If you are looking for a business that doesn’t require much stress or perhaps extensive period of training, then you should consider starting an equipment leasing business.
The truth is that this is one of the businesses that you can comfortably combine with another business and still have time to effectively manage both. There are loads of technicians and artisans who don’t have the required capital to acquire all the equipment needed to run their business but can afford to rent such equipment if they can find a place to rent from.
Much more than technicians and artisans, some organizations also rent equipment to carry out a project or job because it is cost effective for them to rent as against purchasing such equipment.
Ideally, people prefer to rent equipment to do a one – off job . So your responsibility is to look for such equipment and ensure that you have them in your store. So if you have decided to start an equipment leasing business, then you should ensure that you carry out feasibility studies and also market survey.
Business plan is yet another very important business document that you should not take for granted in the bid to launching your own business. Below is a sample equipment leasing business plan template that can help you to successfully write your own with little or no difficulty.
A Sample Equipment Leasing Business Plan Template
1. Industry Overview
Equipment leasing business is part of the Industrial Equipment Rental & Leasing industry and this industry is made up of businesses that engage in general industrial equipment rental, light construction equipment rental, medical equipment rental, audiovisual equipment rental, industrial energy equipment and pumps rental, theatrical and motion picture rental amongst others.
In general, the Industrial Equipment Rental and Leasing industry offers a range of products, including industrial machinery, some construction equipment, entertainment products and medical devices, for fixed-term use. The variety of products rented or leased mitigates the impact of increasing demand.
Going forward, the industry will continue benefiting from contractors resuming their prominence as the industry’s largest consumer group. This will be supported by steady growth in the number of construction projects in both residential and nonresidential markets.
The Industrial Equipment Rental and Leasing Industry is indeed a large and vibrant industry not only in the united states of America and but also in most countries of the world. Statistics has it that the Industrial Equipment Rental and Leasing industry in the United States of America is worth about $37 billion, with an estimated growth rate of 7.2 percent between 2012 and 2017.
There are about 9,271 registered and licensed industrial equipment rental and leasing businesses in the United States and they are responsible for employing about 109,710 people. In the United States, it is only United Rentals Inc. that can boast of having the lion market share in the industry, so the industry is still very much open to investors who would want to launch their own equipment leasing business.
A recent report published by IBISWorld shows that over the past five years, the Industrial Equipment Rental & Leasing in the US industry has grown by 7.2 percent to reach revenue of $37bn in 2017. In the same timeframe, the number of businesses has grown by 3.0 percent and the number of employees has grown by 4.6 percent.
The Industrial Equipment Rental and Leasing industry is in the mature phase of its life cycle as indicated by its growth rate over the 10 years to 2022 and the widespread but growing acceptance of its services in downstream markets. This trend is not true globally, however, as the maturity of the Tool and Equipment Rental industry varies considerably depending on the country’s equipment sales performance.
Industry value added (IVA) is forecast to grow at an annualized rate of 2.4 percent over the 10 years to 2022, relatively in line with the projected growth of US GDP, which is set to rise at an annualized rate of 2.0 percent during the same period. IVA is a function of wages, depreciation and profit margins.
Lastly, it is a fact that the industrial equipment leasing and rental industry is indeed a profitable industry to venture into and the entry bar for starting the business is not too difficult to scale through.
The truth is that if an equipment leasing business is stocked with a wide array of equipment and also well positioned in an environment with the right demography, they will sure attract regular clients and their equipment will be hired on a regular basis.
2. Executive Summary
Drucker Philemon® Equipment Leasing Company, LLC is a licensed industrial equipment leasing and rental company that will be based in Hartford – Connecticut. We have been able to secure a corner piece property in a centralized and busy industrial location in the heart of the city; a location with robust industrial activities and the right demography for the kind of business we want to run.
We are a standard industrial equipment leasing and rental company that will be involved in leasing and renting equipment such as, mower, hand drillers, heavy duty drillers, welding machines, forklifts, light construction equipment, medical equipment, audiovisual equipment, industrial energy equipment and pumps and theatrical and motion picture equipment, power saw, filling machine, scaffoldings and virtually any equipment that is needed to get any task done.
Drucker Philemon® Equipment Leasing Company, LLC is a client-focused and result driven industrial equipment leasing and rental outfit that provides reliable industrial equipment and tools at an affordable fee that won’t in any way put a hole in the pocket of our clients. We will ensure that we will surpass our clients’ expectations whenever they rent tools and equipment from us.
Drucker Philemon® Equipment Leasing Company, LLC will at all times demonstrate her commitment to sustainability, both individually and as a firm, by actively participating in our communities and integrating sustainable business practices wherever possible.
We will ensure that we hold ourselves accountable to the highest standards by meeting our client’s needs precisely and completely.
Our plan is to position Drucker Philemon® Equipment Leasing Company, LLC to become the leading brand in the industrial equipment leasing and rental industry in the whole of Connecticut, and also to be amongst the top 10 industrial equipment leasing and rental outfits in the United States of America within the first 10 years of operation.
This might look too tall a dream but we are optimistic that this will surely come to pass because we have done our research and feasibility studies and we are confident that Hartford – Connecticut is the right place to launch our industrial equipment leasing and rental business.
Drucker Philemon® Equipment Leasing Company, LLC is family business that is owned by Mr. Drucker Philemon and her immediate family members.
The organization will be managed by Mr. Drucker Philemon who has over 17 years’ hands on experience working at various capacities within the equipment leasing and rental industry in the United States. Drucker Philemon has a Diploma in Mechanical Engineering from the University of Connecticut.
3. Our Products and Services
Drucker Philemon® Equipment Leasing Company, LLC is going to offer varieties of services within the scope of the industrial equipment leasing and rental industry in the United States of America.
Our intention of starting our industrial equipment leasing and rental company is to make profits from the industry and we will do all that is permitted by the law in the US to achieve our aim and ambition. Our business offerings are listed below;
- General industrial equipment rental
- Light construction equipment rental
- Medical equipment rental
- Audiovisual equipment rental
- Industrial energy equipment and pumps rental
- Theatrical and motion picture rental
- Retail sales, product delivery and repair
- Rental of other products
- Rental of contractors’ and builders’ tools and equipment
4. Our Mission and Vision Statement
- Our vision is to build an industrial equipment leasing and rental business that will become the number one choice for both individual and corporate clients in the whole of Hartford – Connecticut. We want to be known as the go to company when it comes to industrial equipment leasing and rental.
- Our mission as an industrial equipment leasing and rental company is to service a wide range of clientele. We are going to position the business to become the leading brand in the industry in the whole of Hartford – Connecticut, and also to be amongst the top 10 equipment leasing and rental companies in the United States of America within the first 10 years of fully launching the business.
Our Business Structure
Drucker Philemon® Equipment Leasing Company, LLC is an industrial equipment leasing and rental company that intends to start small in Hartford – Connecticut, but looks to grow big in order to compete favorably with leading industrial equipment leasing and rental companies.
We are aware of the importance of building a solid business structure that can support the picture of the kind of world class equipment leasing and rental business we want to own. This is why we are committed to only hiring the best hands within our area of operations.
At Drucker Philemon® Equipment Leasing Company, LLC, we will ensure that we hire people that are qualified, hardworking, creative, customer centric and are ready to work to help us build a prosperous business that will benefit all the stakeholders.
As a matter of fact, profit-sharing arrangement will be made available to all our senior management staff and it will be based on their performance for a period of five years or more as agreed by the board of trustees of the company. In view of the above, we have decided to hire qualified and competent hands to occupy the following positions in our organization;
- Chief Executive Officer (Owner)
- Equipment Rental Manager
- Admin and HR Manager
- Marketing and Sales Executive
- Accountant
- Customer Services Executive
- Truck Driver
5. Job Roles and Responsibilities
Chief Executive Office:
- Increases management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results
- Responsible for fixing prices and signing business deals
- Responsible for providing direction for the business
- Creates, communicates, and implements the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
- Responsible for signing checks and documents on behalf of the company
- Evaluates the success of the organization
Equipment Rental Manager
- Manages the rental of equipment in our organisation
- Achieves maximum profitability and over-all success by controlling costs and quality of equipment and service.
- Schedules staff as necessary to ensure adequate and consistent levels of service
- Responsible for industrial equipment leasing and rental control policies and completion of necessary forms.
- Follows proper purchasing and requisitioning procedures.
Admin and HR Manager
- Responsible for overseeing the smooth running of HR and administrative tasks for the organization
- Maintains office supplies by checking stocks; placing and expediting orders; evaluating new products.
- Defines job positions for recruitment and managing interviewing process
- Carries out staff induction for new team members
- Responsible for training, evaluation and assessment of employees
- Responsible for arranging travel, meetings and appointments
- Oversees the smooth running of the daily office activities.
Marketing and Sales Executive
- Identifies, prioritizes, and reaches out to new partners, and business opportunities et al
- Identifies development opportunities; follows up on development leads and contacts
- Writes winning proposal documents, negotiate fees and rates in line with company policy
- Responsible for handling business research, marker surveys and feasibility studies
- Documents all customer contact and information
- Represents the company in strategic meetings
- Helps to increase sales and growth for the company
Accountant
- Responsible for preparing financial reports, budgets, and financial statements for the organization
- Provides managements with financial analyses, development budgets, and accounting reports
- Responsible for financial forecasting and risks analysis.
- Performs cash management, general ledger accounting, and financial reporting for one or more properties.
- Responsible for developing and managing financial systems and policies
- Responsible for administering payrolls
- Ensures compliance with taxation legislation
- Handles all financial transactions for the company
- Serves as internal auditor for the company
Client Service Executive
- Welcomes guests and clients by greeting them in person or on the telephone; answering or directing inquiries.
- Ensures that all contacts with clients (e-mail, walk-In center, SMS or phone) provides the client with a personalized customer service experience of the highest level
- Through interaction with clients on the phone, uses every opportunity to build client’s interest in the company’s products and services
- Manages administrative duties assigned by the manager in an effective and timely manner
- Consistently stays abreast of any new information on the company’s products, promotional campaigns etc. to ensure accurate and helpful information is supplied to clients when they make enquiries
Truck Driver
- Responsible for transporting heavy duty equipment to project sites of clients as agreed by the company
- Runs errand for the organization
- Handles any other duty as assigned by the equipment rental manager.
6. SWOT Analysis
Because of our drive for excellence, we were able to engage some of the finest business consultants in Hartford – Connecticut to look through our business concept and together we were able to examine the prospect of the business and to access ourselves to be sure we have what it takes to run the business.
In view of that, we were able to take stock of our strengths, our weakness, our opportunities and also the threats that we are likely going to be exposed to in Hartford – Connecticut. Here is a of what we got from the SWOT Analysis that was conducted for Drucker Philemon® Equipment Leasing Company, LLC;
- Strength:
Notwithstanding the fact that all our industrial equipment and tools are of world – class standard and our business is well positioned and equipped, we have a team that are trained and equipped to pay attention to details as regard assembling, servicing and maintaining industrial equipment. We are well positioned and we know we will attract loads of clients from the first day we open our doors for business.
- Weakness:
As a new industrial equipment leasing and rental company, it might take some time for our organization to break into the market and gain acceptance in the already saturated industrial equipment leasing and rental industry especially from corporate clients; that is perhaps our major weakness.
Opportunities:
The opportunities in the industrial equipment leasing and rental industry is massive considering the number of individuals and businesses that for obvious reasons would prefer renting or leasing equipment as against purchasing. As a standard equipment leasing and rental company, we are ready to take advantage of any opportunity that comes our way.
- Threat:
Some of the threats that we may likely face as an industrial equipment leasing and rental company operating in the United States are unfavorable government policies, the arrival of a competitor within our location of operation and of course a sharp drop in the prices of the industrial equipment that we put out for leasing.
7. MARKET ANALYSIS
- Market Trends
The trends in the industrial equipment leasing and rental industry shows that interest rates are an important demand determinant, as loans, mortgages and bonds finance most developments and renovations. Low interest rates encourage new construction and economic activity because the cost of financing expansion drops, which ultimately raises demand for rented equipment.
Although some companies may buy more and rent less if rates are low, given the inexpensive credit, a low rate’s positive effect on demand in the economy is substantial and helps the industry. The yield on the 10-year Treasury note is expected to rise in 2017, presenting a potential threat to the industry.
As a matter of fact, investment in the private construction of educational, commercial and other facilities directly influences demand for commercial and industrial equipment rental. When the number of facilities being constructed or renovated is on the rise, general contractors need more equipment for fixed-time use.
This boosts industry revenue derived from renting equipment for carpentry, carpet cleaning, scaffolding, floor waxing and sanding to general contractors. The value of private nonresidential construction is expected to increase in 2017, presenting a potential opportunity for the industry.
The fact remains that the industrial equipment leasing and rental industry is in a continuous state of evolution and as such, ground breaking strategies and ideas that are once highly successful are no longer as productive as they were in time past.
Close observation of the trend in the industry reveals that the past few years have seen the rise and proliferation of new tech tools. The trends also extend to increased attention paid to engagement and new market segments, adopting eco-friendly measures and sustainability when making use of equipment and tool, and of course increase in demands from contractors.
Lastly, aside from excellent customer services, equipment leasing and rental companies ensure that they have some of the best and latest equipment and tools they can get even if it means importing them or customizing them.
8. Our Target Market
Even though Drucker Philemon® Equipment Leasing Company, LLC will initially serve small to medium sized business, but that does not in any way stop us from growing to be able to compete with leading industrial equipment leasing and rental companies in the United States.
As an all – round industrial equipment leasing and rental company, Drucker Philemon® Equipment Leasing Company, LLC offers a wide range of services hence we are equipped to service a wide range of clientele base. Our target market cuts across players in different industries.
Below are some of our target customers;
- Building and construction contractors
- Film producers/makers
- Industrial cleaning companies
- Engineering companies
- Servicing and maintenance companies
Our competitive advantage
We know that to be highly competitive in the industrial equipment leasing and rental industry means that your equipment must be of high standard and your business must be well – positioned and you should be able to deliver consistent quality service.
Drucker Philemon® Equipment Leasing Company, LLC might be a new entrant into the industry in the United States of America, but the management staff of the business are highly qualified to run such business.
Other competitive advantages that we are bringing to the market are our ability to quickly adopt new technology, economies of scale and the fact that all our tools and equipment are of world – class standard and the business is well positioned to meet the 21st century demand. These are part of what will count as a competitive advantage for us.
Lastly, our employees will be well taken care of, and their welfare package will be amongst the best within our category in the industry meaning that they will be more than willing to build the business with us and help deliver our set goals.
9. SALES AND MARKETING STRATEGY
We are mindful of the fact that there is stiff competition amongst industrial equipment leasing and rental companies in the United States of America; hence we have been able to hire some of the best business developers to handle our sales and marketing concerns.
Our sales and marketing team will be recruited based on their vast experience in the industrial equipment leasing and rental industry and they will be trained on a regular basis so as to be well equipped to meet their targets and the overall goal of the organization.
We will also ensure that our excellent job deliveries speak for us in the market place; we want to build a standard business that will leverage on word of mouth advertisement from satisfied clients.
Our goal is to grow our industrial equipment leasing and rental company to become one of the top 10 rental companies in the United States of America which is why we have mapped out strategies that will help us take advantage of the available market and grow to become a major force to reckon with in Hartford – Connecticut.
Drucker Philemon® Equipment Leasing Company, LLC is set to make use of the following marketing and sales strategies to attract clients;
- Introduce our business by sending introductory letters alongside our brochure to contractors, engineers, film makers, industries, plumbers, households and key stake holders in Hartford and other cities in Connecticut
- Advertise our business in relevant related magazines, newspapers, TV and radio stations.
- List our business on yellow pages’ ads (local directories)
- Attend relevant international and local expos, seminars, and business fairs et al
- Create different packages for different category of clients in order to work with their budgets and still deliver quality equipment and services to them
- Leverage on the internet to promote our business
- Engage direct marketing approach
- Encourage word of mouth marketing from loyal and satisfied clients
- Join local chambers of commerce and industry with the aim of marketing our business
- Make use of attractive hand bills to create awareness and also to give direction to our facility
- Adopt direct mailing coupon marketing approach
- Position our signage / flexi banners at strategic places in and around Hartford – Connecticut
- Create a loyalty plan that will enable us reward our consistent clients especially those that refer clients to us.
- Engage in roadshows within our neighborhood to create awareness for our industrial equipment leasing and rental business.
Sources of Income
Drucker Philemon® Equipment Leasing Company, LLC is established with the aim of maximizing profits in the industrial equipment leasing and rental industry and we are going to go all the way to ensure that we do all it takes to attract clients on a regular basis.
Drucker Philemon® Equipment Leasing Company, LLC will generate income by offering the following equipment and tools rental services for individual clients and for corporate organizations;
- General industrial equipment rental
- Light construction equipment rental
- Medical equipment rental
- Audiovisual equipment rental
- Industrial energy equipment and pumps rental
- Theatrical and motion picture rental
- Retail sales, product delivery and repair
- Rental of other products
- Rental of contractors’ and builders’ tools and equipment
10. Sales Forecast
One thing is certain, there would always be need to carry out some jobs that require the rental of industrial equipment and power tools in the United States of America and as such the services of industrial equipment leasing and rental companies will always be needed. This, we have at the back of our minds always.
We are well positioned to take on the available market in Hartford – Connecticut and we are quite optimistic that we will meet our set target from the first six months of operation.
We have been able to examine the industrial equipment leasing and rental market, we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. The sales projections are based on information gathered on the field and some assumptions that are peculiar to startups in Hartford – Connecticut.
Below are the sales projection for Drucker Philemon® Equipment Leasing Company, LLC, it is based on the location of our business and the wide range of tools, plants and industrial equipment that we will be offering;
- First Fiscal Year: $250,000
- Second Fiscal Year: $650,000
- Third Fiscal Year: $970,000
N.B: This projection was done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and natural disasters within the period stated above. There won’t be any major competitor offering same additional services as we do within same location.
11. Publicity and Advertising Strategy
We have been able to work with our brand and publicity consultants to help us map out publicity and advertising strategies that will help us walk our way into the heart of our target market. We are set to take the industrial equipment leasing and rental industry by storm which is why we have made provisions for effective publicity and advertisement of our industrial equipment leasing and rental company.
Below are the platforms we intend to leverage on to promote and advertise Drucker Philemon® Equipment Leasing Company, LLC;
- Place adverts on both print (community based newspapers and magazines) and electronic media platforms
- Sponsor relevant community based events / programs
- Leverage on the internet and social media platforms like; Instagram, Facebook, twitter, YouTube, Google + et al to promote our brand
- Install our billboards in strategic locations all around Hartford – Connecticut
- Engage in roadshows from time to time in target neighborhoods to create awareness of our business
- Distribute our fliers and handbills in target areas
- Ensure that all our workers wear our branded shirts and all our vehicles and trucks are branded with our company’s logo et al.
12. Our Pricing Strategy
Just like in rental and consulting business, hourly billing for rental services is also a long – time tradition in the industry. However, for some types of rental services, flat fees make more sense because they allow clients to better predict the overall service charges.
As a result of this, Drucker Philemon® Equipment Leasing Company, LLC will charge our clients both flat fee and hourly billing as long as it favors both parties. At Drucker Philemon® Equipment Leasing Company, LLC we will keep our fees below the average market rate for all of our clients by keeping our overhead low and by collecting payment in advance.
We are aware that there are some clients especially contractors that would need to rent tools and equipment on a regular basis, we will offer flat rate for such services that will be tailored to take care of such clients’ needs.
- Payment Options
The payment policy adopted by Drucker Philemon® Equipment Leasing Company, LLC is all inclusive because we are quite aware that different customers prefer different payment options as it suits them but at the same time, we will ensure that we abide by the financial rules and regulation of the United States of America.
Here are the payment options that Drucker Philemon® Equipment Leasing Company, LLC will make available to her clients;
- Payment via bank transfer
- Payment with cash
- Payment via credit cards
- Payment via online bank transfer
- Payment via check
In view of the above, we have chosen banking platforms that will enable our client make payment for rentals or our equipment and tools without any stress on their part. Our bank account numbers will be made available on our website and promotional materials
13. Startup Expenditure (Budget)
From our market survey and feasibility studies, we have been able to come up with a detailed budget on achieving our aim of establishing a standard and one stop industrial equipment leasing and rental company in Hartford – Connecticut and here are the key areas where we will spend our start – up capital;
- The total fee for incorporating the Business in the United States of America- $750.
- The budget for basic insurance policy covers, permits and business license – $2,500
- The amount needed to acquire a suitable facility that will accommodate our heavy duty plants, tools and equipment, trucks and small office facility (Re – Construction of the facility inclusive) – $150,000.
- The cost for equipping the office (computers, software applications, printers, fax machines, furniture, telephones, filing cabins, safety gadgets and electronics et al) – $ 5,000
- The cost of launching an official website – $600
- The cost for the purchase of standard industrial equipment and tools – $100,000
- The cost for the purchase of a truck – $10,000
- Budget for paying at least 4 employees for 2 months plus utility bills – $70,000
- Additional Expenditure (Business cards, Signage, Adverts and Promotions et al) – $2,500
- Miscellaneous: $5,000
Going by the report from the market research and feasibility studies conducted, we will need about four hundred and fifty thousand (450,000) U.S. dollars to successfully set up a medium scale but standard industrial equipment leasing and rental business firm in the United States of America.
Generating Startup Capital for Drucker Philemon® Equipment Leasing Company
Drucker Philemon® Equipment Leasing Company, LLC is a family business that will be owned by Mr. Drucker Philemon and his immediate family members. They are the only financier of the business, which is why they decided to restrict the sourcing of the startup capital for the business to just three major sources.
- Generate part of the startup capital from personal savings
- Source for soft loans from family members and friends
- Apply for loan from the bank
N.B: We have been able to generate about $150,000 (Personal savings $100,000 and soft loan from family members $50,000) and we are at the final stages of obtaining a loan facility of $300,000 from our bank. All the papers and documents have been duly signed and submitted, the loan has been approved and any moment from now our account will be credited.
14. Sustainability and Expansion Strategy
The future of a business lies in the number of loyal customers that they have, the capacity and competence of their employees, their investment strategy and the business structure. If all of these factors are missing from a business, then it won’t be too long before the business close shop.
One of our major goals of starting Drucker Philemon® Equipment Leasing Company, LLC is to build a business that will survive off its own cash flow without the need for injecting finance from external sources once the business is officially running.
We know that one of the ways of gaining approval and winning customers over is to rental out our power tools and industrial equipment a little bit lower than what is obtainable in the market and we are prepared to survive on lower profit margin for a while.
Drucker Philemon® Equipment Leasing Company, LLC will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our company’s corporate culture is designed to drive our business to greater heights and training and retraining of our workforce is at the top burner.
We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.
Check List/Milestone
- Business Name Availability Check: Completed
- Business Incorporation: Completed
- Opening of Corporate Bank Accounts: Completed
- Opening Online Payment Platforms: Completed
- Application and Obtaining Tax Payer’s ID: In Progress
- Application for business license and permit: Completed
- Purchase of Insurance for the Business: Completed
- Securing a standard warehouse facility and reconstruction inclusive: In Progress
- Conducting Feasibility Studies: Completed
- Generating part of the startup capital from the founder: Completed
- Applications for Loan from our Bankers: In Progress
- Writing of Business Plan: Completed
- Drafting of Employee’s Handbook: Completed
- Drafting of Contract Documents: In Progress
- Design of The Company’s Logo: Completed
- Printing of Promotional Materials: Completed
- Recruitment of employees: In Progress
- Purchase of the needed furniture, office equipment, electronic appliances and facility facelift: In progress
- Purchase of various sizes of standard power tools and industrial equipment: Completed
- Purchase of trucks and vans: Completed
- Creating Official Website for the Company: In Progress
- Creating Awareness for the business (Business PR): In Progress
- Health and Safety and Fire Safety Arrangement: In Progress
- Establishing business relationship with vendors and key players in the industry: In Progress