7 Steps to Start an Online Equipment Rental Business

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7 Steps to Start an Online Equipment Rental Business

The online equipment rental industry is witnessing explosive growth, with rental eCommerce platforms taking center stage. According to the ARA forecast, the industry is in its post-pandemic recovery stage with nearly $37.5 billion current yearly revenue. However, as the industry’s growth rate is high, it is expected to add $10 billion to its market by the end of 2025. 

How is the equipment rental industry recovering Fast from the Pandemic? 

One reason can be due to the presence of global construction and mining projects. Those that were put at a halt during the pandemic are again resumed, and there’s an influx of new private and public sector projects. Due to these reasons, the industry quickly embraced the post-pandemic change and established diverse channels for reinstating lost business opportunities. 

Online Equipment Rental Business Checklist

Although the equipment rental industry is still recovering from the pandemic, it entails lower entrepreneurial risks than other industries. As a result, it is a highly lucrative sector for both asset-light and asset-inclusive startups. This blog has outlined a brief checklist that can help entrepreneurs draft a strategic equipment rental startup plan.

Before we begin, below are the categories that the checklist will cover: 

  • Market Research
  • Budget Preparation
  • Important Paperwork
  • Services and Products
  • Supply Chain Establishment
  • Marketing Channels
  • Human resources
  • Software Technology

1. Market Research

Comprehensive market knowledge will act as the fuel for driving your startup in the right direction. It will help you find and define various fundamentals such as:

  • Market competition
  • Target regions
  • Consumer demand
  • Value proposition, i.e., the products and services
  • Buyer personas
  • Pricing mechanics
  • Logistics infrastructure
  • Growth opportunities 
  • Legal obligations

Each of the aforementioned is a necessity to make well-informed decisions. 

2. Budget Preparation

The budgeting process is complex for startups due to the higher chances of paradigm shifts in the business plan and unprecedented instances. However, it is recommended to create a budget beforehand for at least the first year of your startup. The first annual budget for your online equipment rental startup can include the following: 

  • Office establishment costs
  • Trademark registration costs
  • Business licensing costs
  • Partnership costs
  • Utility bills
  • Salaries
  • Insurance premiums
  • Equipment maintenance costs
  • Software infrastructure costs
  • Marketing and branding costs

3. Paperwork

Entrepreneurs need to obtain several licenses to stay compliant with the government regulations regarding industrial machinery and equipment. These licenses can vary from region to region and market to market. Therefore, only the legal advisories of your target regions can consult you on the most appropriate licenses. You can find the list of all other necessary paperwork below:

  • Investor agreements
  • Business insurance
  • Bank statements
  • Financial agreements
  • Partnership documents
  • Trademarks
  • Policy documents

4. Supply Chain Establishment

Online equipment rental businesses require large warehouses with well-established logistics infrastructure considering the tremendous size of heavy equipment. The only exception here is multi-vendor marketplaces that follow an asset-light model. In these types of businesses, the marketplace owner allows various vendors to upload their equipment listings, responsible for managing warehousing and transport operations. Otherwise, some important supply chain elements owners need to search for equipment rental business are:

  • Warehouses or warehousing services
  • Suppliers, such as vendors and contractors
  • Procurement and transportation facilities

5. Marketing Channels

Online equipment rental platforms operate under the B2B sector, delivering heavy equipment to contractors, engineers, and more. To promote the business, entrepreneurs can consider the following channels. Note that the following list is also inclusive of branding channels:

  • Social media handles (particularly on LinkedIn)
  • Google My Business listing
  • Official website
  • Official email and contact numbers
  • Business affiliates
  • Sponsorships
  • Display advertising
  • Pay-Per-Click
  • Product distribution channels or branches

6. Human Resources

The required human resources for an online equipment rental business depend on budget, business requirements, business model, workflow, supply chain, and more. However, the owner needs to assign some key personnel for business management and operations. At a startup level, the business team can include:

  • Executive personnel (chief officers, directors, vice presidents, and managers)
  • Human resource management
  • Marketing executives
  • Sales executives
  • Website administrators
  • Financial Accountants
  • Customer care executives

7. Software Technology 

An online equipment rental business needs software technology foremost for conducting rental operations and receiving digital payment. The second most important function of the software is inventory or product catalog management so that the website admin can upload new products. The third but not the least essential operation for which rental software is required is order management, which includes viewing completed and pending orders, accepting/rejecting orders, etc. 

To list it down, online equipment rental businesses will require software capabilities for the following operations:

  • Displaying equipment listings and their prices
  • Accepting rental orders
  • Managing completed and pending orders
  • Receiving rental fees and security
  • Providing customer support
  • Providing business information
  • Scheduling delivery
  • Managing reimbursements
  • Conducting marketing operations

Connecting All Dots

Any successful business launch requires appropriate market research and advanced budget preparation for conducting long-run operations. The same is the case with tech-inclusive online equipment rental businesses and have a better reach potential via diverse online channels. Backed by a competent team of web administrators, managers, sales executives, and customer care executives, online equipment rental startups can aim to establish relations with critical industrial personnel and initiate remunerative business operations. 

However, along with an actionable business plan, you will need comprehensive knowledge on multiple facets such as industry trends, growth rate, technological advancements, political and legal scenarios, social outlook, and more to ensure a smooth startup. Interested entrepreneurs can find all this information in our in-depth equipment rental guide that you can find here.

7 Steps to Start an Online Equipment Rental Business