When you first open an equipment rental business, you want to be sure you are charging competitive prices for everything you have in your store. You also do not want to charge too little such that you are not able to pay your own bills, but charging too much could have the same disastrous results of no income and unpaid bills. Here are a few guidelines you can follow as you open your rental business to the public and to construction companies and you are trying to decide what to charge as a rental fee for everything in your store.
Lists from Your Top Fifty Competitors
Your first step, even before you consider opening a business of this sort, is to find fifty competitors within a forty-mile radius and list at least fifty of the most frequently rented items and what every one of these competitors charges. This will give you an idea of what the general price range is, how long the paid rental fees give the customers the opportunity to use the items they rent, and how you might be able to improve upon what your competitors offer. If you can charge less than what half of your competitors charge, and still afford the purchase price of all of the rental items in your store as well as the monthly store bills, you could make a decent go of it.
Providing More Value to Encourage More Business
You know that customers are always looking for more value at a lesser cost. Look at how you can rent out a crane for more than week, perhaps at a discounted daily rate or discounted weekly rate so that the items are rented longer and you have repeat business. Extending discounts on rentals or extending the length of time an item may be rented while also discounting the rental fees will encourage others to rent from your store as well. Always keep in mind that there is a delicate balance between providing more value to your customers on their rentals and making enough money to pay the bills.
Calculating and Balancing Business Costs While Offering Rental Program Alternatives
You may have to calculate in advance what is the least amount of money you can rent everything for and still turn enough of a profit to cover everything. For construction equipment rentals (from outlets like LAX Equipment Rental), this may be very difficult to achieve because the backhoes, the pavers, the cranes and other heavy duty machines are very costly to purchase. You may have to place a cap on the number of days an item is rented and then require a fresh rental contract to renew the rental or a rental program that pays you more the longer the construction company keeps the item for their use.
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