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Pick a niche you can serve well
“Tool hire” covers everything from a carpet cleaner for a weekend to a breaker for a groundworks crew. The two customers want different kit, different hire periods and different service. Decide who you’re for first: trades, households, or both.
Look at what’s already on offer within a sensible delivery radius. Search the way a customer would, on a phone, and note who shows prices, who lets you book online and who only offers “call for a quote”. Gaps in that list are your opening.
Start narrow. A small range you can always deliver on time beats a big catalogue with half of it out for repair.
Set up the business and sort VAT
Choose a structure (sole trader or limited company), open a business bank account and keep hire income separate from day one. An accountant who already works with hire or plant businesses will save you more than they cost.
VAT matters early in hire. You must register once your taxable turnover goes over £90,000 in the last 12 months, or if you expect it to go over £90,000 in the next 30 days, and GOV.UK lists goods you hire out as part of taxable turnover. You can also register voluntarily below the threshold. Trade customers can usually reclaim VAT, so many hire firms register early; households can’t, so price with both in mind.
Get the right insurance
Employers’ liability insurance is a legal requirement as soon as you employ anyone. Public liability cover is close to essential if your kit goes onto other people’s sites and homes.
You’ll also want cover for the equipment itself while it’s on hire, in your yard and in your vans. Hire has its own risks (kit that isn’t returned, damage on site, theft from vans), so use a broker who insures other hire companies and ask exactly what happens when a customer damages or keeps a machine.
Know your safety duties: inspection, PAT and LOLER
If you hire out equipment for use at work, HSE treats you as a supplier under section 6 of the Health and Safety at Work etc. Act. That means pre-hire testing and inspection, so far as reasonably practicable, and giving customers the information they need to use the kit safely.
Portable appliance testing (PAT) isn’t a legal requirement in itself, but HSE strongly recommends that tool hire businesses formally inspect and test electrical equipment before each hire. In practice, every electric tool should go out with a recent inspection and test on record.
Lifting equipment falls under LOLER. Unless a competent person has drawn up an examination scheme with other intervals, equipment used to lift people (and all lifting accessories) needs a thorough examination at least every 6 months, and other lifting equipment at least every 12 months. Lifting equipment shouldn’t leave your depot without evidence of its last thorough examination.
Keep the records together and easy to find. When a customer or an inspector asks for a certificate, you want to answer in seconds, not search a filing cabinet.
Build your first fleet around utilisation
The kit that earns is the kit that’s out on hire most of the time, not the kit with the biggest day rate. Favour durable, high-demand items your chosen customers ask for every week, and add specialist machines once you can see demand for them.
Buying used can make sense, but only with service history and, for lifting equipment, examination records. Budget for spares, consumables and repairs from the start.
Cross-hiring from other hire companies lets you say yes to a job before you own the machine. It’s a cheap way to test demand before you buy, as long as your price covers the cross-hire cost and the delivery.
Set prices, hire terms and damage rules
Most hire firms price by day, weekend and week, with a lower rate per day for longer hires. Work out delivery and collection charges at the same time, because a cheap hire rate with a surprise delivery charge loses customers at checkout.
Trade customers usually think in prices excluding VAT and households in prices including VAT, so be clear which you’re showing and let people switch if you serve both.
Write hire terms that cover late returns, cleaning, fuel, loss and damage, and decide early whether you take deposits, offer a damage waiver, or both. When you hire to consumers, the Consumer Rights Act 2015 applies, so have a solicitor check your terms before you rely on them.
Let customers book and pay online
Customers compare hire firms on their phones, often outside office hours. A site that shows real prices and live availability, takes payment and books delivery or collection will win jobs that a phone number and a contact form won’t.
Set up a Google Business Profile for your depot too, so local searches can find you, and ask happy customers for reviews from the start.
RiQ (pronounced “Rick”) is hire software built by people who run hire operations. It’s fully cloud-based, with nothing to install on your premises, and your storefront runs on your own domain with your own branding. RiQ is waitlist-only for now and onboarding in stages, tool and plant first.
Your pre-launch checklist
Before the first hire goes out, check you have: a clear customer niche and delivery area; your business structure, bank account and a view on VAT; employers’ liability (if you have staff), public liability and equipment cover; an inspection and PAT routine, plus LOLER examinations for any lifting equipment; a starter fleet with records; day, weekend and week rates with delivery prices; hire terms checked by a solicitor; and a way for customers to book and pay online.