How to start a lucrative Equipment Leasing business in Nigeria

Equipment leasing is a business model in which companies rent out equipment to other businesses or individuals for a certain period of time. The leasing company retains ownership of the equipment while the lessee pays for its use.

The equipment could range from construction equipment, office equipment, agricultural equipment, and medical equipment, among others. This business requires extensive research to identify the types of equipment that are in demand, the target market, and the pricing strategy. The equipment leasing industry is regulated by the Equipment Leasing Association of Nigeria (ELAN).The Nigerian government has provided tax incentives for businesses that engage in equipment leasing.

The equipment rental industry is expected to reach USD 58.49 billion by 2029, up from USD 42.64 billion in 2022. The constant industry growth means it is ripe for investment. Creating a robust plan can help you start your business in this industry today.

According to a report by the African Development Bank, the equipment leasing industry in Nigeria is valued at $10 billion and is expected to continue growing due to the increasing demand for equipment in various sectors such as agriculture, construction, and healthcare. Globally, the equipment leasing market was valued at $900 billion in 2019 and is projected to reach $1.3 trillion by 2027.

 How profitable is an equipment rental business?: The type of assets you have for rent will determine the profitability of your equipment rental business. If you have a fleet of high-value equipment, expect high-profit margins. If you are primarily renting out tools and equipment for everyday DIY projects, the profit margin will be low. You can either mix and match your range of equipment to cater to every kind of customer or you can target a specific niche in your local market that has zero to low competition.

Over the year private and public have engaged service of non professional to handle equipment rental without technical expert to run and maintain the business. But a technical person with fore-knowledge of the business and large data base of clients and agents can start with only one equipment and move the company to enviable position with proper accounting best management practice.

Good equipment will achieve result in no time while boosting the image of the company. Equipments such as Bulldozer, Excavator and Pay-loader can either be indirect or direct lease to a company or place in daily rental of #140,000, #150,000 and #100,000 respectively with a projected forecast of 15/18days when starting business operation and maximum of 22/24days per month at peak period.

In less than a year payloader payback its original cost and can work for minimum of three to four years before resell to reduce/avoid high cost of maintenance. The income per day at minimum is N100,000 with minimum working turnover of 18 days in a month.

The client engages the equipment for 8hrs/day for various contracts i.e. daily, weekly or monthly. This contract must be accompanied with a contract agreement duly signed by both parties and payment made upfront in cash or open cheque.

Market strategy adopted in this business of leasing/rental is commission base system where agents is been paid 5% commission on whatever contract signed; by doing this we will built a network of customer around us and break into the cartel that control the business with maximum patronage on booking.

Maintenance is also a key factor in equipment leasing; if your equipment has less downtime the client cartel will always recommend the equipment to other. Proper maintenance prolongs equipment life span (preventive/plan maintenance rather than breakdown); the equipment requires servicing after running 180-200 hrs of operational time.

The operator must daily greasy all moveable part of the equipment. It’s strictly recommended that after using the equipment for a period of 3year should be put on sale to cut down maintenance cost and downtime. The staff professional conduct and safety precaution during operational hours go a long way in customer satisfaction and help to maintain good relationship.

Types Of Equipment Used By Equipment Leasing Businesses In Nigeria are Excavators, Bulldozers, Forklifts, Cranes, Loaders, Backhoes, Graders, Dump trucks, Concrete mixers, Pavers, Crushers, Drilling rigs, Welding machines, Generators, Air compressors, Pressure washers, Scaffolding, Concrete pumps, Load banks, Tower cranes, Asphalt plants, Water trucks, Earthmoving equipment, Road sweepers, Concrete cutters, Power tools, Jackhammers, Tractors, Rollers, Excavator attachments, Demolition equipment, Trenchers,

Hire Skilled Employees: The employees you hire for your equipment rental business must be skilled engineers and the best salespeople. The engineers would always need to ensure your equipment are working at their peak performance rates and your salespeople must be skilled at bringing in more clients to your business on a weekly basis.

Market Your Business: This is the most important part of running any business as without sales your business is dead. The first thing you could do is to build an SEO ready website so you can get SEO traffic from people searching online for businesses that lease the equipment you have, then you can further reach out to companies who lease equipment from companies like yours.

Overall, the equipment leasing business in Nigeria  presents a lucrative opportunity for investors and entrepreneurs looking to tap into the growing demand for equipment in various sectors.

How to start a successful Equipment Leasing Business in Nigeria. The body of this work is formed from consulting experienced and relevant people running Equipment Leasing Business, to get first-hand information about the success secrets and marketing strategies deployed to achieve business success .

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