Editor’s note: This article was first published in September 2010. Its phrase «in times like these» refers to the economic crisis in Spain in 2010.
What started out as an option for a few companies, renting (long-term rental of goods under a service contract, as it’s known in Spain), has become a business idea in strong demand from companies for all kinds of products: vehicles, computers, machinery, loading cranes and so on. These days, pretty much anything you can buy can also be obtained through a renting contract.
Advantages of using a renting company
The advantages of getting products through renting are plain to see and countless, especially for companies that are just starting out, which get the chance to avoid a large upfront outlay of capital.
If the company closes, you won’t have to keep paying for products you bought on instalments and no longer need.
Also, when production rises considerably or you hire new sales staff, you can turn to renting to add furniture or simply get a new vehicle for the new worker. If that person doesn’t work out as an employee, the cost of the investment lasts only as long as they stay with the company.
Advantages of starting your own renting business
The biggest advantage of a renting business is how quickly you recover the capital you invest. You buy the products and then rent them out, and depending on the type of product, you can rent them out again several times over its useful life.
Another advantage of a renting business is that investment grows with demand. If there’s no demand, there are no further variable costs, and fixed costs are minimal.
You decide how big your company gets and how much you want to diversify.
As a business model, it’s usually well received when you apply to a bank for financing, because banks know how profitable this business is: many of them have a policy of getting their own furniture and IT equipment under renting contracts.
Without a doubt, renting is a huge opportunity and a profitable business idea that shouldn’t be ignored in times like these.
Further reading
- A virtual assistant company as a business idea
- Business ideas in leisure and tourism
- The businesses of the next decade
- Business ideas that grow out of social media
- How to lose your fear of starting a business
Featured image: Goterrestrial, CC BY 4.0, via Wikimedia Commons.
