This post was originally posted on Construction Business Owner - find it here.
Get your unused equipment ready to rent & off your jobsite
Construction equipment is expensive to own, and when it sits idle, it doesn’t contribute to your bottom line. Lending equipment is a great way to generate extra revenue when you are not in the midst of a project or if you are waiting for busy season. But what do you have to know before listing equipment for rent?
Know the Terms
Craigslist has never been known for trustworthiness, and when you are handing a stranger the keys to your business assets, taking a risk on a classified advertisement site just isn’t worth it.
There are a variety of online networks that can connect you with trustworthy, professional contractors who don’t have the capital to own equipment themselves. These sharing-economy networks act as an independent third party to verify that equipment is well-maintained and ready for work, and that renters have the proper experience and certifications to operate the machines they are looking to rent.
When choosing to list equipment, consider differences in fee structures, insurance, delivery and your visibility into the project. Some rental networks will let you set your own price, allowing you to decide how aggressively you would like to compete with other lenders and giving you some flexibility on price as demand for certain equipment increases.
Be realistic about how long you can part with your machines. It may take some time to get your first rental agreement finalized, so be sure you have the time between projects or seasons to keep your listings up. You may also want to offer renter's extensions if they don’t complete a project on time. Have a clear idea of when your next project is coming so you can set a hard deadline for returns.
Lastly, make sure you are protected if something does go wrong. Some sharing marketplaces require renters to carry insurance or provide their own coverage to protect you if something more serious occurs and a renter can’t cover the damages. Regardless, it is a good idea to talk with your own insurance company about the risks involved and the extent of renters’ and networks’ coverage. Be sure to also consider that any damage to your equipment could affect your ability to complete projects.
Know Your Customer
If you've spent hundreds of thousands on equipment, it is reasonable to expect some sort of control over who’s using your machines and how they will be used.
The sharing economy popularized the idea of renter rating systems, and contractor equipment rental is no different. Your network should give you some idea of the experiences other lenders have had with specific renters, and they will tell renters how well your equipment met others’ needs.
A good rental network will also facilitate communication between you and your renter to help you understand the scope of the project. This can help you weigh the risks to your equipment, and gives you a chance to up-sell your renter on attachments for the equipment you are sending or on another machine altogether.
Finally, figure out where your renter is working. Will you need to ship equipment yourself, will they pick it up or will you need to find a delivery service? Some rental networks will deliver your equipment for you at no extra cost, so be sure to check if there are charges associated with delivery. Trailering equipment across the country or over borders, could eat into your bottom-line boost from renting equipment.
Put a Bow on It
Sharing networks make quality a key competitive advantage. Renters and lenders alike want their ratings to stay as high as possible to get more deals done. In the interest of getting two thumbs up, five stars or any other mark of great quality, remember the little things. Fill the gas tank and give your equipment a wash before putting it on a trailer. Make sure it is up to date with scheduled maintenance. Check that all the safety equipment is working properly. It never hurts to send an owner’s manual along with equipment, too.
Once you’ve gotten your first extra paycheck from renting equipment, you might start looking for more opportunities to send idle machines out for hire. If that’s the case, careful attention to rental terms, renters’ needs and the little touches will pay off. You may even find yourself adding a new line item to your revenue budgets.
Kevin Forestell is the CEO and co-founder of Dozr, an online heavy equipment marketplace connecting machinery owners with builders and farmers in need of equipment. Prior to starting Dozr in 2015, Forestell was president of Forestell Designed Landscapes, which he also founded. It was there that he grew frustrated seeing bulldozers, tractors and other heavy equipment sit idle during the winter. Rather than accept the off-season lull as a fact of life, Dozr was invented to provide an outlet for owners to generate revenue from their underused equipment. Visit dozr.com.