Editor’s note: This article was first published in November 2010, during the economic crisis. The claim that buy-and-rent is still untapped in many sectors reflects that moment.
One innovative, pioneering business in Spain worth mentioning is Innovent, a company that has spent years buying equipment and then renting it to other companies. The idea has proved to be a very profitable business in times of crisis, because that’s when companies really try to save on equipment investment, whether furniture or electronics.
The idea behind the business is simple. When a company closes, moves to new offices or just wants to get rid of its old equipment, that equipment would normally end up in the trash or sold for scrap, if it weren’t for the companies working in this sector. Now those companies have a new way to make money from it.
Innovent buys the equipment from the company that no longer needs it and then rents out the old but still working gear. This is a perfect fit for a newly opened company that can’t afford a big investment to get started.
In fact, we’ve said before that to start a business successfully you have to look closely at your expenses, especially start-up costs, because even when a business is profitable, these costs can swallow up the profits.
With companies like this, both clients win. One gets paid for material it was going to throw away, and the other can rent it instead of making a large investment.
That’s the case with InnoVent, though there are also companies that buy and sell equipment, where the operation is very similar. The only difference is that they don’t rent the equipment out; they resell it.
The point is that the most profitable businesses are those where you buy something for less than you will later sell it for, and buy-and-sell, or buy-and-rent, is still untapped in many sectors, not just business equipment.
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