The excavator rental industry is growing, and if you’re looking for a lucrative business opportunity, this might be it. After all, tool and equipment rentals account for roughly $2 billion in annual revenue in the United States, accounting for the majority of rental business income. Here’s how to turn those equipment rental trends into a profitable business.

Is there a surge in construction in your area, or an unusually large number of renters getting into the flipping business? If this is the case, there is most likely a growing market for excavator rentals in your area. To fill that market, you must first understand what your potential customers want. This allows you to decide what kind of equipment customers want to rent, how much you’ll charge for it, and how much business you can expect. Make contact with local home renovators, builders, and construction companies. Inquire about the equipment they most frequently use, the brands they prefer, the price ranges they typically accept, and the types of projects they typically take on.

At first, it’s all about quality, not quantity. Have the equipment that potential customers in your area will definitely want to rent – not the stuff you think they might need. Purchase your minimum viable inventory based on your conversations with those businesses. You don’t want to waste money on equipment that no one will ever rent, and it’s much easier to figure out what else you should buy in the long run than it is to try to make up for sunken costs from useless equipment. Make sure you’re getting the best deal possible when purchasing inventory. If the local businesses you spoke with didn’t seem to care, don’t waste your money on high-end brand names. Consider buying used equipment to help you save a lot of money.

According to 2007 census data, the average startup cost for an excavator rental company was $75,000 dollars. However, depending on where you live and the type of equipment you intend to rent out, this figure can vary greatly. If you avoid a heavy equipment venture in favor of focusing on smaller-scale tools, for example, it will cost you much less to stock your inventory, lowering your startup costs significantly.

Create a web presence that includes social media pages and a professional-looking website with all of the information a potential customer needs to contact you for a quote or to reserve a rental. Take out ads in the local paper as well, and stay in touch with the construction companies that answered your initial questions. They could be your first and even longest-term customers.

Paul Petersen