Lionhart Capital Leasing
How to Start your Heavy Equipment Business Today
Many employees in the construction or transportation industries dream of one day starting their own businesses, being their own boss, setting their own schedule and reaping the benefits of high paying heavy duty contracts.
And starting a heavy equipment business may just be what your area needs if there isn’t too much existing competition or you have thought of a unique competitive edge that others haven’t.
Startup and maintenance can be costly but if your city doesn’t have a lot of these companies specializing in this field then you could be setting yourself up for a very successful endeavor. If you are considering starting a heavy equipment business, let’s look at a broad outline of how you can make your dream a reality.
Steps to becoming a heavy equipment owner/operator
Define your business and short/mid-term goals and market
If you don’t already have a definition for the business or specific services you want to offer, here are a couple of questions that can help guide you. What geographical region are you planning on offering your services in? Do you plan on starting in your local area and expanding later to your province, or the entire country? Are there specific types of machinery you want to introduce to the market? Is there a particular niche that you would like to target? All of these suggestions allow you to focus your efforts as well as help you build an outline for your business plan.
As mentioned above, heavy equipment costs can be very high. Even if you will be leasing your equipment you will need at least $100,000 to start your company off with enough capital for your first 6 months of business. During this period you are building your name, building your client list and bidding on projects for your business. Outside of the cost of equipment, there will be costs associated with registering, branding and marketing your business. Before you get to those points you need to ensure that you have the necessary minimum funding. Your local banks may offer small business loans, however securing a loan may be challenging depending on your financial background.
Another option is to lease-to-own your equipment through a financing broker like Lionhart Capital. There are a number of benefits to starting with a lease, including; Extensive tax benefits, no capital investment and protected lines of credit as well as a low monthly payment, to name just a few.
There are a number of ways you can secure your equipment. You can find equipment and pay full cash, you can do a lease-to-own agreement or you can get a loan.
You may want to start your business with just one piece of heavy equipment - as it will keep your initial costs down - and you could choose to rent additional equipment that you don’t plan on using often. This may be beneficial because you will be paying less to acquire equipment and you won’t have to hire staff for multiple types of equipment so you will also be keeping your regular business expenses down.
Now that you have sourced your funds and equipment it’s time to think about your company image. Now you want to choose a name, design a logo and start creating your sales materials that reflect your services and unique benefits to your company. At this stage, you should be looking at the competition and how you can differentiate yourself from them. In practical terms, you will want to consider all the different methods and channels that you will be marketing your company - in person, print materials, digital advertising, etc. and create a list of the materials you will need such as; flyers, vehicle decals, business cards, etc.
If you will be creating a website, be sure to check that the name you have chosen can be registered online and is not currently being used by someone else. There are free tools to check if your name is taken; https://who.is/
The first thing you want to do is a name check. There is a cost associated with this. The cost associated with business registration is dependent on the type of business, whether it is a sole proprietorship or a partnership. You will have options to register your business online, in-office or can send off your registration particulars via mail.
Get Business Insurance
Business insurance is very important, not only for your equipment but also for liability should anything go unexpectedly wrong at a job site. Your equipment is expensive and your business won’t be able to function without it, however, a claim from a 3rd party can be equally devastating. With sufficient coverage, you will have peace of mind and will ensure your business continuity in the event of an unexpected hit. Be sure to contact an experienced heavy equipment insurance broker to learn about the different types of insurance you may require.
You will need a Commercial Driver’s License to run your heavy equipment business. This is especially true if you will be the operator of your equipment.
How are you planning on getting the work done once you start getting clients? Do you plan to work by yourself or do you plan to hire staff? It’s tough to run a business single-handedly, but in our digital age, it is possible to outsource a number of tasks and jobs on a contractual basis, making your life easier. It is common for one-person operators to hire an occasional accountant, bookkeeper or even a virtual assistant and some tasks can be handled through software or apps.
Network with General Contractors - this sometimes will work a lot better than advertising your business with normal channels. Construction companies and General contractors get construction jobs and will need to subcontract any work they can’t do themselves. Heavy equipment is one of those things that has to be hired out. With a good connection, you can secure a long term stream of clients if you make the right first impression.
Network with the local Chamber of Commerce - This is a great way to network with more than just general contractors. Your local chamber of commerce provides networking opportunities with businesses in the heavy equipment industry and all the industries that may need your services.
Network with online groups and trade associations in related industries - Whenever you see an opportunity where you can network with key players in related industries you should make the best of it. Always have business cards on hand and stay abreast of the industry and all related industry events. Think trade shows, conventions, etc.
Paid Advertising with local newspapers/flyers/door-to-door - Traditional marketing still works and you should definitely use it, if it applies to your business.
Referral program to grow your customer base - once you start getting customers, give them an incentive for spreading the news about your business and your services.
Attend Community charitable events - network, network, every chance you get.
Partner with complementary (but not competitive) local businesses - builders, landscapers, etc. You can offer their current customers discounts for using your service or you can offer these local businesses a discount for using your services when they have a client that needs such.
Digital Marketing - work on your web presence; your website, Instagram, Facebook accounts.
Starting a Heavy Equipment Business - whether it's in the Transportation or Construction Industries - can turn out to be very lucrative. Don’t get intimidated by the thought that it will be a lot of work to get started. It will take work, it will take money, but you will be entering a field that has a lot of potential. If you play your cards right you will start seeing profit within the first six months of operation. Prepare yourself the right way with the steps mentioned above and you should be able to successfully emerge onto the market and start seeing success as a Heavy Equipment Business.