New hire business idea

[Shaun619]

Hi

I was wondering if I could get some feedback on a new business idea I have.

The idea is I would be renting out a mini digger to people for a fee.

The plan is I can lease a small JCB mini digger on a 3 year leace for 70 pounds per week. I would charge 50 pounds for a days use 80 pound for two days and 230 pounds for a weeks use. I would buy a trailer for about 1500 pounds and a cheap pickup to tow it for about 3000 pounds. Ive looked into insurance which I could get for about 500 pounds per year. I was thinking about charging a 300 pound deposit for anyone who hires it which I would pay back providing there is no damage.

I work a full time job so the idea is I would drop the digger off early morning or late at night (same with pickup)

Any feedback would be appreciated.

Thanks

 

[Scalloway]

How do you plan to get customers? Have you researched the market in your area?

 

[Graham Tyers]

I know many a traveller who'd love the idea. Digger, what digger?

Tool Hire is a well established business, so there's no doubt you can make it work - but there are things that you need to cover. It's not as straightforward as it might seem. The Hire Association Europe is a good place to start to find resources. http://www.hae.org.uk

Hire kit, as well as being stolen readily, is battered to death. There are huge costs you wouldn't expect in repairs, and trying to extract money for damages means you have to have a long turn-around time to check the thing very carefully and prepare it again before it's ready for hire again. You will also need to be on standby 7 days a week to recover it from site as it's off-hired. Leave it lying around for 24 hours and you'll never see it again.

You also have health and safety liability as the owner of the kit to make sure it's safe every time it's taken out, and that you've offered all the same safety information with it as the manufacturer would provide you - manuals, warning, etc.

 

[Mark T Jones]

As others have said, it is a well established concept. Have you looked at what the competition are charging?

In addition to the cautions above, I should say that the construction industry isn't famous for prompt payment (to put it mildly) - credit control would need to be high on your agenda!

 

[AllUpHere]

You also need to check that the lease company you're getting it from allow it to be rented out. Usually they don't.

 

[Mark T Jones]

You also need to check that the lease company you're getting it from allow it to be rented out. Usually they don't.

Technically true, but seldom a real issue its a condition that is frequently wAived

A bigger challenge for the op will be finding a company willing to lend to a start up with no sector experience and (currently) no business plan

 

[AllUpHere]

Technically true, but seldom a real issue its a condition that is frequently wAived

A bigger challenge for the op will be finding a company willing to lend to a start up with no sector experience and (currently) no business plan

I wouldn't want to be the OP taking the machine back at the end of the lease if the lease company haven't agreed to it being a 'hire' machine. You can tell a machine that's been out for hire from a mile away. Equally, I'm sure there are insurance implications if you lease it for your own use, and then rent it out.

I completely agree with your second paragraph.

 

[The Byre]

Those figures seem overly optimistic and just do not look right to me!

 

[Shaun619]

Hi

Thanks for all the feedback. I have to say although I have experience in dealing with customers being a head storeman in my full time job I am pretty low on knowledge when it comes to the legal aspects although I have worked hard on my research.

I would probably seek a parter to deal with more of the admin side while I deal with the transport of the machine. Its only an idea at the moment start off small work my way bigger. I want to be self employed one day as I am a hard worker early riser and to be honest as im sure a lot of you will know you can get sod all thanks from your employer.

 

[Mark T Jones]

I wouldn't want to be the OP taking the machine back at the end of the lease if the lease company haven't agreed to it being a 'hire' machine. You can tell a machine that's been out for hire from a mile away. Equally, I'm sure there are insurance implications if you lease it for your own use, and then rent it out.

I completely agree with your second paragraph.

For reasons far too boring to go in to, this type of lease on plant is fundamentally different to the car leasing you are probably thinking of. Most lenders are familiar and happy with sub hire

Yes, there are insurance implications and the op needs to be looking at cpa or hea to understand

 

[Mark T Jones]

Those figures seem overly optimistic and just do not look right to me!

To be fair I think these Are 'throw around' figures. If the op chooses to pursue hopefully there will be researched cashflows

 

[Paralabs]

Most likely you will have to abandon the idea, because customers will find pretty hard and the contract does not allow you to repeat rent.

 

[Chris Ashdown]

Have you thought of hiring out a mini digger plus a driver, who you hire per day freelance and who looks after your equipment and is trained

Don't forget liabilities when you break the main power to 10,000 homes through negligence or drop the bucket on somebody's toe

Maybe a job for the wife or girl friend which may make advertising either easier or very hard

 

[The Byre]

Hi

I was wondering if I could get some feedback on a new business idea I have.

The idea is I would be renting out a mini digger to people for a fee.

The plan is I can lease a small JCB mini digger on a 3 year leace for 70 pounds per week. I would charge 50 pounds for a days use 80 pound for two days and 230 pounds for a weeks use. I would buy a trailer for about 1500 pounds and a cheap pickup to tow it for about 3000 pounds. Ive looked into insurance which I could get for about 500 pounds per year. I was thinking about charging a 300 pound deposit for anyone who hires it which I would pay back providing there is no damage.

I work a full time job so the idea is I would drop the digger off early morning or late at night (same with pickup)

Any feedback would be appreciated.

Thanks

Found it!

I was leafing through some paperwork just now and found the formula that you need!

Your MINIMUM fee per day is -

[C/12D + (1.3 x C/1000) + M + I/12] /G

Where -

G - guaranteed number of days per month rental (usually five)
C - Total cost of hire object
D - depreciation period
M - Monthly running costs
I - Loan interest rate.