Starting a tool rental business: A quick guide

Tool franchises are an enticing prospect for many would-be franchisees. Typically, they are affordable, flexible and relatively easy to manage. However, to a large extent, the success of this type of franchise still depends on the amount of support provided by the franchisor. Today, we take a closer look at starting a tool rental business and provide a guide of how to do so. Then we go on to look at three of the best tool franchise opportunities in our books at the moment.

>> Read more:

• Hammer Home The Benefits Of Starting A Tool Franchise
• Hit the Nail on the Head with Our Top Three Tool Franchises

Tool industry

Maybe you’ve always been fond of ‘do it yourself’ and want to have a go at being your own boss? Well, starting a tool franchise is a great way to do exactly that. More and more of us are opting to spend large amounts of money improving our homes rather than selling up and moving out. Therefore, home improvement is big business these days. It’s been found that the UK spends £30 billion a year (£43 million a week) on home-related projects (Office for National Statistics). As well as renting tools to homeowners, there are also plenty of commercial companies that require the services of a tool rental business. It’s been predicted that the UK construction industry is set to increase year on year, and so there is a substantial market for tool rental franchises.

Independent start up or franchise route?

There are pros and cons of both routes to business ownership and you need to consider them equally to decide which is best for you. With franchising, franchisees get the support and backing of an established brand with an existing customer base. They also generally have a higher success rate and it can be easier for franchisees to secure funding. Franchises often make it possible for franchisees to enter new sectors they have no experience in, as they can follow a tried and tested business model.

On the other hand, with an independent start-up you have more creative freedom to run the business how you like. With a franchise, the franchisor is ultimately in control of operational processes and making important decisions that affect the future of the business. Also, when running an independent start-up business, you don’t have to pay an ongoing royalty fee to the franchisor like franchisees have to.

This quick comparison only just scrapes the surface of the advantages and disadvantages of franchising and independent start-up businesses. To find out more, see another one of our articles here.

Starting a tool rental business: a quick guide

• Conduct market research. Chat to local construction companies and ask them what sort of equipment they would want to hire. Is there a certain brand they prefer? Would they want to rent basic or high-end equipment?
• Select your product range carefully. The equipment you buy will be one of your largest investments, so you need to find the best deal possible. Don’t spend lots of cash on high-end equipment if your customers want budget equipment. Consider buying second-hand equipment to save even more money and invest in other areas of your business.
• Make long-lasting relationships with customers and partnerships with other businesses. Renting tools is a repeat business, so be sure customers come back to you rather than your competitors. You could achieve this by providing them with advice, offering discounts, creating a simple, stress-free experience, doing them favours etc.

Here, we take a look at three of the most appealing franchise prospects in the tool and hardware industries.

UK tool franchise opportunities

Mac Tools

Mac Tools has a long history in both the UK and US. Originally founded in 1938 in Ohio, USA, the franchise quickly expanded across the country and made the move to the UK in 1960. The franchise now boasts 170 units and has worked hard to refine its business model to ensure that franchisees the world over can benefit from the Mac Tools brand.

Mac Tools specialises in selling high-quality tools to business and individuals around the UK. Franchisees will visit garages, dealerships and engineering units with a mobile showroom, selling equipment to a wide array of customers in an exclusive territory.

What level of investment is required?

Mac Tools is considered one of the most affordable franchises in the hardware industry. With a franchise fee of just £5,000, there are few barriers to entry and franchisees can quickly begin turning a profit. A total investment of £50,000 is likely to be required to cover all the necessary start-up costs. This includes the cost of your van, tools, equipment and training, among other things. As Mac Tools is a reputable franchise with a large number of existing franchisees, it is possible to borrow a significant portion of the initial investment required. Many major lenders will be comfortable lending around 70 percent of the investment to franchisees with a good credit history, who are in a stable and suitable financial situation.

What do franchisees receive in return for their investment?

In return for the investment, franchisees are granted the right to trade under the Mac Tools name and brand, as well as the Mac Tools van and all the stock you'll need to get you started. Every franchisee is enrolled on a two-week residential training course that encompasses product knowledge, business management, sales techniques and getting to grips with your digital systems. Ongoing guidance and support is available from a number of sources and regular networking events are organised.

Mr Arkwright’s Tool Emporium

If you’re looking for a tool franchise that’s a little bit different, Mr Arkwright’s may be the perfect business for you. Launched in 2012, the franchise benefits from a unique branding and has managed to capitalise on its distinctive look and feel by opening a number of new shops. The business specialises in DIY and household tools that cater to both amateur enthusiasts and professional builders. With a product range that includes tools, garden equipment, homeware and furniture, it benefits from maintaining a large stock and attracting a diverse array of customers.

What level of investment is required?

In order to become a Mr Arkwright’s franchisee, you’ll need to raise an initial investment ranging from £45,000 to £80,000. The precise amount will depend on your location and the size of your shop. This price includes the franchise fee, licence fee and all start-up costs associated with opening a new business. In many cases, franchisees will be able to borrow a significant portion from traditional lenders.

What do franchisees receive in return for their investment?

In return for your investment, you’ll receive help finding a location, a full shop-fitting and all the digital systems you need to run the business efficiently. You’ll be enrolled on a comprehensive training scheme, where you’ll develop your marketing, sales and management techniques. The central franchising team also provides ongoing support and guidance and advertises all new franchises extensively. The relatively low start-up costs, coupled with the amount of assistance franchisees receive, makes Mr Arkwright’s Tool Emporium one of the most exciting franchise business opportunities out there.

Snap-On

Snap-On began life as an American tool manufacturer and famously developed a unique product based around 10 ‘snap-on' socket heads that could be used with a number of different handles. The company was founded in 1920, though it took 45 years for it to reach the UK. Established in the UK in 1965, they had managed to attract over 100 UK franchisees by the mid-70s. Today, this has grown to 430 franchisees across the UK and Ireland.

Snap-On specialises in delivering new and innovative tools and equipment to those businesses that need them. Whether it's a garage, showroom or body workshop, Snap-On is able to supply the necessary tools to ensure the smooth running of many a business.

What level of investment is required?

If you're considering becoming a franchisee, you'll need to raise an initial investment of £24,143 and then Snap-On will fund the remaining investment on a 10-year, interest-bearing loan. By making fixed, regular payments, franchisees can manage their cash flow easily and be comfortable and confident with their financial position.

What do franchisees receive in return for their investment?

All franchisees attend a training course at the UK head office in Kettering. This ensures that you understand how to operate the Snap-On business model and provides you with all the skills necessary to sell your products and grow your business. Regular networking events are organised by the franchisor and there are regional sales specialists on hand to help you develop your skills.

Conclusion

Within the tool and hardware industry, there are a number of excellent investment opportunities for anyone looking to open their own franchise. The three we’ve highlighted are all relatively low-cost and showcase excellent growth potential. While Snap-On and Mac Tools are both van-based franchises, Mr Arkwright’s Tool Emporium is an exciting store-based franchise. All three franchisors offer extensive support and should provide you with everything you need to succeed in the industry.