Running a successful equipment rental business is about more than providing the tools your customers need. It's also about optimizing your operations to boost your company’s profitability.
The good news is that there’s loads you can do to accelerate your rental business’s growth. From marketing to upselling your services, here are 6 strategies we’ll cover in this blog:
Calculate equipment profit and loss
To increase your income and grow a successful equipment rental business, you need to figure out where you’re bleeding money.
Start by determining which pieces of equipment are losing you money. To do this, look at past events and bookings from the last six months. Check which items are the least popular and which items have not been rented out at all. Then look at maintenance and insurance costs for those specific objects. If storage and maintenance are costing you more than the revenue they bring in, it's time to sell those items. And invest that money into high-ticket or more popular pieces of equipment.
Using an equipment management solution, this task is easier as you have access to a serial-level breakdown of each piece of equipment. So you know exactly what items to sell and what items to buy next.
Understand your business's labor costs
Unexpected labor costs happen. From overtime to last-minute changes which demand more time from your crew members. It’s normal for rental equipment businesses to face occasional labor cost variations.
But, these extra costs shouldn’t be routine. Because such expenses add up.
To stay on top of these expenditures, implement a time-tracking system to accurately track and calculate your crew member’s hours.
Use this data to your advantage. Identify who’s clocking in the most overtime, optimize scheduling, and create more accurate client quotes that reflect the true cost of labor. Ensuring you don’t need to pay for unexpected work changes out of pocket.
Insure your gear against damage and theft
Running an equipment rental business involves risks. And even with the best planning, accidents happen. Items get damaged or broken at events. However, this shouldn’t cut into your rental equipment’s profit margin. Especially if you rent out bigger or more expensive pieces of equipment.
To cover your bases, consider taking out equipment rental insurance. These insurance policies will cover the cost of replacing equipment. And they will protect your company from lawsuits by paying for defense and damages if you're held accountable.
The extra cost will set you back between $37 to $99 per month but will typically provide coverage of $1 million. However, such a step not only brings you peace of mind. It will also safeguard you against unexpected high costs due to factors that are out of your control.
If you want to know more about specific policies and explore your options, check out:
Offer upselling options on your rental services
Upselling your services increases your equipment rental revenue while minimally impacting your operational costs. And it’s a lot easier to sell more to clients that are ready to buy than finding new prospective customers.
So consider introducing convenient upsell options that enhance the customer experience. Such opportunities provide more value while also giving you extra income.
For instance, offer equipment delivery and pick-up services. Or cleaning services or packaging services. Anything that would save the client hassle and time is of value.
You can pitch these add-ons or simply include them as optional elements in your client quotes. Then clients can pick and choose whichever option they need.
Partner with local venues
Depending on the type of equipment you rent out, there are likely limitations to the venues you can operate from. Collaborate with local venues to boost your equipment rental’s profitability.
For example, say you provide rental equipment for small to mid-sized concerts. There are most likely only a handful of venues suitable for this type of assignment. Establish a partnership with these event spaces to become the go-to equipment rental company whenever artists book the space.
Offer exclusive deals, preferred rates, or a kickback fee to the event space. And watch as a steady stream of customers pours in.
Implement a rental equipment software
Having to manually process and track equipment availability and orders coming in is costly, time-consuming, and increases the chances of errors.
Keep chaos at bay while making your business more efficient and profitable by implementing equipment rental software such as Rentman. Our tool provides you with a centralized and real-time overview of your entire equipment landscape. Ensuring that the right items are available at the right time and that your company doesn’t miss out on bookings.
Here is how you could improve your stock efficiency by implementing rental management software:
- Scheduling more equipment: the average number of scheduled equipment can grow significantly because now you have more control over your stock movements.
- Increasing the number of items in the database: you can manage more equipment in case of the increase in the number of projects.
- Reducing the number of missing items: you can find warehouse items more easily due to improved traceability for warehouse items. On average, Rentman customers have an increase of scanned items by 185% (according to the research based on 7 randomly selected Rentman users).
Act now to save later
Although most of these measures mean investing time or money to implement them, they ensure your rental equipment business will stay profitable in the long run.
Taking action now can boost your income by ensuring less stock sits on your shelves, lower labor costs, and protect you against broken items. All the while bringing more value and ease to your customers and employees.
And if you want to experience how equipment rental software can help you grow your business smarter, try Rentman free for 30 days. No credit card required.