The benefits of equipment rental for construction companies
Regardless of their industry, businesses need every advantage they can get their hands on to remain competitive.
As everyone scrutinises balance sheets and all elements of a company's operations in search of competitive advantages, it can pay to investigate and compare the costs of renting or leasing equipment to the price of purchasing and owning the equipment.
Loaders, excavators, skid steers, trucks, lifts, generators, uninterruptible power supply, and other pieces of equipment are critical to the operation of any construction firm. However, as with any company, they may and must be streamlined to achieve optimum efficiency and versatility for the organisation.
A cost-benefit analysis can provide meaningful information that can be used to make an informed choice on whether to rent equipment or purchase it.
The cost of owning your machinery and equipment
Purchasing equipment and machinery as mentioned above can provide your company with beneficial assets. However, this inventory can tie up funds, especially if it is sat idle. Niche or infrequently used tools can drain finances if purchased, leading to inefficiencies across the company.
Factor in the upkeep, maintenance, training and safety equipment required and the financial implications are increased.
For this reason, more and more companies across vast and varied range industries are opting to rent the more expensive and heavy-duty appliances required to run their business.
For construction companies, renting what you need can initially feel like a drain on your monthly outgoings. This post looks at some of the benefits for construction companies to hire their equipment, tools or machinery.
The benefits of renting for construction companies
By renting equipment, you will be able to avoid the hassle of transporting apparatus to project locations.
Transportation can be lengthy, both the actual distance and organising the correct method routes, which can harm the productivity and efficiency of an entire operation.
More importantly, the time spent waiting for equipment might result in delays and halt the work that has already been accomplished on the job site. Using a rental company relieves you of this load and gives you a more reliable equipment alternative by storing parts on site.
Fewer storage requirements
To maintain equipment ownership, businesses must-have storage solutions to protect equipment when it is not in use.
Equipment that has not been correctly stored or that has been exposed to adverse weather conditions may deteriorate more quickly. In addition, warehouse or storage space is an additional expense for construction companies to consider.
If you can work out a deal with vendors or suppliers on the length of time you require a rental, your company will not have to worry about long-term storage costs. This saves you both the time to plan out the logistics and the money it would cost to store the items.
Apart from that, storage charges can be costly, particularly if you have a large fleet of machinery. Leasing, on the other hand, has the capability of alleviating these inconveniences.
Lower Initial Investment
Purchasing substantial pieces of machinery like excavators, tracked dozers, or telehandlers is a significant financial commitment that must be carefully considered and may take several "good years" (or a few years) to pay for.
Whenever you purchase a piece of capital equipment, your money is locked up in it until you sell it. If you utilise it properly and keep it for an extended period, offers may be lower than you would have preferred when the time comes to sell.
For example, when it comes to Loader Hire, because you are not tying up a significant sum of money in a piece of capital equipment, you have more finances available to seek opportunities and maintain other critical aspects of your organisation.
Lower maintenance costs
When you hire directly from an equipment supplier, asset management and equipment maintenance costs are borne by the supplier, not the customer. This eliminates the need to invest in equipment for cleaning, repairing, and repainting the equipment.
Still, it also removes the requirement for storage space and the need for lifting equipment to transport the equipment around a storage facility.
The cost of neglecting preventative maintenance can have a knock-on effect on other areas. For example, if one piece of equipment is down, it can impact your company's profitability, efficiency, reliability, and confidence.
For example, unplanned downtimes rate can range from 20-30%. You would need to rent a replacement to do the work, thus increasing your company's overall cost of the assets.
Forgo this problem by allowing the rental company to ensure safety and undertake repairs and reduce your maintenance costs. This factor applies to a wide range of everyday construction and worksite equipment. It is just as crucial for your event toilet hire for your construction site as your diggers and other heavy machinery.
Save on tax
The tax returns of individual businesses are complicated. There is no denying that. But rental expenses are deductible, and acquired equipment is taxed at its depreciation rate throughout its useful life.
In general, rental expenses are more financially flexible than significant, capital-expense purchases, which are more difficult to predict. Depending on the nature of the business, they may be considered project expenses or may be eligible for a tax deduction in specific circumstances.
Improved borrowing power
Banks treated rented equipment one way and owned equipment another similarly to the Internal Revenue Service. Because rental charges are not considered liabilities on the balance sheet, a corporation can keep its greater borrowing power by renting equipment instead of purchasing it.
Regarding assets and liabilities, debt on capital equipment or an aged machine may or may not harm a company's overall financial picture, depending on the specific figures and circumstances involved.
No depreciation costs
When you own machinery, you are subject to significant depreciation expenses. Apart from the initial investment, reselling equipment and keeping it in good working order involves a substantial amount of additional effort and money.
As the value of your asset continues to decline, it will become increasingly difficult to recoup the cost of your initial investment. Renting construction equipment to prevent the losses associated with depreciation is an option to explore, albeit each company operates differently.
Improved flexibility
Variables in today's corporate environment necessitate adaptability. The most significant of which include;
● severe recession
● thin profit margins
● increasing regulations
● market volatility
● expanding demand for specialised competencies
● general desire to provide excellent service, excellent products, and efficiency.
Companies that rent equipment can respond to specific niches, financial volatility, and the ebbs and flows of demand more effectively. It's a flexible alternative, especially when examined as part of a pooled connection with a reliable equipment partner.
The greater the number of functions a machine, whether rented or purchased, can perform, the more justifiable its cost will be.
For example, a device with a versatile body and replaceable appendages that can dig, reach, and lift would be more cost-effective than a machine that can only perform one of those activities.
Companies can also be more flexible as they can experiment with different equipment and processes without having to make the larger commitment of buying equipment. One example of this can be found with drone use in construction.
Drones have been used in business for years. They can deliver products and take photographs and videos, but they can also be incredibly useful for construction companies. A drone allows you to survey a construction site much more quickly and thoroughly than other methods.
If you have a trained drone controller, you can dramatically cut down on surveyance time. In any business, time is money, so this will allow you to work more efficiently and cut down on costs, while delivering your service more quickly for your clients.
Upgrade easier
Technology-enhanced equipment can be highly beneficial to a company's operations by increasing efficiency and specialisation on a given project.
Rental equipment can potentially perform a few highly specialised tasks so much better than general equipment that you gain both in terms of time saved and in terms of reduced wear and tear on the machines themselves.
For example, companies that provide Yanmar generators and similar machinery can help the business or project team achieve specific goals while providing peace of mind because of the essentials that we come to expect, such as manufacturer's parts and labour warranty. It is also easier to make upgrades while also cutting back on overall costs because of plug and play capabilities, resulting in greater efficiency too.
A number of valuable features are included in today's models, like digging guidance and quick-change attachments, that are made possible by straightforward systems.
Many organisations tend to make do with whatever machines are available to them or that they already own. Still, focused equipment selection based on technology has the potential to allow you to perform many existing tasks with fewer pieces of machinery and in less time than you would otherwise.
Aside from the fact that high quality rental equipment can help you improve your ability to compete in the market, renting also enables you to avoid the risk of your machinery becoming unworkable or obsolete.
An excellent rental partner regularly rotates machines out of the fleet to have the most up-to-date models and technology accessible, allowing you and your jobs to profit from the particular skills of the devices in question.
No disposal concerns
Renting equipment eliminates the need to worry about selling or disposing the equipment once it has served its purpose.
The inconvenience connected with this procedure, which typically involves using auction sites or other similar methods, leads to a low return on investment and the equipment not being valued at its genuine value.
Rental considerations
While the above ten benefits can be adapted to fit a range of different companies, not just the construction industry, you must understand your requirements as per your rental agreements.
Different rental companies can have limitations on use or rental duration, and costs can vary from company to company.
How beneficial renting your machinery can depend on finding the right rental partner and being able to source the solutions you need at a cost you can easily afford.
Factor in issues such as accidental damage or misuse due to inadequate training etc., as this can lead to increased costs should you need to pay for repairs.
However, insurance policies either taken in conjunction with a rental company or independently can help you cover these costs.
When you've decided to rent construction equipment instead of buying one, you can begin by Googling for phrases like “dry hire excavator” or "construction equipment for hire". Doing so should provide a list of rental companies that you can check out.
