflows over time. Consider factors such as rental payments, equipment purchases or lease payments, operating expenses, loan repayments, and any other financial obligations. Cash flow projections will help you manage your finances effectively and identify any potential shortfalls.
Tips for Developing a Financial Forecast:
- Be realistic in your revenue projections and consider factors that may impact your business, such as seasonal fluctuations or economic downturns.
- Take into account any potential additional revenue streams, such as delivery and pickup fees, equipment accessories, or sale of used equipment.
- Review industry benchmarks and financial ratios to ensure your forecast is in line with industry standards.
- Consider consulting with a financial expert or accountant to ensure accuracy and validity of your financial projections.
By developing a comprehensive financial forecast, you can demonstrate the financial viability of your construction equipment hire business to potential investors, lenders, or partners. It will also serve as a valuable tool for monitoring and managing your business's financial performance in the future.
Identify Funding Sources
Once you have developed a solid business plan for your construction equipment hire company, the next step is to identify the funding sources that will help you bring your business idea to life. Finding the right financial support is crucial for acquiring the necessary equipment, setting up operations, and covering initial expenses. Here are some important considerations to keep in mind:
- Evaluate your own resources: Before seeking external funding, assess your own financial situation. This includes personal savings, investments, and any assets that can be utilized as collateral to secure loans. It's important to have a clear understanding of how much you can contribute to the business initially.
- Explore traditional bank loans: Traditional bank loans are a common option for financing a construction equipment hire business. Research local banks and financial institutions that offer loans specifically for small businesses or the construction industry. Prepare a comprehensive loan proposal including your business plan, financial forecasts, and market analysis to increase your chances of securing a loan.
- Consider alternative financing methods: Apart from bank loans, there are alternative financing methods available, such as crowdfunding, peer-to-peer lending platforms, or business incubators. Explore these options and determine if they align with your business goals and funding needs.
- Explore government support programs: Many governments offer support programs for small businesses in the construction industry. Research and identify any grants, loans, or subsidies that may be available to you. These programs often have specific criteria and requirements, so make sure you meet the eligibility criteria before applying.
- Seek out potential investors: If you're looking for additional capital and are willing to share ownership or equity in your business, consider seeking out potential investors. This could be individuals or venture capital firms interested in the construction equipment industry. Create a compelling investment pitch and network within your industry to find potential investors.
- Prepare a detailed budget and financial projections to demonstrate the potential return on investment to potential funders.
- Build relationships with local suppliers and contractors who may be interested in investing or partnering with your business.
- Consider leasing or financing options offered by equipment manufacturers or dealers to acquire the necessary equipment.
- Consult with a financial advisor or business mentor who can provide guidance on funding options specific to the construction equipment hire industry.
Identifying the right funding sources is essential for the success of your construction equipment hire business. Take the time to research and explore all available options that align with your business needs and goals. By securing the necessary funding, you can establish a strong foundation for your business and position yourself for growth and profitability.
Outline Organizational Structure
Once you have conducted market research, identified your target market and customers, analyzed your competition, defined your unique selling proposition, determined your pricing strategy, created a marketing plan, developed a financial forecast, and identified funding sources, it is essential to outline your organizational structure for your construction equipment hire business. Having a clear organizational structure ensures that your team is well-organized and knows their roles and responsibilities, leading to increased efficiency and productivity. Here are some important points to consider when outlining your organizational structure:
- Identify key positions: Begin by identifying the key positions required for the smooth functioning of your business. This may include positions such as the general manager, operations manager, sales manager, finance manager, and customer service representative.
- Define roles and responsibilities: Clearly define the roles and responsibilities of each position within your organizational structure. This will help your employees understand their duties and ensure that all tasks are appropriately assigned and executed.
- Establish reporting lines: Determine the reporting lines within your organization to create a hierarchical structure. This will ensure effective communication and coordination among team members.
- Consider delegating decision-making authority to relevant positions to empower your employees and promote autonomy.
- Regularly review and update your organizational structure as your business grows and evolves to accommodate new positions or responsibilities.
- Consider seeking professional advice or consulting with experts in organizational management to ensure your structure is well-designed and efficient.
By outlining your organizational structure, you provide a foundation for your business to operate smoothly while enabling effective management and optimal utilization of resources. A well-structured organization contributes to better workflow, employee satisfaction, and ultimately, the success of your construction equipment hire business.
In conclusion, creating a business plan for a construction equipment hire venture is a crucial step towards success. By following the nine steps outlined in this checklist, you can ensure that your business is well-prepared and positioned for growth in a competitive market.
Conducting thorough market research allows you to understand your target market and customers, as well as assess the competition. Identifying your unique selling proposition and determining a pricing strategy will help differentiate your business and attract customers. Creating a comprehensive marketing plan will ensure effective promotion and reach your target audience.
Developing a financial forecast and identifying funding sources are essential to secure the necessary capital for your business operations. Finally, outlining the organizational structure establishes clear roles and responsibilities within your company.
By following these steps and creating a well-rounded business plan, you will be ready to launch your construction equipment hire business and position yourself for long-term success.
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How to Create a Business Plan for a Construction Equipment Rental Company
No matter what kind of business you’re interested in starting, you’re going to need a well-put-together business plan if you’re going to succeed.
Not only is planning essential to your success, but it’s also something that any lender will have to see before providing a loan to start your business. With a good small equipment rental business plan, you can make a great impression and get the funding you need.
Your business plan should start with an industry overview, which serves as a sort of introduction. This brief section will discuss the general state of the construction industry to serve as a lead in to why you believe that your business will be profitable in this area.
The Industry Overview section should include some publicly available statistics on construction and rental industries, total revenue in the country and the state, growth percentages over the last few years, and other very general information at this point in your plan.
The Industry Overview
The executive summary.
The executive summary is just that, a summary. In this section, you can go over why you’re interested in starting a construction equipment rental company, what kinds of services you’re going to provide, and some details about your background.
While this is one of the first sections of any heavy equipment rental business plan PDF template , it’s often the best practice to write it last. Because it serves as an introduction to the remainder of the plan, you should have a very firm idea of what’s to follow.
Next, you’ll need a thorough description of what your actual services are going to be. In the case of equipment rentals, you’ll describe that you’ll be acquiring equipment to rent to individuals and companies in your area.
At this point, you should consider if rentals are going to be your only service. Most rental businesses sell at least accessories for some equipment and often provide repairs as well. If you intend to provide additional services, you’ll have to include them here.
The Mission Statement and Vision
While this section might seem like a bit of departure from the more practical parts of the business plan, it is expected and will be included in any construction equipment rental business plan PDF templates.
Here, you’ll generally explain that your mission statement and vision are to provide quality service as a rental business and to thrive within the market. You don’t have to make up something about values or principles; you’re here to start a business.
The Structure and Roles
Getting back to the details of how your business is going to run, you’ll have to define what the roles in your company are going to be. Depending on the size of the business you’re setting up, are you going to be the CEO, owner, manager, or all three?
Small businesses could just be one person, or perhaps several who all share in a variety of duties. For larger endeavors, you’ll have to define roles like maintenance manager, rentals and leasing manager, and more.
The SWOT Analysis
SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. It’s a way of looking at your business to find which areas you believe you’ll excel in and which will present challenges.
For your strengths, you might like to mention any past experience in either equipment or business in general. You don’t want to go too far into your weaknesses, perhaps just mentioning that there are plenty of competitors, but make sure to mention how your business plans to differentiate itself.
Your Sales and Marketing Strategies
Here, you’ll have to explain how your business plans to present itself and put itself out there to get started and find customers. Some common strategies might include brochures, a website, social media, or ads in local print publications.
You should also specify who your target market is supposed to be. Are you exclusively renting heavy equipment to construction contractors? Are you renting smaller equipment to mostly homeowners?
Your Sales Forecast
When dealing with lenders, they’re going to want to know how much money your business plans on making. While determining these kinds of forecasts can be difficult, you can often base them on industry averages within your region.
These should be broken down by fiscal year, so basically stating what you forecast your sales to be in the first, second, and third years of operation. Any information about a similar business would be very helpful in putting this together.
Your Pricing Strategy
So you’ve acquired some equipment to rent out, but how much does it cost to rent? Are there additional fees? Do customers have to put down deposits? What payment methods are accepted? These are some important questions to answer in your pricing strategy.
This section should also reference the ratio between equipment costs and rental rates to demonstrate that equipment rentals will be profitable over the lifetime of the equipment.
Your Business Expenses
Of course, your business plan is going to have to include a breakdown of your expected expenses. This breakdown will have to include both the initial expenses of opening your business and the ongoing operational expenses you can expect to continue into the future.
Your startup expenses will play a big part in justifying any loans you’re seeking, and a well-defined explanation of operational expenses will play a big part in demonstrating that your business can be profitable.
If this all sounds like a bit much, you can greatly streamline the process of developing your equipment rental business plan by downloading our straightforward business plan template PDF.
Setting Up Your New Rental Business for Success With Quipli
Even with an effective business plan, your rental business needs careful oversight and the right tools to succeed. Quipli provides an integrated platform that combines your inventory management and online presence to make online bookings that much easier for your customers.
To find out more about the many features of the Quipli platform and what they can do for your business, Contact our Team at Quipli for a demo of online equipment rental checkout software t oday!
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About the author
Kyle Clements is the Founder & CEO of Quipli, a provider of modern software for independent equipment rental companies. Kyle has a decade of software startup experience and has been part of several successful ventures that have become publicly traded or been privately acquired, such as Uber and Clutch Technologies. In the past few years, Kyle has completed thousands of customer interviews understanding needs and trends in the growing equipment rental market. Kyle brings a unique perspective to the equipment rental industry and is passionate about partnering with independent equipment rental companies to run their operations more effectively and assist them in creating an impactful experience for their customers.
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Equipment Rental Sales Business Plan
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Executive summary executive summary is a brief introduction to your business plan. it describes your business, the problem that it solves, your target market, and financial highlights.">.
Equipment Rental, Inc. (ER) is a Breaux Bridge, Tennessee company that sells and rents heavy equipment such as dozers, backhoes, excavators, and trenchers as well as small home use and construction equipment such as tillers, augers, and chain saws.
ER has obtained the authorization to be a distributor for Hancor Pipe, Stone Equipment, Pro-Cut Diamond Products, Echo Lawn Care, Compact Excavators, and Skid Steer Loaders. The company is the only authorized distributor for the South-Tennessee area for Ramrod Equipment and Komatsu Forklifts.
ER has a world-class management team with direct knowledge of the industry, extensive research experience, and unique administrative skills. Its team includes Mr. David James and Mrs. Sally James. Having lived in Denton Parish for six years, and worked throughout the state, as well as parts of Texas, Mississippi, Alabama, and Georgia, President/CEO, Mr. James has compiled an extensive list of customers/potential customers, vendors, and contacts for equipment consignment.
The company plans to employ two people from the area, in positions within the shop. By employing local individuals, ER would be contributing toward the development of the area. Funds would remain in the area thereby boosting the economy and contributing to the community as a whole. Loyal customers help to expand the company’s business area by word-of-mouth and a pocketful of ER’s business cards.
A key component of the company’s strategy is to continue to add to its ever-increasing product line which currently includes homeowner equipment from Echo and Interstate Batteries, commercial, equipment from Ramrod, Compact S/I Technology, and industrial equipment from Komatsu.
The company is seeking a loan/credit line in the amount of $300,000 for the purpose of expanding the business. Expansion plans include the purchase of additional land and construction of a larger shop/service area, increase rental inventory, purchase of delivery truck, and the hiring of additional personnel including a mechanic and delivery driver. Projected revenues for Year 1 to Year 3 are $210,000, $420,000, and $840,000, respectively.
ER’s mission is to become THE exclusive full-service equipment rental, sales, and service company in upper and lower Denton Parish with the ability to service the surrounding parishes of Memphis, Knoxville, Grand Prairie, Plano, Garland, Irvine, and Riverside. Therefore the company’s strategy is to create a limited geographical niche for itself where there are no potential competitors.
ER’s vision is to continue to expand its service to other areas. The company’s coverage area is constantly increasing, as the areas are becoming aware of the company’s presence.
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Construction Equipment Rental – Profitable Business Plan
Construction businesses require heavy equipment for several tasks. And it is not always possible to purchase this bulky equipment and block their finances and space. So instead, they will prefer to rent the heavy equipment and return it to the company once their job is done. Hence, more and more construction businesses are looking for corporations that can provide them the requisite equipment on a rental basis.
Well, if you decided to go into the heavy construction equipment rental business, congratulations! You are good to go! But you are supposed to remember a few facts about this venture. For instance, remember that it is a capital-intensive business. If you have limited capital, you cannot think of diving into this business. Secondly, it is advisable to seek the advice of a consultant or an advisor regarding the planning and implementation matters.
You cannot simply start this business just because an idea stuck with you. You ought to do your research and feasibility studies and not miss out, a lot of business planning before starting this venture.
Writing a business plan is crucial , and that’s why we are here to help you out. Follow the below business plan sample that will help you in starting the business.
Construction Industry Overview
The revenue generated out of the construction equipment rental is a whopping $38 billion and is projected to grow at the rate of 4.8 percent in the last five years. You can find more than 18,000 equipment rental businesses in the United States. Since construction activities have been on the rise in the country due to several factors, there is a surging demand for related equipment hire.
But one has to note that there is more demand for hi-tech machinery that is also eco-friendly and has low maintenance elements. Compared to the demand for traditional equipment, the demand for such advanced yet sustainable equipment can be seen on the rise. Consumers have higher purchasing abilities to rent the equipment instead of buying it.
Being a standard and registered business, your company should have a unique yet easy-to-recollect name and must have a good location in a city where construction activities can be seen in a large number. The next thing is to specify your services, intentions, work values, and ethical standards, promises, and other aspects that will drive the person’s attention reading your business plan. It should also serve as a motivating factor for the business partners in the future when they lose the energy to carry forward the business.
Mention all the driving factors, including the experience and qualifications of the owners involved in the business. You can also write down the work standards you will be following while delivering service and client support as and when needed.
The equipment rental services provided by your company are of all types and are time-bound. The intention is to generate profit but as per the laws defined by the United States.
- To provide equipment on the rental basis such as trenchers that are useful for construction companies.
- To sell materials and tools such as chainsaws.
- To distribute equipment for all manufacturing companies.
- To repair equipment and tools set up at the manufacturing units of companies.
- To train staff on how to use certain equipment as it is rented to them. This ensures that you will get your equipment back in order and not with issues.
- To provide consultancy and advisory services accordingly.
To set unique goals and objectives for the business, to thrive and be the number one in the relevant business, and create no competition in the industry. To become a well-known rental brand in the country.
To be the best equipment rental business in the city, and rank in the top equipment rental businesses in the United States in the coming five years.”
Business Structure – Jobs and Responsibilities
The business structure consists of several job positions and responsibilities that can be created to provide your specific products and services to the customers. Remember that you will need a huge number of manual staff as well as skilled staff to carry out the said duties and responsibilities.
- CEO – The pioneer, he is the person to evaluate, monitor, and take over project work.
- Manager – Rental and Leasing – He will handle the given projects, allocate resources, and check at each stage whether the project is at par with the expectations or not.
- Manager – Maintenance and Purchasing – He will be responsible for the purchase and maintenance of the said equipment.
- Truck drivers, security guards – they are required for the said tasks.
- HR Executive – He will handle the administrative as well as recruitment and selection of staff activities.
- Marketing Executive – A business needs to be promoted, and a marketing executive knows how to do it.
- Accountants – They will process accounts and financial statements on a per-project basis and as a whole.
- Client Executive Officers – They will communicate with the clients on behalf of the company.
This assessment tool seems to be classic as it still helps a business gauge its abilities and discrepancies without lowering morale.
- Strengths – Online available, easy response to the queries, a keen desire for customer requirements, and more prior experience in the rental industry.
- Weaknesses – Chances of saturation of the businesses and insufficient finances.
- Opportunities – Long-term goals, advisory services, and other opportunities.
- Threats – Competition and economic recession.
Even if the name says you need to rent equipment, you can indulge in several activities such as the sale of heavy equipment, distribution services, advisory and consultancy, and training services. It doesn’t have to be limited to rental activities. The following target audience will be interested in availing your services:
- Construction companies and agricultural entities.
- Mining and aviation industry.
- Business organizations are involved in the supply of medical devices, forestry, and other equipment.
- Waterways and railways.
Business Sales Forecast
If you have planned to provide all the services mentioned in the Services Section of this business plan, you shouldn’t aim less. You should raise your revenue standards as you can expect clients and businesses all the time availing your services.
It could be $800,000 in the first year, and you can double it in the following years. But ensure that you have a solid marketing and sales strategy going in hand with the sales objectives you set.
Sales, Marketing, and Advertising Strategies
You should know to hit the hammer at the right place. It means if you are into the rental business, you should target only those companies who are in dire need of equipment and tools or need advisory services in connection with the same.
- Introduce your business and associated services to the target audience in your area and city. You can send them brochures and make a presentation at their workplace.
- Do not underestimate the power of print media – newspapers and magazines, and traditional media such as newspapers and TV. They will surely help you to create awareness of your brand in the city.
- Use digital media and direct marketing techniques – website, social media, and meeting with concerned authorities.
- Listing in online and print directories. You never know who will come across your brand.
- Advertise business using Google AdSense.
Business Pricing Strategy
Pricing strategies will only be effective if you do enough feasibility analysis in connection with the costs and charges levied by other companies. Go a little overboard and study cases of reputed rental companies and how they achieved success. It really helps you to set competitive and reasonable prices and still achieve the sales predictions.
Since you understand client specifications, ensure that you customize packages and payment modes for them.
Business Expense Estimates
The expenditure during the start-up phases of the company is a huge concern. Since you will be purchasing heavy construction equipment, you cannot lower or compromise the budget. It could be between $1,000,000 and even more than the said amount. A proper financing strategy can help you get out of the mess and streamline your funds.
We are hopeful that this business plan is of help to you.
You can rent a variety of construction equipment such as excavators, skid steers, boom lifts, scissor lifts, trenchers, and more.
Rentals can be for as long as you need them—from days, to weeks, to months.
Rental options include short-term, long-term, and rent-to-own options.
Yes, most construction equipment rental providers have a minimum rental period which is typically a day or a week.
Yes, most providers will require some sort of insurance coverage on their equipment.
This depends on the rental provider and the terms of the rental agreement.
Yes, most companies offer discounted rates for long-term rentals.
Yes, many companies offer delivery options for an additional fee.
Most companies accept cash, checks, major credit cards, or wire transfers.
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7 Tips for Running a Plant Hire Company for Young Players
1. plant hire cashflow problems - you’re either a hero, or at zero..
The lumpiness of cash flow in construction subcontracting, at every level of the industry, has taken down literally thousands of companies in what seems like a blink of an eye - from some of the biggest and best contractors and plant hire companies, to the smallest of owner-operators. Over the last six years, we’ve watched hundreds of companies go down in smoke over non-payment of contracts, or delayed payments.
This is one aspect of the industry that is spectacularly unfair and not correctly regulated - which is made even more ridiculous when you consider that a big pile of the ‘liquidity’ in the contracting industries is paid by the government, and is done so purely for the purpose of redistribution through the community and economic growth.
But my opinion on the macro-economic flaws of construction aside is you have to play the game, the way its played. If you work in construction, you need to manage your cash-flow to prepare for the worst eventuations and possibly act way more prudently than if you work in any other industry, because these problems are rife. There is no need for you to become a statistic. You need to expect that you won’t get paid, or payment will be delayed, and keep more cash in your business than you otherwise would if you are working in any other industry.
So many of our customers have told us (slightly amusing) tales of mistakenly believing their a ‘big dog’ when they take a lumpy invoice payment, then they start splashing it around on things like helicopter pilot lessons, dirt bikes, tricked out beamers and boats (real-world examples). Indeed, when you start doing things like this, you are on borrowed time and borrowed money. Most of that money will go out the door, with little more than 17% - 20% will stay in the business (based on the average gross margin of plant hire companies across the board). But as per my previous advice, you should keep all the business for a rainy day, and permanently delay your helicopter pilot aspirations until you actually own a helicopter, which for most plant hire companies - is a LONG time from now.
HOT TIP: If you are in a cash-flow bind and you need payment of one of your invoices early to keep the wheels of your business greased, you can use ‘factoring’ or debtors solutions to bring the payment of those invoices forward by outsourcing them to someone else. We have a great partner in this space, called Premium Funding - click here to learn about how debtors solutions can work .
2. BAS payments for plant hire companies - the sneaky buggers really creep up on you
BAS payments in a plant hire company are like the grim reaper lurking in the distance - they seem to descend on you when you least expect it (even though they are due at the same time every quarter - wink, wink). Given the payment delays of many contractors to payment terms exceeding 90-120 days, your BAS can be due on revenue you’ve not received any cash for. In some cases, you might not receive for another 30-60 days beyond needing to account for it as revenue, and then needing pay your GST. This can sometimes be the thing that quickly sinks a small business if it's not managed the right way.
HOT TIP: ATO Payment Plans for plant hire companies - the ATO does offer payment plans to going concerns that are in reasonable financial shape and interestingly, let you pay your tax obligations down at an agreed rate, plus about 8% interest (this might be subject to change). Those of us who run small businesses will know that it's really hard (after the banking royal commission) to obtain low cost debt and cash-flow solutions. So the ATO payment plans can actually be, in some cases, the lowest cost debt available to your business. It can just be a good way of smoothing out your statutory payments over a short-term cash-flow issue. Click here to use their calculator .
3. Sponsoring race cars
Sponsoring race cars, in the opinion of a very experienced construction marketer - is straight up the dumbest thing you can do with your money, if you are seeking to invest your hard earned dollary-dos in growing your business. If it's a hobby, fine - go ahead - but don’t do it under the delusional assumption that it will actually provide your business with any meaningful advertising, lead generation or brand awareness for the money you will spend. Having your brand wedged on a speeding car, next to a million other brands, as it wurrs in circles in front of a crowd of drunken monkeys sitting in stadium seating at a distance that makes your tiny brand illegible, provides no meaningful benefit to your business and will not, in anyway, convert a lamen in the stands to a customer. Unless you're Coates Hire and sponsoring the whole event (and even then there are literally A MILLION other things I would do to generate online leads before I did this).
HOT TIP: Don’t sponsor race cars.
4. Dodgy Tax deductions
“No, your mountain bike rack ISN’T a tax deduction’ The above example (of a mountain bike rack being used to store a ladder) is not a tax deduction, it's funny, but it's not a tax deduction. Buying a camping generator and saying it's for the business is not a tax deduction either. Naming your boat ‘Mini Excavator’ and getting the workshop to service it - is borderline, but not a tax deduction and not a normal expense (despite being incredibly creative - and indeed a real-world example).
The ATO is getting very good through the use of data analytics at flagging submissions that have higher-than-average amounts of deductions or claims (based on industry and occupation profile) and can arbitrarily go after you - which causes a costly, life-changing, impossible to actually pass audit and flags all of your future submissions. You cannot underestimate how bad this can be for your business, and generally your quality of life if this happens to you.
HOT TIP: Here is a link from the ATO around the total list of claimable expenses for small businesses . Don’t forget, keep receipts!
5. Bad (or no) Contracts (if your client won’t sign one, run….)
The majority of our smaller plant hire companies are bad at admin. I’m not trying to sledge 47% of my customer base - I’m just being honest about what see going on everyday at iSeekplant . Bad correspondence, non-legally binding agreements, no contracts, no actual paperwork, no PPSR and no correct documentation. It's at chronic levels in the industry - and it's pretty much the source of all other headaches in this article. If you have crap contracts with a customer - that are not complete, not legally binding and not signed, then you have nothing in the case of a dispute over payment or hours, and very limited risk protection if they go under.
If a client won’t sign a contract to hire your machine, don’t hire it to them. You can’t tell me that a civil engineer or project manager isn’t used to signing contracts to hire machines - they do it every day with the big guys when they hire from ( Tutt Bryant , Kennards , Brooks , Delta Rent , you name it). They sign contracts to hire god-damn gensets, they can sign a contract to hire your 20 tonne excavator.
If a client is trying to do handshake deal with you because your a small operator, all the while signing the contracts of other big plant hire companies for smaller machines and companies that have WAY less to lose than you, then they are trying to screw you whether they ever admit it or not, or you can admit it to yourself (even if you are excited to have the work). They want the flexibility, they don’t want liability and they don’t want recourse - which means they are the most likely to off-hire you in a heartbeat, not pay you or screw you down to no margin when you’re onsite.
These guys are used to signing contracts - so get them to sign yours. You have a right to protection.
6. Hitching your wagon (literally and figuratively) to a bad finance company
Most first-time machine purchasers for their business get screwed when financing a machine. This is because they have very little credit leverage to use in a finance conversation, and often-times because they access the wrong types of credit to fund them into a machine. This can have ongoing consequences for burgeoning plant hire companies for years (because you’re paying your machine off for years).
In the early years, as you are building your business - you often have to do a bunch of jobs at lower-than-market rates, so you can prove yourself and develop a reputation and quoting practise that you will evolve and take with you from job-to-job. So, your margin is already low, and your making massive machine repayments. It will put financial pressure on your business, sometimes to the point that you’re in a hole (pardon the pun) that you can’t get out of. HOT TIP: Our partners at Finlease are the experts in finding the right finance product for the stage your business is it, and ensure that you get the best deal available to you. They are also great blokes. Click here, you can tinker with their finance calculator or email them your details.
7. PPSR for plant hire and rental companies - It's so boring and hard, but so worth it.
If you don’t register your machines on the PPSR, and update every time you shift a machine onto a site, then if a contractor becomes insolvent and is forced into liquidation, your machine can be considered their property and retained by the liquidators until you can prove ownership - usually with your PPSR registration. We’ve heard some CRAZY situations where someone’s entire fleet has been locked behind a fence in a contractors yard waiting for the liquidators to pull their finger out and do a stocktake, and determine machine ownership. We’ve also heard other crazy stories where, in lieu of the correct ownership paperwork, the plant hire company has not been able to prove ownership and they’ve lost the machine to the liquidators.
It's boring, it's paperwork, it's hard to get right, but it's critical. Click here for the full work up.
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