So your love of sport has made you start thinking “could I make money from this?”. Or maybe you are a loving parent who has spent years buying equipment for your child and want to break even. There are a number of steps and legal considerations you need to make to turn this idea into a profitable business. It can be overwhelming, but, this article will break down all the key elements you need to start your sports equipment rental business.
Legal Considerations
Choosing a Business Structure
If you are starting out this sports equipment rental business on your own, Sole Trader is the most appropriate business structure. As a Sole Trader, you are your own boss and have full control of the business. Furthermore, Sole Traders generally have fewer reporting requirements than other structures and you can still hire employees. As the boss, however, you are responsible for all the aspects of the business including debts. To learn more about the other structures available, click here.
Registering for an ABN
An Australian Business Number (ABN) is a unique 11 digit number that people can use to identify your business. However, not all businesses need an ABN to carry on business. Although, there are multiple reasons you would need to register for an ABN. If you expect your business to reach the GST threshold in your first year, you need to register for GST. However, you can only register for GST if you have an ABN. You will also need an ABN, or be in the midst of applying for one, to register for a business name. Even if you do not need to register for ABN, they have a lot of benefits. With an ABN, your business can register for an Australian domain name and will allow people to find you on ABR Lookup. It will also help legitimise your business.
Using an Equipment Hire Agreement
A hire agreement is going to be one of the cornerstones of your business. Although it is not legally required, a hire agreement will help protect the interests of your business and minimise risk. The agreement will set out the terms and conditions of the rent of the equipment. The terms you may want to include are the length of time someone will hire the equipment and what happens if they lose or damage them. If you are unsure how to create a hire agreement, Lawpath has a document creator that will help. If you don’t feel confident afterwards that you have included everything you need, speak to one of our business lawyers.
Business Considerations
Business Plan
Having a business plan will help you decide whether your business idea will be a success or a challenge. A business plan starts out with the goal of your business and then breaks down how you intend to achieve it. A good business plan will include:
- What goods or services your business intends to offer
- What your current marketing plan is
- The financial projections of your business
Furthermore, your business may need help from investors to get off the ground. Having a business plan will show investors how your idea can be beneficial for them to invest in.
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Get startedPlace of Business
When operating a sports equipment rental business, you will often be meeting with customers face to face. As a result, your place of business should fulfil two purposes. The first purpose is storage. You’re going to most likely have a lot of equipment. Consequently, you are going to need somewhere to store the equipment when it isn’t being rented. This is an aspect where running a business from home works. If you have a garage or sufficient space at home, your home may be suitable as a place of business. However, your place of business also needs to be presentable because potential customers may come to inspect the equipment first. That is the second purpose of the place of business, customer interaction. If you are going to run your business from home, make sure the storage system you are using looks attractive to customers. Otherwise, you may want to lease a premises instead.
Equipment
Yes, equipment is an obvious consideration when starting a sports equipment rental business. However, there are a lot of sports out there. Will your business cater to all of them? Furthermore, it is important to decide what equipment from a sport you will rent out. If your business covers soccer, will you rent out shin pads and goalie gear or just the ball? It is also important to decide the quantity of equipment you will need for your business. If you only rent out equipment for the weekend, you will gain a lot of use from a small amount of equipment. However, if you want to rent out equipment for a season, certain equipment can only be leased out to two customers a year. Afterwards, consider the financial costs of purchasing all the equipment you need.
Conclusion
To start a sports equipment business, a great first step is deciding what your business structure will be. Afterwards, think about where your place of business will be and how much equipment you will need. However, a business plan will help you outline everything you need to make your business successful. A business plan should include what exact goods or services your business intends to offer and how you are going to market them. Once you know you are serious about starting the business, have hire equipment agreements ready to protect your interests.
