Don’t try to compete against the major national franchise tool rental companies, at least at the start. These operations require a major up-front investment in equipment, training, retail operations, franchise fee, and mass-market advertising. Instead, concentrate on renting out expensive and hard-to-find tools and equipment. Your business plan should be built on a high per-device fee for a low volume of daily or weekly rentals. Research the cost and life expectancy for specialized equipment before you make any purchases. Some tools have an almost unlimited life; other pieces of equipment are so specialized or unusual that they may become outmoded or unusable after a very short period of time. Your business plan should be based on a realistic estimate of the number of times a device can be rented while in your possession; the total yield plus any resale value has to produce a profit.
In most agreements, you are responsible for the maintenance of equipment and must bear the cost of any equipment that breaks in normal use. However, your rental agreement should spell out situations where the customer must pay for repair or replacement of the equipment because of negligence or misuse. The customer is also responsible for replacement if the equipment is lost or stolen. From that case, you’ll want insurance on your equipment; don’t expect to collect if a single power sander is stolen or if a wrench breaks, but you should be covered in case of a major loss of expensive equipment at your site or while rental items are in the possession of clients.