How To Start A Lucrative Equipment Leasing Business In Nigeria: The Complete Guide
The equipment leasing business in Nigeria is a very lucrative one. Ranging from construction equipment to electricity generators, farm tools, and much more, a lot of people have decided to act quickly, take advantage of the equipment leasing industry, and make as much revenue as possible from the sector.
When people get government contracts to construct roads and more, they lease equipment for the job since buying the equipment could cost tens or hundreds of millions of Naira.
For instance, to lease an excavator, they could pay 150,000 Naira daily to the company it was leased from and they could pay over a million naira daily to the company a crane was leased from.
In the area of electricity generators, a 100kva generator could cost 130,000 Naira a day to lease, and with the growing number of events daily, more people are leasing standby generators on a regular basis.
These two examples above have shown that the equipment leasing business is a multi-million Naira industry, and taking advantage of it is a smart move for any business savvy entrepreneur in Nigeria to make.
What Is The Equipment Leasing Business In Nigeria About?
The equipment leasing business is about the short or long term rental of equipment to clients to be used in their respective activities like generators for events, excavators for construction work, and much more.
Business Opportunities In The Equipment Leasing Business Around The World
The equipment leasing business opportunities are bountiful, and so, makes it very lucrative for anyone to venture into. Some of them are:
1). Generator Rentals:
Too many events happen every day in Nigeria, and with the poor electricity supply, event managers are constantly leasing backup generators as a means of providing backup power if the electricity and primary generator set fails. With daily rental rates of 100kva generators and above ranging from 120,000 Naira and more, the generator rental business is a profitable one to venture into.
2). Construction Equipment Rentals:
Construction equipment are used for the construction of roads, bridges, and also in solid mineral mines. Their rental costs are in the hundreds of thousands per day for excavators, swamp buggies, bulldozers etc, with cranes even costing millions of naira to lease daily.
The construction equipment rentals business requires large-scale investments to be made, but can earn anyone in it millions of Naira daily.
3). Farming Equipment Rentals:
Just as construction and generator rentals are interesting business ideas, farming equipment rentals of tractors and the likes can equally cost over 100,000 Naira daily to lease.
4). Equipment Rentals Brokerage:
If you can’t afford to purchase any equipment for rentals, you can first venture into its brokerage and over time, build up enough income to purchase your own equipment.
These are just a few equipment rental business ideas in Nigeria, and as such, shows that there’s so much prospect in the leasing business.
Facts And Benefits Of The Equipment Leasing Business In Nigeria
- It can be a very profitable venture depending on which equipment you’re leasing.
- The equipment can be expensive to purchase.
- You can start up as a broker.
- It’s a source of employment.
- Equipment leasing helps businesses save more money they could have spent buying equipment.
- It’s easier for businesses to lease an equipment than to get a loan to buy new equipment.
- With equipment leasing, companies can easily get an upgrade without having to buy new equipment.
- Equipment leasing helps you avoid the risks and costs associated with owning equipment.
How To Start AnEquipment Leasing Business In Nigeria: Step By Step Guide
1). Decide What Type Of Equipment Leasing Business You Want To Start:
There are many types of equipment leasing businesses ranging from construction equipment leasing to generator rentals, farm equipment leasing, computer equipment leasing, and much more.
To choose which equipment leasing business you want to start up, carry out an in-depth market research to first understand the market, pricing structure, and more. With this information in hand, you can choose which equipment leasing business is best for you to startup.
From experience, generator rentals for events and construction equipment rentals are two of the most profitable equipment rental businesses to start up in Nigeria because leasing a 100kva generator for one day could cost up to 130,000 Naira and leasing an Excavator could cost the same range, with cranes even costing over a million Naira a day to lease.
Within the generator rentals business for events and general backup power, you could also lease out mobile air conditioners and hiabs.
If you don’t have the finance to purchase the equipment, you can start out as a broker and get a commission on every successful rental that is paid for.
2). Purchase The Required Equipment:
The next step is to go on to purchase the required equipment you intend to lease. You need to buy the most demanded equipment so that your money is used in the most cost-effective way possible.
For construction, an excavator is pretty much the most important equipment to buy. It gets leased the most and you’d get paid between 120,000 to 180,000 Naira a day for it. Over time you can go on to buy a low bed for transporting equipment and also for rentals, a swamp buggy, a bull dozer, a crane, and much more.
For generator rentals, you need a 100KVA and 200KVA generator. Some clients may request for a 300KVA, 400KVA, or 500KVA generator, which warrant far higher payments. But the two most important sizes to buy are the 100KVA and 200KVA generators.
For other equipment, you should determine the most demanded equipment in their class and first purchase them, before going on to buy others.
3). 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.
4). 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.
An example is to reach out to event planners for generator rentals and reach out to contractors, construction, and mining companies for construction equipment rentals.
Also, hire and train a highly skilled sales team that will deliver on your goals and targets.
Challenges Of The Equipment Leasing Business In Nigeria
- Lack of experience can make it difficult to break even.
- Key equipment can be very expensive.
- Marketing challenges can cause your business to experience low rentals at the onset.
- Poorly managed supply chain can make it difficult or expensive to transport your equipment to the clients who want to use them.
The equipment leasing business in Nigeria can be a Lucrative and profitable venture, due partly to its vast market demands and largely on your own ability to build a wide supply chain network. If you’re looking for a business to venture into, the equipment leasing business in Nigeria is another option to explore.
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What are your thoughts on how to start an equipment leasing business in Nigeria and Africa? Let me know by leaving a comment below.