Start a Trailer Rental Business

A trailer rental business hires out various different types of trailers usually for a day at a time.

Market Need
Many people and businesses will need a trailer some or other time to move large and bulky items that won’t fit in their vehicle, they may not need it enough to warrant purchasing their own one or they may not be able to afford one so they will rent it for the day.

Once you have identified a need, you are going to look at how to address that need which is usually what you would call your business model. We’ve established that we are going to rent out trailers by the day but so are many other companies, what is the overall strategy that you will use in light of numerous competitors (at least in urban areas).

Once you have decided that trailer rental ticks all the right boxes for you, in the hiring business that would mean enough demand, breaking even in a reasonable time, sustainable and viable within its scope (the yard space required to store a trailer is small enough to make this viable for small businesses compared to the outlay of space required for say shipping containers).

There are a few ways that you can look at this, your business plan will have the following components that can be used to build your strategy:

Your Solution (product or service offering that addresses the market need) / Competition / Target Market

You can start at anyone and say:

There are various types of trailers:

  • Small and big mesh trailers
  • Small and large closed trailers
  • Car trailers
  • Livestock trailers
  • Luggage trailers
  • Utility trailers
  • Advertising trailers
  • Food trailers

What are these trailers commonly used for, you can then ask who has a need for these trailers, you can categorise this at its topmost level: consumer or business:

Consumers: doing DIY moving, clearing out or going on holiday

Business use:
Moving companies that need extra capacity
Rubble removal, clearing out, gardening
Farmers or abattoirs
Mechanics or panel beaters (far cheaper than a tow truck and less hassle than using a car)

Or you can start at the target market to determine what kind of trailers they will need

(Target Market)
There are various needs for trailers
Farmers to move animals
Mechanics to move cars

Or you can look at the competition within your area and see if there is a gap in the market, just remember just because someone else is not doing it does not mean there is a (big enough) market for it to make it viable and just because someone else is already doing it does not mean there is no market, the market might be big enough for enough player or two players (as most markets are).

A different business model
When we think trailer rental we think of daily rentals but there is an opportunity for longer rentals (at lower daily rates). For example, advertising trailers is not a daily thing that banner is expensive to print so it will be for weeks if not months, another trailer that can be rented out for longer periods is the luggage trailer for people going on holiday. There might also be a business for weekly rentals aimed at moving companies especially if you have excess stock a stable customer at a lower cost might still bring in more money than renting it for only one or two days in the week.

Remember: in some areas, there might not be enough of a market due to a lot of existing and well-established competition or simply no need and it will be better to maybe look at another business.

Hyperlocal small trailer rental businesses
Traditionally trailer rental businesses operated at scale in big yards with many available. We have seen smaller operators pop up with far fewer trailers that operate it as a parallel or side business. There are two such single-owner businesses I know of in Cape Town’s northern suburbs, one doing mesh trailers the other doing luggage trailers. This is essentially a neighbourhood business, most of the clients are from the local area. How lucrative this is, I don’t know but usually the owner has another business he is operating from the premises. It does make sense like in my area both the trailer rental guy and the municipal dump is close to each other, if I need a trailer to remove dirt it makes sense to go to him than to go to a big trailer rental company many kilometres away stand in a line and fill in long forms when I can just go down the road.

How many trailers do you need?
When you assess the income potential of a business there are various parameters depending on the type of business and scale accordingly. Luckily this business is straightforward no need to factor in hourly income per quantity, it is simply one trailer per day. If a trailer rents for R500 a day and you have 2 then your potential is R1000 a day, all you need to do is find two people to rent it a day.

When you consider what trailers are being rented for which is R200 – R600 a day depending on type and size there is some potential for small businesses (at least those not living above their means).

South Africa being South Africa there are a few things that these guys usually ask for a copy of drivers license or ID, proof of address, deposit etc. So you might want to ask for those things. There are two more important things: insurance and fines. Is insurance included or an added extra, an added extra can be an extra source of income, because if they don’t take it you still have their deposit if something goes wrong (assuming you are insured or it is sufficient to cover the damages).

As for who is liable for traffic fines (something that can wipe out that days profit), remember the rear number plate of the towing vehicle is obstructed by the trailer being towed, from the back the camera would then capture the number plate of the trailer and send the trailer company the fine. While it may seem common sense that a trailer is not capable of propelling itself without being towed by the vehicle that is committing the transgression who in turn should be liable for the fine but when you have someone like Fikile Mbalula as transport minister common sense is a Western concept,  trailer companies took the minister to court and won at the high court, and won again at the Supreme Court of Appeal when the government appealed the high court judgement. So there is legal precedent that trailer companies are not liable for fines.

We’ve looked at the rental and hiring business many times before. From pool tables to temporary fences to stages,  photo booths, tents and marquees, catering hiring to wedding dresses, to shipping containers, caravans, cars and even entertainment like mini-golf and slot cars and generators and invertors.

Image credit: ramirezjunkremovalservices