14 Ways to start Equipment Leasing Business in Nigeria

Filed in Business Idea, Business in Nigeria, Top Ideas by on August 5, 2020 0 Comments

How to start equipment leasing business in Nigeria:  Equipment leasing is one of the most easiest.

Yet generally overlooked ways to sponsor your business.

Although it won’t literally add to funds you already have.

It will just help you save lots of money that can be transformed to other significant uses.

In this chapter, you will attain the fundamentals of equipment leasing.

And how to accept it as a way of sponsoring your business.

See also: 26 Equipment Needed For Landry Business in Nigeria

What is Equipment Leasing?

Equipment leasing is an agreement in which a business sublets.

The equipment needed for its functions for a particular number of months and at a particular cost.

At the end of the rent period, the business (or lessee) may buy the equipment for its fair market worth.

Or a fixed or predetermined amount.

Continue renting it, or return it to the main owner (lessor).

The basic benefit of equipment leasing is that it costs pretty much less than buying new equipment.

This makes it a lifeline for cash strapped businesses striving to keep afloat.

It’s also captivating to entrepreneurs who are aiming to bootstrap.

Equipment Leasing Business

3 Things To Keep in Mind Before You Start an Equipment/Property Leasing Business

Like every business venture I’ve shared with you on Small starter.

The hiring/leasing business has its own crucial success factors.

In this section, I’ll list three very substantial things you should have in mind.

Before you even make a move to go into this appealing industry.

Equipment Leasing Business

(i)  It’s a capital intensive business

If everyone can afford their own warehouse, construction equipment or tractor, they would probably own them.

The advantages you will have in this business is the very high cost of the hired equipment.

Which is particularly the reason why clients will come to you to lease or hire.

(ii) Your equipment is the essence of this business. Take very good care of them.

One of the great things about the hiring/leasing business is that whenever your equipment is with a customer.

Equipment Leasing Business

It’s pretty much still making money for you.

And this is why you totally need to make sure that your equipment/property is in good working state at all times.

As the main owner of the equipment, it is your obligation to make sure they are managed, maintained and operated according to the suggested standards.

It’s substantial that you strike the balance between maintenance and utilization.

(iii)  The conditions and terms of hiring your equipment must continually be clear

In dealing with clients who rent your equipment/property, you must continually set clear conditions and terms for the use of your precious asset.

If not, you’ll be fortifying people to cross the line, and they may be incautious with your equipment, and possibly damage it.

Read on: E-mail/Telemarketing system in Nigeria

Types of Equipment Leases

There are two kinds of equipment leasing arrangements. They are:

1. Operating leases

Also called service leases, operating leases procure for both maintenance and financing.

That is, the lessor is accountable for protecting the equipment/asset as the lessee uses it.

The cost of this sustenance is typically worked into the rental price paid by the lessee.

Office copiers, trucks, medical diagnostic equipment.

Computers and automobiles are usual examples of equipment tangled in operating leases.

Equipment Leasing Business

2.Financial leases

Also known as capital leases, financial leases are totally different from operating leases.

Because they do not provide for sustenance.

They can not be cancelled, and they are commonly carried for a period that accords.

With the exact useful life of the equipment. Thus, they are totally amortized.

PRACTICAL STEPS TO STARTING AN EQUIPMENT LEASING BUSINESS IN NIGERIA

3. Study your market

Starting the precise same business in two situations mere miles apart can lead to completely different results.

A bike rental downtown will have various customers than one by the beach.

And they will totally have different needs.

Therefore, before you get started ensure that you know exactly what your customers are searching for!

The best way to do this is very simple – talk to them.

If you want to lease out construction equipment, talk to confined construction companies.

See also: 13 Establishing a business in Nigeria, Everything you need to Know

4. Draw up a business plan.

A clear business plan is substantial when starting up a leasing company.

Most especially if you plan on borrowing money.

If you can provide a well researched and convincing business plan to your bank.

They are more presumably to financially help your new leasing company.

A business plan will typically begin with a company summary and executive summary.

Which will list the structures and core values of your business.

Read also: Dealing with Angry customers in Business

Your business plan should plainly state what items you intend to lease.

And a market evaluation summary which indicates where in the market your business will be located.

It should also include an implementation summary and strategy outlining how your business will function.

As well as a management summary enlisting how it will be operated.

You can access useful examples of business plans/strategies for leasing companies online.

It is substantial to have well researched and clear financial plans which are achievable and realistic.

Read on: 19 Ways to Start A Dump Truck Business in Nigeria

5. Investigate the costs.

A leasing business is one that can require approximately high amounts of start-up capital.

It is simply a business which functions by purchasing things and then leasing them out to any other businesses.

So you will definitely need to be able to develop a good stock of equipment before you can even start leasing things out.

Before you go any further remember the potential costs and draw up some fundamental estimates.

All of this study on the leasing market.

The potential profits and the costs will be used when you decide to write up your formal business strategy.

6. Don’t buy more, buy smarter

By knowing your clients and what they are searching for you can easily make smarter rulings about the equipment that you purchase.

Avoid idle inventory at all possible costs.

It just takes up money and space that you could totally use to develop your business!

Don’t overspend on equipment at the beginning.

Buy your minimum viable supply based on your market research.

Immediately you get started, then you buy more of the equipment that is very lucrative and popular.

7. Find the best deal for your equipment

Unless you’re starting a rental business due to you finally won the lottery and probably got bored.

You’ll want to make the very most of every penny or cent you spend.

Your equipment is presumably to be one of your biggest investments so ensure that you invest your money carefully.

Instead of spending all of your money on the best and newest equipment you can possibly find, consider your opportunities.

8. Get your paperwork in order

Not the sexiest of topics, but a necessary one.

The work you need to do relies solely on where you are based.

Besides the procedures of starting any kind of business, a rental business has excess insurance liabilities.

Your whole business depends on non employees using your equipment.

9. Create partnerships

Start by questioning yourself ‘What other services or products are my customers searching for?’

If you are starting up a bike rental shop, your clients might also need:

Place to stay – hotels, bed & breakfasts, …

Place to visit- museums, nature parks, …

Things to do – restaurants, amusement parks, shopping malls.

Read on: How to Start Orange and Lemon farming in Nigeria

10.Find the right tools for your business

As a small business operator you need to take care of probably more than just renting equipment.

Communication with (potential) customers, managing employees, accounting …

As luck would have it, we have developed a list of business applications that we approve.

Read also: B2B event marketing benefits in Nigeria

11. Treat your equipment right

Your business relies on your equipment – no equipment, no possible rentals!

That is why it is very necessary that you take very good care of your equipment inventory:

Regular maintenance – locate & fix potential predicaments before your clients do!

Prompt and complete repairs – fix any issues briskly and thoroughly.

So they don’t originate more trouble in the near future

Cosmetic fixes – your equipment should not just function like new.

It should totally look like new as well!

Ensure you create a good impression for (potential) clients

Take very good care of your equipment and it will also take care of you.

Read also: How to Start Embroidery Business in Nigeria

12.Create a waterproof agreement

Do you think clients enjoy arguing with you? And do you also like arguing with them?

The exact answer to the first question is ‘no’.

And also ‘no’ should totally be your answer for the second question as well.

Although what can you possibly do to avoid arguments?

Ensure you and your clients are always on the same page.

How should the rental equipment be operated – what is acceptable wear and tear?

Where and when does the rental start and end?

What should the client do if something possibly goes wrong?

What are the penalties for loss, theft, damages, late returns, … ?

Clearly contemplate the answers to these questions up front to avert conflict and confusion later on.

13. Build up your business’s physical infrastructure.

Once you have taken care of all the possibly preparatory steps you can start to define your business and definitely make it a reality.

A leasing business will need a strong physical infrastructure to meet the demands of its customers.

Depending on what your business focuses on.

You will need premises to keep your leasing equipment and also office space to supervise the business.

You will also need vehicles and staff to supply the items that are being rented out.

Refer to the implementation strategy portion of your business plan.

See also: How Online Trading Business Goes in Nigeria

14. Register your business.

It’s necessary that you make sure the business is accurately registered. To operate lawfully, your organization will need to be enrolled in the state in which it operates.

Luckily, the procedure by which a business is registered is very simple.

Business license application forms can typically be found at city hall.

Readalso: How to Start CNG Business in Nigeria

CONCLUSION

If you’ve followed all of this recommendation you should have a very good idea by now.

About what exactly you should do to turn your new rental business into a stunning success.

But don’t just keep it all in your head.

Bring it together into a business strategy for your rental business – a rental business plan.

A business plan is substantial for the attainment of your business.

Keep in mind the old proverb saying– failing to plan is planning to fail.

 

 


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