The equipment leasing business in Nigeria is a very lucrative one. Ranging from construction equipment to electricity generators, farm tools, and much more, a lot of people have decided to act quickly, take advantage of the equipment leasing industry, and make as much revenue as possible from the sector.
When people get government contracts to construct roads and more, they lease equipment for the job since buying the equipment could cost tens or hundreds of millions of Naira.
For instance, to lease an excavator, they could pay 150,000 Naira daily to the company it was leased from and they could pay over a million naira daily to the company a crane was leased from.
In the area of electricity generators, a 100kva generator could cost 130,000 Naira a day to lease, and with the growing number of events daily, more people are leasing standby generators on a regular basis.
How To Start An Equipment Leasing Business In Nigeria: Guide
1). Decide What Type Of Equipment Leasing Business You Want To Start:
There are many types of equipment leasing businesses ranging from construction equipment leasing to generator rentals, farm equipment leasing, computer equipment leasing, and much more.
To choose which equipment leasing business you want to start up, carry out an in-depth market research to first understand the market, pricing structure, and more. With this information in hand, you can choose which equipment leasing business is best for you to startup.
From experience, generator rentals for events and construction equipment rentals are two of the most profitable equipment rental businesses to start up in Nigeria because leasing a 100kva generator for one day could cost up to 130,000 Naira and leasing an Excavator could cost the same range, with cranes even costing over a million Naira a day to lease.
Within the generator rentals business for events and general backup power, you could also lease out mobile air conditioners and hiabs.
If you don’t have the finance to purchase the equipment, you can start out as a broker and get a commission on every successful rental that is paid for.
2). Purchase The Required Equipment:
The next step is to go on to purchase the required equipment you intend to lease. You need to buy the most demanded equipment so that your money is used in the most cost-effective way possible.
For construction, an excavator is pretty much the most important equipment to buy. It gets leased the most and you’d get paid between 120,000 to 180,000 Naira a day for it. Over time you can go on to buy a low bed for transporting equipment and also for rentals, a swamp buggy, a bull dozer, a crane, and much more.
For generator rentals, you need a 100KVA and 200KVA generator. Some clients may request for a 300KVA, 400KVA, or 500KVA generator, which warrant far higher payments. But the two most important sizes to buy are the 100KVA and 200KVA generators.
For other equipment, you should determine the most demanded equipment in their class and first purchase them, before going on to buy others.
These two examples above have shown that the equipment leasing business is a multi-million Naira industry, and taking advantage of it is a smart move for any business savvy entrepreneur in Nigeria to make.