How to Make Your Equipment Rental Business Profitable?
The rental business model is quite different from the traditional business model in many terms. The prime factor differentiating the rental business is how it is marketed and promoted.
The rental business is also not the business that enjoys huge demand in every city. So the marketing and promotions have to be different from the traditional business types, and the customers must be brought in using a completely different strategy.
The rental business has its share of ups and downs because it directly deals with the customers, and if the customer perception or trust breaks, it harms the business’s revenue. Today we will discuss how rental business owners can positively impact their businesses and survive in the competitive market. So here is your guide to making your equipment rental business profitable.
1. Study the Market Consistently
No matter if you have been running your rental business for a decade, but still, you have to keep studying the market to understand factors like:
- What are the changing demands of the customers?
- What new equipment is available that you can rent?
- Which equipment do customers demand the most?
- How much your customers are willing to pay?
- Can you offer other services to become a one-stop destination for your customers?
- Is technology changing the format of your business model?
The rental business is only profitable when you update yourself on every aspect and continuously read what is happening in your niche.
2. Don’t Waste Capital to Buy More Equipment
There is no proven connection between buying more equipment and making more profit, and this happens with businesses that have excelled in customer satisfaction. So until your business has many loyal customers stay away from buying more equipment.
Instead, as stated in the above point, research what your customers rent the most and which is the most popular equipment. Idle inventory not just occupies space but demands a smaller portion of your capital on maintenance. So the money you could have used for expanding your business you end up on the maintenance of the idle inventory.
3. Maintenance of Equipment
The rental business model can be summed up in 4 words i.e.
No equipment, No Rental.
This is one of the reasons why you should keep a significant portion of the capital for equipment maintenance. Not only will adequately maintained equipment save you money, but the customers will also be less likely to complain about the equipment. If the rented equipment malfunction, it can cost you a valuable customer. So opt for regular maintenance, prompt and thorough repairs, and cosmetic fixes.
If you operate in the vehicle rental business, ensure the GPS systems work correctly. GPS systems help you track the actual runtime of the vehicle and help you figure out maintenance needs. You can also opt for advanced software for your rental business. The modern software for the rental company is very efficient in automating all the processes and sending notifications through the mail and electronic devices to notify the maintenance time.
W have written a step by step guide on maintaining rental equipment properly, you may read it here.
4. Take Your Business Online/Overhaul Your Online Presence
If you already have a website, it is vital to understand its impact on your business. Most customers look for services online rather than visiting brick-and-mortar shops. Even if you have a website that is incredibly dull and unappealing, you will not see a lot of inquiry.
Having a website or overhauling your online presence is vital for your business because customers look for better design, easy user interface, easy-to-understand content, proper equipment description, competitive rental prices, and clear terms and conditions. So having a professional website with exact information and easy to find online is the secret to a profitable rental business.
Besides this, you should hire SEO and Social media promotion services so that your website is easy to find online. It is because even the most creative websites are only useful when they get many visitors.
Luckily, you should not spend too much money on web development and SEO because Reservety’s Rental Software includes both the website and SEO tools to grow your rental business quickly.
5. Simplify Payment Options and Upgrade the Security
If you still follow the old way of payment options, then you are surely going to lose a lot of customers quickly.
Nowadays, customers prefer rental businesses that provide many payment options and utilize advanced security features to secure every payment received or sent. You can integrate an automatic payment system into your rental business software.
It will help your customers make payments on the go and reduce manual work. You will save a lot of money by automating the payment options because you don’t have to hire someone to track all the payments. Besides this, the automatic payment system also makes it easy to keep track of finances.
6. Make Use Of Structured Customer Data
Being in the business, you may have witnessed that repeat customers are essential for your rental business’s success. So the prime factor which decides the profitability of your equipment rental business is the strong relationship with your clients. But there is a twist; even if you provide good service and most of your clients are happy with your services, it also requires continuous efforts to engage your clients for future inquiries.
The simple reason is that most clients don’t stay loyal to a particular business, so you have to gather all the customer data and understand the data’s accumulation, processing, and structuring to get different statistics.
These customer metrics help you upgrade your service as per the customers’ demand. Besides this, advanced equipment booking software sends emails, text messages, and timely reminders about new equipment arrival offers and discounts to keep customers engaged. This way, the structured data not only help you keep your present customers connected to your services but also get referrals that bring profit.
The profitability of the equipment rental business is directly related to continuous up-gradation in service, integration of technology into the business, knowing the customer demand, minimizing the workload, decreasing the risk of equipment theft, proper equipment maintenance, advanced invoicing, clear terms, and conditions, easy access to customer data and so many more. So if you want to make your equipment rental business profitable, you must change and adopt many things that matter to your business.
Our online booking and rental software can help you easily manage your bookings. Use a rental calendar, get payments online, organize deliveries, send personalized emails, and market your rental business on a mobile-optimized website hosted in the cloud. A free rental website comes along with Reservety.