When you plan your tool hire business it's very important to think about who your potential customers will be and make a realistic estimate of the level of demand. It's also important to find out how much existing competition there is.
Demand for tool and plant hire is closely linked to the strength of the housing market and the construction industry. The state of the local economy also has a big effect on the hire sector - when people have more money to spend they are more likely to carry out home and garden improvements and so to hire tools - or to engage trades-people who hire tools.
If you intend to target trade customers, remember that these will mostly be firms involved in the building and related sectors. Potential demand will depend on the number of such firms in your area. Before investing in expensive equipment, do some research into the number of businesses operating nearby which could be potential customers. Try checking local trade directories or have a look on Yell.com to get an idea of the number of builders, decorators, landscape gardeners and so on, who are based locally. Larger firms will probably own most of the equipment that they need to use. Smaller businesses may be a better source of trade - for many it makes more sense to hire than spend lots of money on machinery which is only occasionally used.
Demand from domestic customers is closely linked to the housing market - people moving to a new home are more likely to carry out some alterations or refurbishment. The size of the local population and any new housing developments will have a large bearing on the amount of trade you can expect. Also bear in mind that affluent homeowners are more likely to pay somebody else to decorate or carry out renovations than do it themselves. As a result, upmarket locations may not necessarily be the best bet for a tool hire business.
Other things that influence the demand for hire tools include changing fashions in garden and interior design. TV programs have encouraged more people to try refurbishing their homes and gardens. From time to time popular trends emerge - for example garden patios became very popular some years ago, and more recently wooden decking has become fashionable. Inside, polished wooden floors have gained in popularity, increasing demand for sanding machines.
The weather can have an effect too - large parts of the UK have suffered from flooding in recent years, leading to a surge in demand for water pumps and dehumidifiers.
Check out the competition
Having thought about the potential demand locally, you need to consider the level of competition that your business will face. As people are unlikely to travel further than necessary to hire tools, your competitors will be limited to other local firms. These might range from independent hire shops to branches of large chains such as HSS Hire, Brandon Hire, Speedy, Hire Station, or other national or regional chains. Several of the big builders merchant chains offer tool hire, including Travis Perkins and Jewson, as do large national DIY specialists Wickes (in partnership with Travis Perkins) and B&Q (in partnership with Hire Station).
Count how many of these businesses are already offering tool hire in your area. Have a look at the services offered by each of these competitors to establish:
- whether they concentrate on domestic or trade customers
- what range of tools they offer
- whether they hire out plant equipment
- if they offer repairs and servicing of customers' equipment
- whether they offer tools or other equipment for sale
- what prices they charge
- if they are members of a trade association
- if they are part of a quality standards scheme
- whether they specialise in any way - for example in garden or horticultural equipment
- what their opening hours are
- how knowledgeable and helpful their staff are
- whether the premises and fittings are modern and smart
Consider carefully how your new business will compete with any existing tool hire outlets.
Use the Record sheet to note down the results of your research.