The construction industry has one of the most significant shares in the US economy. If you didn’t know, many experts consider the construction sector and its various sub-sectors one of the nation’s most profitable industries. The industry alone takes up 4% of the country’s overall GDP, accounting for more than a trillion dollars in revenue. However, it relies heavily on various sub-sectors to get most of its job done because of its enormous size.
One of the fastest-growing sub-sectors in the industry is the construction equipment rental market. It’s valued at $103 billion last year and is expected to grow by 5% in the coming years. So if you’re a budding entrepreneur and want to start a business in the construction industry, this is the best sub-sector to start. Here are the essential things you need to know before starting such a business.
Design Your Business
Every business must be designed uniquely for it to survive in the market. Consider your ideas and how they will revolutionize the industry. It doesn’t necessarily have to be ground-breaking. Maybe it’s an idea that started a couple of years ago but failed to take off the ground, so you’re trying it again this year. Your idea can be as simple as utilizing digital commerce to rent construction equipment much faster all over the nation. Any idea will work out as long as you implement it properly.
Before implementing your business design, it’s essential to do your research. Much like the statistics we’ve given you before, there are more statistics out there available for the construction equipment rental market. Look into the online statistics and ask yourself: how many people are renting construction equipment online? How many people search for such things online? Can this niche market sustain itself in the future?
Another thing you should think about is investors. You can’t build upon your business without investors, and your pitch needs to be outstanding. So consider these things before you implement your business design.
Heavy-duty equipment is going to be your lifeline once you’ve established yourself in the market. However, they are costly investments but well worth their price later down the line. With this being said, you should consider having some in your business once you’ve started.
There are many heavy-duty equipment choices out there in the market right now. One of the more versatile heavy-duty equipment that can be used for both big and small projects is man lifts. Man lifts are utilized for small-time projects such as painting and roadside repair and big construction projects. You might think that making man lift rental services in your company alongside other heavy-duty equipment rentals such as cranes and excavators will cost you too much money.
Still, such an investment will only make your equipment rental business grow even much faster. This equipment is a significant demand in the industry and can quickly pay for your company’s bills in the future. Additionally, their versatility should give you enough revenue to pay back this equipment in a span of three or so years. After then it’ll all just be profits going right into your pockets.
Add Maintenance Fees to Your Equipment
The main reason contractors don’t buy their construction equipment is the hefty price of maintenance. But your business will thrive from this.
When renting your equipment, you should include the price of maintenance alongside it. You can know this by getting the average of maintenance costs you have per equipment every year. Add that your rental fees, and you should be good to go. Again, it’s a relatively simple addition, and clients don’t necessarily need to know how you come up with your rental prices because it differs from every equipment rental company.
Lastly, you have to get insurance for each of your construction equipment, especially the heavy-duty ones. Remember that the construction industry is built by hard labor, and it’s fairly common to have equipment stuck in the mud or be flipped over due to some unknown reason. Although many types of construction equipment can survive these things, the damage done needs to be repaired. This is where insurance comes in.
Equipment that is insured will save you a lot of money in times you need it. Most of the time, in this industry, it’s better to have something and not need it than not to have it when you need it. If you can’t afford to insure all of your construction equipment, choose the most expensive ones.
An efficient construction business maintains its heavy-duty equipment and insurance. A good business design would be prioritizing your presence online since everything is online nowadays. Lastly, make sure you keep an eye out for your expenses and manage them properly. If you do these things fairly well, your business should grow in no time.