“Now there’s a new group of contractors,” says Terry Dolan, founder of Never Idle, “who are putting more emphasis on equipment utilization than its availability.”
Utilization is the percent of time equipment is actually performing work. An excavator used for 40 hours out of 160 hours in a month is considered 25% utilized.
Dolan says the focus of the new business model leverages utilization against “acceptable availability,” establishing a more profitable balance between the two. “Equipment must certainly be available to keep its owner’s crews at work, but equipment sitting idle isn’t making any money. By focusing on utilization, these contractors can determine how efficiently their equipment can be best used at their own job sites yet also generate revenue for them at another job.”
One way to think of it is that the contractors turn their fleet’s excess capacity into income, using hassle-free, secure rental platforms like Never Idle to safely rent out their equipment. Never Idle handles the rental process for them – sales, marketing, negotiation, contracts, insurance, payments, shipping and maintenance.
Dolan says the concept is catching on as equipment providers realize how much they have to gain with so little risk.
“Contractors are realizing equipment is treated well while on rent,” Dolan says. “Never Idle also ensures that renters will be held responsible and have coverage for any damage while it was in their care. Since their rental income is not affected by repair costs in the long term, contractors who provide equipment stand to profit greatly.”
It’s a secure arrangement that to date has only been enjoyed by rental companies, Dolan says. “Contractors now have access to that revenue.”
Similar to a rental company, accounting for utilization is performed through the contractor’s equipment department, setting daily, weekly, and monthly rental rates.
Billing for the rental gives both the equipment manager and project manager a better appreciation of the cost of having equipment on a site. “When you rent equipment,” Dolan says, “and are paying the rental bill every month, you use that equipment more efficiently. You get it back to the rental company as soon as you can to minimize your bill.”
Dolan says, “The sharing economy is now upon us. And Never Idle will be the partner of choice for contractors who are ready to access rental income.”
To learn more about how renting out your equipment through Never Idle works, please contact us today.