Driven by the COVID-19 pandemics, which upended every aspect of our life, 2020 was a challenging year for most small business owners. And like most small businesses, the rental industry took a significant hit. However, being a very tenuous and resilient industry, it weathered the pandemics. As a result, the rental companies are now ready to start kicking again.
As the economy gradually roars back, campers, party-goers, and travelers are also gearing to get back on to it. If current statistics hold, the rental industry will be among the most lucrative industries to earn passive income.
If you're planning to start a rental business, this article will guide you on how to go about it, and it'll discuss the nine best rental businesses you can leverage to earn a reasonable income.
7 Steps Toward Starting a Rental Business
Running a successful rental business requires strategic planning, commitment, dedication, and hard work. The following seven steps increase your chances of success.
Develop a Practical Rental Business Idea
Every successful business has started with a practical idea. The same is true for rental businesses. The best rental business ideas will quickly earn you a loyal customer base, which is vital for a profitable rental business.
An essential aspect of this step is choosing the appropriate rental niche. Personal interests or trends will likely influence your choice. Either way, whether you're going for the simple rental niches like book rental, clothing rental, or dumpster rental or more demanding niches like construction equipment rental, tool rental, heavy equipment rentals, house rental, etc., the vital thing is that your idea is practical, executable and has profit potential.
Carry Out Market Research
Once you've worked out a practical idea, you carry out market research. Market research is vital for a solid business foundation. It gives your new business a competitive edge that enables it to thrive even in a new market. Good market research will reveal:
- Your potential customers and pain points that drive their decisions.
- Prices your target audience is willing to pay.
- Your competitors
- What's trendy in your chosen niche.
Prepare a Rental Business Plan
After carrying out market research, you need to work out a business plan. Your business plan aims to define your type of business, starting with a company description and ending with an executive summary. It shows financial projections like expected startup cost, revenues, profit margins, etc. Additionally, it details expansion strategy, ad strategy, rental unit pricing, and management techniques.
Create a Robust Rental App or Software System
Now you've got a business name and financial projections. So your small business idea is beginning to shape up. First and foremost, having a robust rental app or software system is a must. A great rental app or software system reduces operational complexity. It streamlines daily workflow because rental businesses encompass various aspects like order preparation, customer service, employee management, accounting, and more.
You can look for a basic software system or rental apps that incorporate order management, inventory management, invoice generation, payment acceptance, and online booking. Setting up a robust rental app or software system to automate your rental business will enhance the smooth running of your business.
Order Your Inventories
It's usually advisable to start with the resources you already have. Especially for niches like book rental, clothing rental, furniture rental, and property rental (house rental). The idea is to gauge customers' interest and confirm that you're on the right track. It also minimizes risk allowing you to solidify your foundation before diversification.
Subsequently, you can order more inventories as the demand starts coming and you've got to know your customers better. This approach enables you to run your business without stress or hassles.
Promote Your Rental Business Online
Having a good online presence will enable you to reach your target customers faster. You can leverage social media platforms like Facebook, Instagram, LinkedIn, etc., to promote your rental business. It also provides an avenue for you to provide continuous support. Additionally, you need to create a website where people can check out your service and maybe book online.
Take Steps to Ensure Proper Functionality and Protection of Your Inventories
Your inventories are the pillar of your business and must be protected. Remember that you will not keep customers when you don't have functional products to offer them.
You need to take practical steps to ensure that your inventories function properly at all times. Take time to do proper maintenance, fix broken equipment, and ensure to replace spoiled or damaged equipment that cannot be fixed.
9 Rental Business Ideas
There are a lot of rental niches you can leverage and reap benefits from. Here, we detail nine niches that are good starting points.
Party and Wedding Equipment Rental Business
2020 was a year of canceled birthday parties, office parties, weddings, graduations, and more. With the COVID-19 restriction over people are gearing up to resume social gathering in a big way. For most of these events, many celebrants will consider leasing or renting the party equipment more economical. The reason is that most of the parties happen once in a while, except, of course, you're an A-list celebrity.
From bounce houses for children's parties, dunk tanks for fundraisers, and styled tents for weddings, the cost of equipment can make startup costs high. However, the long-term profit compensates for the initial investment cost. Profitability is also influenced by location. For instance, regarding wedding tents, the average cost of a 30 by 60 wedding tent is $580. In a wealthy neighborhood, you can charge double that price. So you stand to reap unlimited profits if you can make the financial commitment.
A great way to increase your profit potential is by including other necessities for an outdoor event, from caterers/bartenders to portable toilets. Of course, this is in addition to ensuring you have all the necessary party supplies.
Camping Equipment and Tent Rental Business
Camping is a fun and exhilarating way of escaping the hustle and bustle of modern life and connecting back to nature. With the pandemic almost over, campers have an excellent enthusiasm to get back to doing what they love.
You can leverage the fact that most campers do not have all the requisite equipment needed for a memorable camping experience. The essential pieces of camping equipment you need to have in your inventory to get started are backpacking and camping tents, sleeping gears, warm blankets, camping stoves, to name a few. You can further bolster your profit by incorporating hunting equipment rentals. If you have a truck, you can deliver on order and charge separately for it.
Vehicle Rental Business
Vehicle rental business is a broad aspect encompassing:
- Car Rental (Usual & Luxury)
- Bicycle Rental
- Boat Rental/Jet Ski/ATV Rental
- Commute Bus Rental/Party Bus Rental
- Electric Scooters/e-Bike Rental
- RV Rental/Boat House Rental
- Truck Rental
- Private Jet/Helicopter Rental.
Car rental: This is the most popular and cost-effective vehicle rental business idea to kickstart. You can quickly get started with just one car and grow from there. You can reap unlimited profits, especially if you're located in the sprawling cities of New York, San Francisco, Austin, and other tech hubs. Additionally, new factory hubs like Arizona are also ideal for the car rental business. People in these locations are willing to rent a car for a duration ranging from a couple of days to a month. According to Glassdoor, you can earn $29,841 per annum on average, depending on your location and commitment.
Bicycle Rental: Bike rental is a great business idea considering the number of cycling lovers waiting to resume cycling. You can quickly kickstart the business if you're located in the bike-friendly states of California, Washington, to name a few. You can quickly kickstart the business. Only a couple of bikes are enough to get you started. Once you can build a strong customer, you can reap great benefits.
RV rental, boat rental, truck rental, and e-scooters rental also have great potential. Luxury car rental and private jet/helicopter rental have huge potential as well, but the startup cost may be more than most people can afford.
Property or House Rental Business
Although startup costs are high, the house rental business is nevertheless the most lucrative rental business when adequately managed. The rental property encompasses office space rental, event center rental, conference room rental, holiday apartment rentals, land rentals, vacation property, and other aspects of real estate. All these are linked to industries poised to witness a post-COVID-19 boom, ranging from tourism to vacation.
For instance, people have started returning to the office. Once traveling fully resumes, the vacation industry will start booming, boosting holiday apartment rentals. You can leverage the Airbnb model to connect easily with customers unless you have a better plan. You can earn between $800 to $1000 per month, depending on location. Before kickstarting your property rental business, inquire about state property law.
Storage Rental Business
Storage rental business involves providing static or mobile storage units where people can store their belongings. The demand for storage space is on the rise as more people seek a secure place to store their possessions, especially when moving. In addition, lifestyle transition, travel, retirement, or marriage are other factors triggering this demand. Therefore, a self-storage rental business is a great rental business idea, especially considering it's inexpensive and easy to set up.
The average cost for setting up a storage unit ranges from $2.75 to $3.25 per gross square foot of the facility. This way, the rental business owner can make as much as $3,000 per month, depending on the unit area and business location.
Recreational Equipment Rental Business
Recreational activities are necessary means of decompressing and relaxing after work. That's why a recreational equipment rental business is also a great small business idea, especially as work resumes. You can provide equipment for hiking, skydiving, horse-riding, rafting, skiing, kayaking, and so on.
Furniture Rental Business
There are always house owners or offices that need temporary furniture solutions. Therefore, you can help provide value for such people with the furniture rental business and earn a reasonable income. To improve profitability, you should target furniture that can be used for a certain period only. For instance, parents will prefer to rent furniture for their babies since they no longer have to use it again once their baby grows. The furniture rental business is a great niche and requires little startup capital.
Tech Rental Business
Modern technologies are fundamental to the successful running of a business. Almost all businesses today rely on the use of technology gadgets to run smoothly. Conversely, small business owners may find it difficult to purchase all the gadgets needed to run their businesses and may seek to rent those gadgets pending when they can get their own.
Starting a tech rental business is an ideal solution to this problem. You can rent out gadgets like computers, mobiles, tablets, servers, accessories, etc. With quality service, you will retain your customers and ensure they always come back when they need your service again. What's more, you can incorporate office equipment rental services to increase your profit potential.
Tools and Construction Equipment Rental Business
The construction equipment market is projected to reach $145.22 billion by 2026. The reason is due to the growing need among firms to reduce organizational complexity and cost. Equipment that can be rented ranges from heavy equipment like bulldozers, cranes, or backhoes to light equipment like a lawnmower, forklift, or pressure washer.
Post pandemic economic recovery will see a spike in construction activities, especially as the US Congress is poised to pass an infrastructural bill. This means heavy equipment will be high in demand. The startup cost is very high, and so is the profit margin.
Stay on Top of Your Business Finances With Skynova
Trying to manage your finances while handling other aspects of your rental business can be overwhelming. However, the good news is you don't have to do that. With Skynova's accounting software, you can stay on top of your business.
Our software helps you keep track of your business finances, generate business transaction statements as well as invoices. You can then focus on other aspects of your rental business.
Notice to the Reader
The content in this article details the rental business opportunities you can leverage to earn good money. It may not be ideal in your specific situation, so always seek expert opinion.