The Equipment Leasing Company Financial Model, Business Plan, and Dashboard provides you with complete, real-time control of your profit and loss statement, cash flow analysis, and balance sheet. Please see the video below!
1.0 Executive Summary
The purpose of this business plan is to raise and examine the allocation of $3,000,000 for the development of an equipment leasing company based in Omaha, Nebraska. Equipment Leasing Company, LLC (“the Company”) was founded by Peter Jackson. The business will specialize in renting/leasing heavy equipment specific for the construction and agricultural industries. The Company will generate substantial capitalization rates on its inventories.
1.1 The Services
The business will focus on providing heavy equipment for short-term rent and long-term lease. The business will generate its revenues on per-diem, per week, and monthly basis depending on the needs of the client. The business will provide tractors, forklifts, excavators, cranes, and related equipment that is commonly used among construction, contracting, and agricultural enterprises.
The business will arrange for all facets of pick-up and delivery of equipment provided by the business. The Company will employ mechanics that will ensure that all equipment is properly maintained and repaired as needed.
The third section of this document will further discuss the operations of the business.
1.2 Financing
At this time, the business is seeking a loan of $3,000,000 in order to commence operations. The vast majority of this capital will be used for acquiring equipment that will then be leased and rented to the general public. This document assumes that the Company will receive a 10-year loan carrying an 8% interest rate. The funds will be primarily used for the following:
• Lot development in Omaha
• Equipment acquisitions
• General furniture, fixtures, and equipment
• Working capital
Equipment Leasing Company, LLC would be a strong candidate for expansion capital given the highly predictable streams of revenue generated from rentals coupled with the massive asset base of the business. This document assumes that no further capital will be sourced within the next three years.
1.3 Mission Statement
Equipment Leasing Company’s mission is to provide end-to-end solutions for construction firms and agricultural enterprises that need cost effective equipment rentals.
1.4 Management Team
The business is owned and operated by Peter Jackson. He has 13 years of equipment rental and leasing experience. The Founder will be able to bring the operations of this business to profitability within one year.
1.5 Sales Forecasts
1.6 Expansion Plan
Over the next three years, the Company will make continued acquisitions of new equipment that can be rented to the business’ clients. The business may also establish additional locations in the State of Nebraska in areas where there is an immense demand for these services.
2.0 Company and Financing Summary
2.1 Registered Name and Corporate Structure
Equipment Leasing Company, LLC. The business is registered as a limited liability company in the State of Nebraska.
2.2 Required Funds
A $3,000,000 conventional business loan is sought to develop the operations of the business. Peter Jackson will provide $500,000 towards the development. The funds are to be used as follows:
2.3 Management Equity
Peter Jackson will continue to retain a 100% ownership in the business while concurrently serving as its sole member.
2.4 Exit Strategy
Given the highly predictable income generated from equipment rentals and leases, the Company could be sold for up to 10 times earnings by the third year of operation (including the sale of all owned equipment). A business broker would be retained to manage the sale. This event is not expected to occur for a substantial period of time.
3.0 Equipment Leasing and Rental Operations
As stated in the executive summary, Equipment Leasing Company, LLC will be involved with the ongoing rental of a wide range of equipment specific for the needs of construction businesses that operate in the greater Omaha market area. The business will typically focus on providing per-diem and per-week rentals of equipment. On average, the business will generate $600 per day per piece of equipment rented. The business will provide:
• Cranes
• Excavators
• Forklifts
• Pavers
• Scrapers
• Tractors
• Trenchers
The business will have its own in-house staff of mechanics and delivery personnel to manage the repair/maintenance, drop off, and pick up of all machinery.
4.0 Strategic and Market Analysis
4.1 Economic Outlook
Equipment rental and leasing businesses are able to enjoy substantial economic staying power given that they provide equipment for construction firms as well as agricultural businesses. Even during times of economic recession, the demand for this type of machinery remains strong as many companies complete needed renovations. The demand for agricultural machinery remains strong in any economic climate. Currently, the economic outlook is positive. Interest rates are declining as is the rate of inflation. The business will be able to more cost effectively acquire large-scale machinery as interest rates continue to decline.
4.2 Industry Analysis
Within the United States, there are 4,000 companies that provide short term rentals and leases of heavy machinery and specialized equipment. Each year, these companies aggregately generate $38 billion of revenue while providing 60,000 jobs. This is a mature industry, and the future growth rate will be similar to that of the economy a as a whole. One of the trends that will take hold over the next decade will be the integration of electrically powered equipment. The business will integrate these technologies as soon as it is economically viable to do so.
4.3 Customer Profile
Any construction firm or contracting business is a potential customer of Equipment Leasing Company, LLC. When marketing the Company’s operations within the Omaha market, the following demographic profile will be used:
• Annual revenues in excess of $500,000
• Will spend $600 to $1,000 per day on rentals with the business
• Operates within 50 miles of the Company’s lot location
Here you can indicate specific attributes of your market including the number of construction firms in operation, the number of farms, population density, and the ongoing growth of your local/regional market’s economy.
4.4 Competition
The business will face ongoing competition from other companies in the Omaha market as it expands. Equipment Leasing Company, LLC will maintain a competitive advantage given the highly controllable operating costs that the business will employ in all facets of its operation. This will allow the business to remain pricing competitive at all times. Additionally, the Company will continue to source new inventories of equipment on an ongoing basis so that customers can use the business as an end-to-end solution for their machinery rental/leasing needs.
5.0 Marketing Plan
Equipment Leasing Company, LLC will use a number of marketing strategies in order to develop ongoing relationships with construction and agricultural enterprises throughout the greater Omaha market area. Once these ongoing relationships are developed, the business will be able to take a more measured approach to its marketing.
5.1 Marketing Objectives
• Implement direct outreach programs among the targeted demographics.
• Use social media marketing with a focus on LinkedIn when targeted construction firms in Omaha.
• Advertising among trade journals that are circulated throughout the target market.
5.2 Marketing Strategies
Given the unique nature of what Equipment Leasing Company offers, the business will use a highly targeted marketing campaign that focuses on the needs of construction firms, contractors, farmers, and agricultural enterprises throughout Omaha. The business will distribute mailed advertisements that showcase the machinery that is available for rent and lease as well as the initial pricing. The Company will allocate 25% of its first year’s marketing budget towards these operations.
The business will maintain an expansive online presence that showcases all inventories carried, pricing, and relevant information about Equipment Leasing Company. This website will undergo regional search engine optimization specific for the Omaha market. The Company will have its retained web development firm provide this service. As the Company adds new equipment to its inventories, the business will update the website accordingly.
In regards to social media, the Company will focus these efforts on LinkedIn. On this platform, Equipment Leasing Company will use targeted advertising among people that indicates that they are involved in the field of construction. The business will also maintain a presence on Facebook and Instagram to showcase images of the Company’s equipment inventories.
The Company will also place out advertisements among regional trade journals specific for the construction and contracting industry. The Owner will become a member of numerous trades associations and organizations in this market.
5.3 Revenue Overview
6.0 Organizational Plan and Personnel Summary
6.1 Corporate Organization
6.2 Payroll
7.0 Financial Plan
7.1 Underlying Assumptions
• Equipment Leasing Company, LLC will acquire $3,000,000 carrying a 10-year term and an 8% interest rate.
• Peter Jackson will contribute $500,000 towards the venture.
7.2 Sensitivity Analysis
The Company’s revenues are only modestly sensitive to negative changes in the economy. The demand for cost effective access to heavy machine and equipment remains strong in any economic climate. The business will reduce its operational risks by providing equipment specific for agricultural enterprises as well. Equipment Leasing Company, LLC will have highly controllable underlying operating costs.
7.3 Source of Funds
7.4 Profit and Loss Statement
7.5 Cash Flow Analysis
7.6 Balance Sheet
7.7 Breakeven Analysis
7.8 Business Ratios
