How to Start a Tool Rental Store
Homeowners, contractors and small-business owners in need of tools and heavy equipment, who either can't afford to buy the equipment or lack the room to house it, often turn to tool rental companies. Your rental company should provide tools and equipment that are in excellent operating condition, manuals or instructional demos, and equipment delivery and pickup options. As well, you may sell or rent safety equipment and older equipment in need of replacing.
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Things You'll Need
- Significant capital
- Business plan
- Equipment
- Tools
- Commercial space
- Insurance
- Business permit
- Commercial driver's license
- Driver
- Website
Instructions
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1
Conduct market research to determine the most in-demand tools and equipment in your area. If snow is a concern, renting snow plows may be a good idea. Trailers, jackhammers, lift equipment, generators, air compressors, pressure washers, wood chippers, saws and carpet cleaners are also popular. Ask homeowners, home renovators, landscapers, carpenters and contractors how your equipment rental store could best serve them. Visit bulletin boards at home improvement stores or Craigslist.org to get an idea of equipment that homeowners are looking to rent.
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2
Develop a business plan. Heavy equipment can run into the tens of thousands of dollars. If you intend to procure financing, you must have a comprehensive business plan that details your operations. Include your market research to help show the demand and need for such a business. Detail popular tools and equipment, along with quantities and expected cost. Detail all expenses, such as insurance, permits, licenses, maintenance costs, payroll and advertising, and then create a price list for daily and weekly rentals. Use this to determine when you can expect to begin turning a profit. Present this plan to your financiers.
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3
Secure commercial space for your business that can accommodate your tools and equipment and offers easy access for moving heavy equipment in and out of the building. Look for adequate showroom space and a garage for repairing your equipment. You'll also need substantial parking for any commercial vehicles and trailers, and room to load tractors and other heavy equipment. Obtain zoning authority for your commercial space and secure a business license.
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Contact your licensing department to learn the rules governing the operation of heavy equipment. In addition to a commercial driver's license (CDL), you may need to obtain additional training or permits prior to operating or renting certain equipment. As well, you will need to ensure that your facilities meet the Occupational Safety and Health Administration's standards.
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Contact popular tool and equipment manufacturers to purchase in-demand power tools and equipment. Start conservatively; you can always purchase higher quantities later. Purchase trucks, flatbeds, dollies, hauling and safety equipment. If necessary, outfit your commercial vehicles with Department of Transportation decals.
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Purchase general liability, auto liability and equipment insurance. If you have homeowner's or renter's insurance, start with your provider. If they don't offer business insurance, they should be able to connect you with someone who does. Consult with an attorney when drawing up the rental agreements.
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Hire a driver who holds a commercial driver's license to conduct delivery and pickup, which you may want to offer for an additional fee of $50 to $100, depending on the equipment and distance.
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Invest in accounting and inventory management software to help you better manage business operations and to minimize the need to hire an assistant to help with the bookkeeping. However, it will still be necessary to consult with a CPA to give you a solid understanding of your tax liability as a self-employed person and employer.
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Purchase a website and develop an online catalog of your inventory and rates to place on your site. List your business in the Yellow Pages, both online and off, and open your doors.
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Tips & Warnings
Have copies of manuals on hand to lend to customers. Laminate the manuals and make copies for each piece of equipment.
Offer training or demonstrations. Be sure to include that in the cost of renting.
Hire or contract with someone who knows your equipment, can clean it, test it and perform all maintenance.
References
Resources
- Photo Credit construction worker, image by Greg Pickens from Fotolia.com
