Starting A Plant & Tool Hire Business: The Basics

Wherever there is building going on – inside and out – there is a need for plant and tool hiring services. It means there is a lot of opportunity for entrepreneurs with love and deep knowledge of machinery to create a thriving business. However, before you get excited and rush out to buy a fleet of diggers, there are a few things you should know. Here’re the basics of starting a plant and tool hire business.

Raising the money

Plant and machinery can be incredibly expensive. It’s why building and construction firms prefer to rent it, rather than have these pricey items as capital. However, it also means there will always be people looking for reasonable rates. The trick is to invest what you can in machinery and specialist tools, and plough your profits into buying more. But where will you get the money from? Banks will expect you to have a source for buying equipment at a similar rate to your bigger competitors – and stump up 50% of the initial costs. Investors will not be interested unless your business plan is razor sharp – which we’re going to look at now.

Creating the perfect business plan

Your business plan should cover several issues if you want to attract investment and start on the front foot. Your figures have to be realistic, and you should also be able to identify your target market. You will need to speak to local construction firms, even at this research stage. And, it’s going to take a good deal of time to perfect your plan – but it will be worth it.

Building relationships

Your plant hire business will rely heavily on relationships – of two different kinds. There are your construction customers, of course, who you cannot afford to let down. Then there are your suppliers – for buying your equipment, and the services to fix it. When a customer suffers from broken or malfunctioning equipment, they need assurance it will be fixed as soon as possible. And much can go wrong. A digger’s hydraulics could fail, meaning you need to get a hose repair service out as soon as possible. Tyres can puncture and will need replacing by a specialist plant tyre company. And, of course, your equipment could just stop working with no explanation at all. Your customers will expect a replacement – and fast – otherwise they will find one with your competitor.

Establish your terms and conditions

Once you start finding customers, it is critical that they understand your terms and conditions. As we mentioned above, a lot can go wrong. Without everyone’s expectations being clear, there is a lot of room for potential disagreement. For example, a customer might give you a small deposit but then break the machine. Unless your T&Cs make it clear they will be held responsible, you could be left with very expensive repairs or replacements on your hands. Given the construction industry is often full of potential ‘cowboys,’ it is essential that you have a strong legal backing.

Robust insurance

Finally, don’t mess around trying to save a few pounds on insurance. Find the best policies you can that offer you the best protection possible. Accidents happen, and you may be liable – meaning significant expense in the event of a court case.