Use this step-by-step guide to understand and implement the most practical rental business models from the start of your rental business.
Take a moment to decide a niche in which you want to work in the rental industry. We have prepared this guide to help you get started with your rental business.
I’m pretty confident that you would want to plan your financials well in advance to survive the early struggle days of your startup.
The rental business models listed in this article help you understand how your business begins to generate revenue. Looking to start a business, decide what type of model will support your rental startup goals and take the time to incorporate the design into your business plan and market research.
- Which product do you rent?
- Do you offer additional services in addition to rental products?
- How would you like to market your product or service?
- How much does your rental company cost?
- How are you going to make a profit with your equipment rental business?
- Need to provide additional transportation services such as pick-up and drop-off?
- Also, customers prefer to rent than to buy. They also find renting to be the most cost-effective solution.
Table of Contents
Business to Business (B2B)
Simply put, business-to-business (B2B or BtoB) is one of the profitable rental business models between two registered companies where a business transaction or business activity takes place.
That means one company becomes a consumer of another.
Here is the list of a few B2B rental models:
- Agricultural equipment such as cutters, tractors, shredders, harvesting equipment, hay, and forage, planting equipment, sprayers, seeding equipment, tillage, etc.
- Healthcare equipment such as Wheelchair, Oxygen concentrator, Feeding pump, hospital bed, a compression pump, height tilt table, and more.
- Podcast equipment such as a microphone, headphones, computer, mixer, microphone stand, etc.
To make your B2B business successful in the rental industry, you should do adequate planning, develop customer relationships, participate in rental conferences and tradeshows, develop an attractive and reliable online presence, do brand advertising on social media, etc.
Business to Consumer (B2C)
Business-to-Consumer (B2C) is usually a direct business transaction between a rental company and its customers.
In this rental business models, the leasing business (online or offline) rents assets and services to customers. Here is the list of a few B2C rental models:
- Dress rentals such as Tuxedo, Sherwanis, Lehenga, Blazers, Formals, party wears
- Cameras rentals could be lenses by Canon or Nikon or Fuji, memory cards, tripods, lighting equipment, LED panels,
- Camping equipment such as tents, sleeping bags, mattresses, rope and bungee cord, tent pegs, first-aid kit, canteen, water bottle, etc.
- Costume rentals – the products could be masks, fancy hats, superheroes, Halloween costumes, wigs rentals, plushies and t-shirts, children’s costumes, etc.
- Hunting equipment such as Binoculars, firearms of some kind, rifles, ammunition, knives, shotguns, trail camera, treestands, crossbows, bows and arrows, hunting boots, hunting backpacks, hunting jackets, etc
These could be short-term rental business models on certain occasions. The rental businesses may also sell their assets to interested customers. It is quite a common practice in clothing rental stores – they also provide pick-up and drop-off service with an additional service charge, of course.
The rental merchant, business owner, and the staff at the rental store play a critical role to understand their target customers and then showcasing the relevant assets so that customers can rent at an affordable price.
Recently, a new trend “Recommerce” has emerged. This term is often confused with renting. Recommerce is a common way of allowing a customer to exchange for another asset or “sell back” to a merchant at an agreed price.
Peer-to-peer is also one of the rental business models that is growing at an alarming rate; the revenue generated is very satisfying compared to other rental business models.
This P2P rental model is not a new concept but it is implemented with ease using the latest technology trend available today. Here is the list of a few P2P rental models:
- Bag Rentals, you can rent authentic designer bags from Mulberry, Gucci, Celine, Chanel, Givenchy, Louis Vuitton, etc
- Lawn & Gardening equipment tools such as Lawn Mowers, trimmers, chippers, pruner poles, lawn blowers, turf cutters, lawn edgers, vacuum cleaners, lawn rollers, etc.
- Yachts or Boat rentals could be sailing boats, jet skis, bareboat, for diving, or fishing, or it could be superyachts as well…
However, the latest technology did help to expand the chances of advertising on Google, online stores, rental marketplaces, etc., through online advertising mediums rather than traditional small-scale rental methods. You can now reach a large number of famous people.
The existing rental business models that entered P2P were inspired by marketplaces such as Airbnb, Uber, GearFlow, Chegg, and Wrbo.
If you are technically skilled, you may be tempted to tap on the opportunity to create a P2P Marketplace Startup Business yourself where the lessor can rent anything anytime, from anywhere.
If you are determined to do the startup on the P2P marketplace then alternatively you may also consider hiring a professional company that can get you up and running in almost no time.
In the subscription rental business models, the customer pays you the usual fee to rent a product from you. The client who rents the property pays the fixed amount agreed in a rental agreement between the equipment rental merchant and the customer.
This is not a new model. Long before the Internet era, people paid subscriptions to enjoy services such as newspapers, milk, and meat delivery at the front door.
In the olden days, deploying and expanding to get a new subscription was not an easy task for rental businesses. They also had their challenges, such as collecting payments on due dates, following up with customers, sending reminders, invoicing, and tracking payments.
But in today’s digital world, there are payment systems such as PayPal, Stripe, WePay, ApplePay, GPay, and WorldPay that will allow you to start and process recurring payments with an easy-to-use interface and helps you to improve the operational productivity of your staff.
You can also generate financial and accounting data, orders, reports, and business intelligence using out-of-the-box analytics platforms such as Recurly, Chargify, Chargebee, WooCommerce Subscriptions, SaaSOptics, and Braintree.
Here I’m listing a few subscription rental business models which are self-explanatory, just to give you an idea.
If you think this list is restricted then please reach out to us and we would be happy to come back and update the list to benefit other entrepreneurs who are looking for a piece of similar information.
- Car Rentals
- Bicycle Rentals
- Computer Rentals
- Property Rentals
- Vacation Rentals
These platforms can be integrated with third-party software such as Salesforce and Quickbooks. They support small and medium-sized subscription-based rental businesses and eliminate the job of manual data entry from existing staff with out-of-the-box automation tools.
Rental Business Models: Conclusion
If you are starting a rental startup then you should carefully consider all the discussed rental business models mainly depending on the niche you are interested in.
Read the step-by-step guide to start any rental business to understand if this is something you really want to start.
You should also consider your finances for your startup by looking at various options to choose which will benefit you in the long run so that you take total control of your own business and take the correct decisions at the right time.
Since we have discussed a few prominent rental business models so what is your pick?