3. Prepare a price list.
A price list is your guideline for any financial activity. Before compiling it, you need to (as in the story above) gather everything you have into one list.
Once you’ve identified who needs what, in what quantities, and created an offer for your audience, you can begin reviewing your existing equipment and identifying the most popular items. This category should and will be rented for the long term with the lowest monthly payment. Then, find less popular equipment and, after analyzing the previous category, calculate a shorter rental period, and therefore a higher monthly payment.
I don’t see the point in renting equipment by the day or week. If your equipment is expensive, then rent it for a shorter period; if it’s very old, then rent it for a longer period. Shorter periods mean higher payments, and vice versa. I recommend creating a price list for each piece of equipment, with monthly and yearly prices. Please also calculate the benefit already received from the equipment (i.e., depreciation) and the remaining benefit for the tenants.
I offer simple formulas for calculation.
Find out the rarity of the equipment:
Ro = Cn – Ct / 100
Find out the current value of the equipment:
St = Cn – A% * Ce
Find out how much to charge for the equipment:
Pa = St / K (365, 12, 52)
Cn – Initial purchase price of new equipment.
Ce – Equipment service life. For different calculations (daily or weekly, monthly or annual payment), you need to substitute the service life figure corresponding to the selected rental period into the formula.
A – Depreciation – on average, up to 10%, and for rehearsal spaces, from 15-20% per year of the equipment’s price.
K – Number of days, weeks, months, or years of equipment rental. Current Price – the price of this equipment in stores.
Pa – Rental Fee. Follow the same principles as for the service life.
Current Value (CV)
Ro – Equipment Rarity. If the resulting number is positive, it means the equipment is currently declining in price. If the resulting number is negative, it’s a sign that the equipment is still in demand.
If there’s no price for your equipment, or it’s not listed anywhere, it’s worth contacting a professional who specializes in your equipment and asking them for advice on the feasibility of using it. Finally, create a price list. This can be done on a phone or computer, in Excel or Word, or in another convenient way.
- Sell on mutually beneficial terms.
This is where the challenge lies, which is overcoming greed. Before concluding a deal, try to find out what the equipment will be used for (where it will be used), who will be using it, and whether they have the necessary experience, within certain limits.
If everything is fine, you can move on to discussing a reasonable price and listening to the other person. Everything here is resolved through diplomatic communication. Upon request, the lease term can be extended or shortened, and the rental fee can be raised or lowered. However, remember that the equipment has already served you well, and there’s no need to charge a very high rent (don’t forget about greed). Your goal is to rent it out for a long time and to good hands. While you master new tools and sophisticated equipment, your old equipment will tirelessly serve others. In this way, you’ll be doing two good deeds at once: helping your colleagues by offering them creative equipment and earning a little money to develop your team.
That’s all!
