How to Start a Power Tools Rental Business

Gone are the days of manual tools. Time is precious and everyone wants to save it.

More than 2 decades ago, few people use power tools especially in rural areas of the Philippines where electricity was not available. Today, most households own at least one electric drill or an angle grinder, but what about those people who need it in a very specific project but don’t need to buy it? This is where the power tools rental business is needed.

After running an auto-repair shop for more than 5 years, I found out that people are always borrowing all kinds of tools every one and then. At first, I lent it for free but recently, I decided to rent it out to cover the maintenance. There are even people asking for tools that I don’t own and that we are going to cover below.

If you love DIY you will surely be interested in running this business. This business is not only profitable but could help you with your own DIY needs. Owning tools is a must by every household but renting it out is a business.

Skills and Experience Needed

In order to run a power tool rental business, you must have a background in electrical or automotive. This is because most of the power tools are either electric or gas-powered. If you don’t have any of these skills, you must hire someone who has knowledge and experience on how to repair these tools. Otherwise, you will throw away your broken tools and buy new ones which will cost a lot of money.

Do I Need a Store/Shop?

Ideally, you need a shop where you can display your tools. But if you don’t have a place inside a populated area, your house can also be your store. I don’t recommend renting a place that could add more expense. Tool rental is a slow start but long-term business so if you pay extra in space, that would cost a lot. Your rental service will be well known gradually. Let’s talk about this later on advertising and promotion.

How Much Capital Do I Need?

The initial investment needed to run a power tool rental business will solely depend on how many tools you are going to buy. Here, I am going to show you how much a small rental business would cost, the tools you need to buy, the quantity, and suggested brands. Remember that these tools are for rent so you need to buy durable and tested brands.

The list below includes power tools name, brand, quantity, and estimated total cost

  • Hammer Drill (Makita 700W) for heavy duty x 1 = P6,000
  • Power Drill (Makita 500W) for normal use x 1 = P2,100
  • Angle Grinder (Makita 710W) x 1 = P2,700
  • Angle Grinder (Bosch 710W) x 1 = P3,300
  • Grass Cutter (Kawasaki) x 1 = P9,400 x
  • Jackhammer (Stanley STHM10) x 1 – P11,300
  • Circular Saw (Black and Decker 1400w) x 1 = P5,000
  • Cut Off Machine (Makita 14″ 2000W) x 1 = P6,800
  • Portable Welding Machine (Yamato) x 1 = P3,500
  • Heavy Duty Welding Machine (Yamato) x 1 = P8,500
  • Oxy-acetelyne regulators (Harris) x 1 = P14,000
  • Oxy-acetylene full tanks x 1 pair = P9,000
  • Air Compressor (Vespa ½ hp) x 1 = 9,500
  • Concrete mixer with gas engine x 1 = P35,000
  • Battery Charger / Booster (powerhouse) x 1 = P4,000
  • Chain Block (1 ton) = P2,000 x 2 = P4,000
  • Chain Block (3 ton) x1 = P6,000
  • All major type of wrench sets and screwdrivers including electrical testers (socket, box, etc) = P15,000

Estimated Total Initial Investment = P155,000

The list above is what you need as a start-up. Add more tools depending on what type of tools are in high demand later. Normally, drills, grinders, welding machines, and grass cutters are the most rented power tools base on our experience.

Daily Rental Rates Per Tool

  • Drill = P150
  • Angle Grinder = P150
  • Grass Cutter = P500
  • Jackhammer = P500
  • Circular Saw = P150
  • Cut Off Machine = P200
  • Portable Welding Machine = P250
  • Heavy Duty Welding Machine = P600
  • Oxy-acetelyne set with tank = P3,500 with full tank / P1,000 regulators only
  • Air Compressor = P250
  • Concrete mixer with gas engine = P1,500
  • Battery Charger / Booster = P200
  • Chain Block = P150

All major types of wrench sets and screwdrivers including electrical testers (socket, box, etc) = these are your personal tools to use when you repair your power tools but you can also rent them out between P50 for a single tool to P150 for a set.

Business Permits

Even though you plan to operate from home, you still need a business permit. Remember that you are giving away your tools to strangers and it would be a big problem legally if your business is not registered. Register with FTI as a local business than with Barangay and your Town/City. The last to process is the BIR. It is important to have an official receipt because sometimes big companies are renting so you need to issue them OR to get paid.

How to Operate Safely

Although these are just small tools, they cost you a lot of money so you have a thief-proof system. For every customer, have them sign a paper with your policies and terms and conditions. Take a photo of them holding your tool and also a photocopy of their valid ID (Driver’s License, Voters ID, or any official ID with a picture). If you fail to do this, your Barangay will not entertain you when you complain without evidence.

Also, explain to each client the failure to return the tool on deadline will have an additional cost. The rental will only stop when the tool is returned.

Hot to Market Your Tool Rental Business

As I mentioned earlier, having a place accessible to everyone is good but you can also do this from your home. Social Media is a big factor. Join local FB groups and tell them that you have a rental business. Also, join DIY groups and promote your business.

Another great method that we tested before is tarpaulins. We printed around 10 tarpaulins and asked residents along the main road if we can post the tarpaulins on their fence for P500. Also, print a lot of flyers and post them on electrical posts or public properties like waiting sheds. Just make sure you are not posting on private property. You may also talk to people who work in the construction industry.

Why Tool Rental is Better that Automotor Repair Shop

Based on our own experience, we made more profit in tool rental than servicing vehicles. This is due to the following reasons.

Lower initial capital and can be operated from home. Yes, opening a car repair shop would cost you above P200,000 plus maintaining the workers. In rentals, you don’t need an employee except for a power tool mechanic if you need someone to maintain your tools. You don’t need space either.

Customer service. Running an auto repair shop is a big headache if your mechanic is not really experienced. Expect a flood of customer complaints that could put down your business. In tool rental, you don’t have to deal with irate customers. They are going to deal with you when they return a broken tool!

I know someone who started a power tool rental business in Bacolod City almost 2 decades ago, now his family is running a big heavy equipment rental business with tens of millions of assets!

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