What Will You Charge For Your Rent- What will your expenses be? Is it only me, or do you expect to have an initial break-even for your rental business only? Are there monthly fees? Do you install it, or do you do it yourself? Are these fees an additional job or service you would be willing to do? Is the rental fee
o If so, will you add a service fee to top up your business’s budget?
o If you are a large company, will your company agree to provide all the services? “Invite only” or “domestic” service?
o When will you turn a profit? 6 months or a year after the initial break-even point?
Confirm with your company if your company is responsible for the installation or at what cost to clean and maintain your corporate property. Check that you have submitted professional photos and paperwork to help the property owner keep you fair with his fees and answer any questions they may have.
o Is this area a high-demand location? Don’t say $50 is the only estimate you can go by when doing your homework on a particular location or order. If you indicate that the farm & city address is located in a predominantly metered high rent area, you may have a problem. Check the electric curlers/exceptional outside lights/security (like drug and installation security cameras) required for high rent areas, and look for any restrictions on the rental fees in writing outside the package.
o Can you afford to install and pay for the electric curlers required in this particular high rent area? Will it take too long to break-even on your rental fees and the start-up costs associated with it?
o Will you have to pay for any installation? How long will it take for you to turn in enough money to cover the installation costs (it doesn’t take long when you take a look at how long it takes to clean the curlers and lights in a typical night!). Will your company, provide installation?
o Break-even is supposed to be for a rental that is at least 50% more expensive than the rental in monthly rental fees/ passwords. Does it take a while to reach an annual break-even? What are your monthly expenses? Do you rent the amount of time that you can afford? If you are a week-long rental, ask yourself if you estimate that you can turn out 30% of your packages per week during the month? Could upside down sections, years of processing statements, and bills also mean that you are not renting your time enough (See section #2)
o Will you have to pay for this service on a monthly fee?
o Are there any electronic and telephone access charges? Will you worry about being non-existent, is the company off-hours still available? o Do you need to pay for the return phone, internet, and high-tech upgrade fees?
o Part B – My most important questions
- What will you charge for your rental? When will your customers pay that? Will you have to have an advance credit for that segment of your cash flow (all rents are non-refundable), or is the customer responsible for first-time payments to cover your valuable materials?
o I doubt it’ll be that simple, will there be any required discounts that the customer has to pay IN FROM ONCE to make their rental but before the job is done and before your company gets paid (at least this will be the length of the rental period – and it won’t be long enough that you’ll have to adjust your own margin).
- Do you have any understanding of what a customer could expect for the rental fees, at what discount rate, and how fast the equipment will be delivered? It will be quicker and cheaper for you (monetary savings), and you can expect its own set of maintenance and supplies upgrades to go with it.
- Do some of your customers pay in advance, in cash, or another way? Make sure your rental is consistent with your own customer payments.
o Be sure to budget for the rental process fully before you commit to that customer so you can see what a monthly rental will truly run-up to before asking the customer for that much money. Also, plan to recover the cost and depreciation of the equipment after the rental period. If the customer is caught short.