Tips for Starting a Rental Side Business

M

mikeshu

Well-known member
Hi guys, haven't posted here in like... forever.

Anyway, I was wondering if anybody has any business tips for starting a rental side business. We were thinking about renting our additional DSLR bodies, bartech remote follow focus, shoulder rigs, etc when they aren't in use. How does one take care of the business end of rental contracts, insurance, security deposits and such that it eats up minimal time from our main work?

Any tips would be awesome. Thanks!
 
Tip One - Talk to an accountant.

Tip Two - Talk to an attorney, preferably one with lots of tax experience.

Tip Three - Consult with your insurance agent.

Tip Four - Check out all of your regional competition.

Tip Five - Give up on the idea; running a business, however "small" you believe it to be, takes a lot of work. Unless you really love what you're doing it's really not worth the hassle. I HATE taking care of the business side of my business. It's at least an hour every day, often a lot more; it's the price I have to pay because I love what I do.
 
Haha, thanks for the tips, Bob!

I run a small company and totally know the pains. I was thinking of renting out the gear and not making a big thing out of it nor marketing it heavily. So the gear can generate some income in between projects.

Have you ever done rentals of your equipment?
 
I did at one point. People don't respect the gear because it's not theirs and treat it poorly. Even people who you thought were your friends. Nothing like getting back gear from a rental you need for a shoot only to find it's screwed up, after the renters have beat you down on the rental price. Even if it's insured, you then have a wait time while it's repaired or replaced.
 
Here in the UK, the stumbling block for a non-full time hire business is insurance. You obviously don't want to have 12 month insurance for the occasional hires, but short term hire insurance is really expensive, because they see it as much higher risk. We actually stopped doing short term hire to anyone we don't know, and trust to have their own insurance. Strangers you don't know mean higher risk of running off, let alone damage - and the insurance companies view it exactly the same, as in you only insure when there is risk, so they don't wish to risk it! If you can do lots of business, then the fact you have kit in store, but insured and very low risk balances it out - but for us hire insurance was simply uneconomic, and without it, too risky to jeopardise our core business.
 
It's an insurance problem here too. My insurance company, when I talked about it with the, worries about liability especially. However, I have some people I have shot projects with who sometimes rent things, like a pair of Divas for and interview shoot. I have an agreement that they have to sign indemnifying me but still, it won't hold. I mostly rent to them as friends and I make a few bucks on the pass through. It's all rather informal and I do it rarely and I won't rent camera or lenses or sound. Usually I say, hire me, I'm cheap enough ;)

On their end they are willing to rent what I have and the accessories I have. That's abnormal. Usually people rent because they can get whatever they need, not what you have.
 
David's comment above is so true - I think most owner operators take great care with their kit, because their hard earned money paid for it. Look at any hire kit from a facilities house and the condition is so much more variable. It really shows the difference between the good makes and the cheaper ones. I'm looking at a 30 foot trailer filled with dead flight cases - the kit is mostly serviceable, but despite being quite 'young'. looks old. I know that a couple of expensive hire items have failed, and the lighting crew have them back in their cases - the faults are quite minor, but annoying enough that we swapped them out, but I know that when they're returned the hire company will probably plug them in, light comes out, and they put them back into stock - without discovering the problems.

I own some lighting control equipment - a brand popular here in the UK - MagicQ. Initially I was going to hire them out when I wasn't using them - perhaps 6 months a year. The insurance, and potential heavy handedness put me off - what we did do is set up a network of owner ops and we do lots of sub hires and swaps between like minded people - which gives us all access to different items. A few members will hire to anyone, but almost all the individuals won't - when the phone rings we say know, if they are not known to us. You can see how it works http://www.magicq-hire.com here. Maybe you could do something similar?
 
Yeah, the insurance is what would scare me. When I insured my gear I asked about the possibility of renting it out and the difference in cost between the insurance for my personal use of the gear and covering as rental gear was pretty significant. I went with coverage that only covered damage or loss when the gear was in my possession (Or in storage or transit) not for renting it out. I do have a rider that covers when I rent other gear, but it only covers a small dollar amount and is a big chunk of the total premium.
 
Hey Guys!

Thanks so much for the thoughts. Yes, that was one of my main concerns as well (insurance). I was thinking of mostly requiring renters to have their own insurance policy (or production insurance) that can add me as an additionally insured as well. Has anybody played it that way?

I'm mostly planning to rent out my non-prized gear. Definitely not renting out my C100 but the following:
-5D Mark II
-5D Mark III
-60D
-Redrock Micro Follow Focus
-Redrock Micro Shoulder Mount
-Bartech Follow Focus
-Monopods
-Tripods

I may add an Atomos Ninja 2 to the mix when I feel it's a good time.

You think the above would be appealing to anybody, honestly?
 
I'd be curious as to what you find out about that. That's the way it usually goes, that the renter has liability and equipment renter's insurance. It's expensive for the renter and is the reason some of my friends want to rent what I have.

If they are budgeted well enough to carry that insurance, then their projects will probably bear the cost of renting from a rental house that can provide services and a breath of options that you won't be able to. I bet you'd get a lot of interest in that Bartech ;)
 
If they are not serious enough to hire their own insurance, do you really want to rent to them? Do you trust how they will treat your gear or if you'll even ever see it again?

I've given this advice many times on this and other forums: Don't go into the business of renting out gear unless you want to be in the business of renting out gear. The only way to make it worthwhile is to do it on an active enough basis that it generates some real income, and that means you will need to devote a considerable amount of time on it. When your gear goes out you will need to prep it. When it comes back you will need to scour through it to make sure that everything is functioning properly and nothing is missing. You will lose things and nothing will be put back where it is supposed to go. They will lose lens caps, plastic memory card holders, filter pouches, etc. That's if you're lucky. You will also need to take deposits on rentals and should probably set up a way to accept credit cards (easy to do nowadays thanks to the internet). This way when they keep the gear an extra day (and they will), you can charge them without having to fight or beg to get the money. You will need to do proper accounting of the costs & income for your taxes. It's all a lot of work.

Take this from a guy who owned an Aaton film package and several different video kits as well as lighting, jibs and other gear over the years. It is possible to make some additional income but you will have to work for it. The money doesn't just find its way into your pocket. Also remember that the only reason people will come to you rather than a proper rental facility is because they want the gear for cheap. So think about that type of client and then decide if that's who you really want to deal with and have handling your equipment.
 
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