How much does it cost to start an equipment rental business?

• With a budget of $1,000,000 in purchasing power, you can buy the following pieces of equipment:

  • 4 Excavators at $150,000 each = $600,000​

  • 4 Skid Steers at $100,000 each = $400,000

• Loan Information:

  • Down Payment: 20% Down = $200,000​

  • Monthly Payment: $11,020 a month with a 10% interest rate.

  • Insurance: $1,000 a month. If you need insurance, reach out to Wexford Insurance. wexfordins.com they work with numerous equipment rental businesses. 

• TOTAL START UP COST: $200,0000

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How much money can you make with an equipment rental business?

• Equipment Rental Businesses can make up to $600 a day for an Excavator Rental and $400 a day for Skid Steer Rental. 

• The average rent duration is 4 days.

• Equipment Rental Business Similuation: 

  • 8 Days of Rent a month per each equipment​

  • $600 * 8 days = $4,800 a month for each excavator * 4 excavators = $19,200 a month

  • $400 * 8 days - $3,200 a month for each skid steer * 4 skid steers = $12,800 a month

• TOTAL REVENUE: $32,000 a month = $384,000 a year.​

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Are Equipment Rental Businesses Profitable?​​

• Yes, if the equipment is rented out 30% of the month, usually, equipment rental companies can cashflow. See simulation continued below:

  • $32,000 a month revenue​

  • $15,000 a month in expenses

  • $4,166 a month or $50,000 a year in maintenance

  • Cashflow: $12,900 a month profit = $154,000 a year profit!

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Positives of a Equipment Rental Business

• This business is semi-passive. Once your equipment is rented out, you sit back and wait for it to be returned.

• This business does not require a ton of employees since you are renting out equipment.

• If planned correctly, this business should always be profitable. 

• This business can be sold and other people are paying your loans on your assets. Overtime, you end up with equipment that is paid off. 

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Types of Equipment Rental Businesses

• Heavy Equipment Rental Business

• Small Tools Equipment Rental Business 

• Canoe and Kayak Rental Business

• Party Tent Rental Business

• Crane Rental Business

• Truck Rental Business

 

How to Start an Equipment Rental Business 

1. ​Save up money for expenses and down payments.

2. Form your LLC with the Federal Government and Local Government

3. Create your website and social media pages

4. Purchase Insurance

5. Find a Lawyer to draft your customer service contract

6. Implement local marketing. ​