“ Hire it out ” is a company prosecuting in leasing building equipment machines, it will be runing concern from Faridabad ( Haryana, India ) . The company will be operated by a male parent and a boy, Mr. Jai Raj Sharma and Mr. Ishan Sharma. We will be the first one to get down leasing building equipment machines in a northern India ; this will be conveying an chance for company to work the market and to be a market leader. “ Hire it out ” will be runing concern on the no frill scheme to pull clients from all the sections of the industry. The mark clients of the company will be from power, thermic, substructure and rail sector. The concern will be sustainable and profitable because of the big demographic and substructure growing in India. In a study issued by Government Of India, it is mentioned that Construction Equipment fabrication sector is lending 8.5 % to the GDP of India and which will be increasing its part from twelvemonth to twelvemonth footing ( Business maps of India, 2009 ) . With the increasing part of building equipment sector it ‘s been predicted by the “ Foundation of Indian trade name equity ” that the lease of building equipments will be increasing its part from 2 % in the twelvemonth 2001 to the 9 % by the terminal of the twelvemonth 2010 ( Vimarsh Bajpai, 2008 ) . The industry in which the company will be traveling to run is extremely financed and benefited by the authorities in footings of the subsidy and commercial revenue enhancement construction. “ Hire it out ” will be holding a extremely skilled direction which will be holding disposal cognition, industry intensive cognition with a blend of experience in market research. The company will be located in an industrial zone. The nucleus scheme of the company will be to add on the assortment of equipments so as to be a measure in front from the rivals.
Hire it out has a certain ends, which we want to accomplish in the coming old ages. These are as follows:
Making consciousness about our services.
Making a immense client base.
To get down generating net income and get down spread outing concern from local community to national community.
Introduction of new equipments and conveying assortment of trade names with coevals of net income.
But the premier purpose of my concern will be to make a trade name image, which should be synonymous to the quality
“ Hire it out ” vision is to function national community in the hereafter with portfolio of spread outing concern from equipment lease to audience and eventually to the maintaince with a bulk of the market portion.
1.3 Business ownership
The concern will be a joint venture between me and my male parent. We will be holding equal portions in the concern.
1.4 Key plus of the concern
The cardinal plus of the concern will be my co-owner ; he has a maestro ‘s grade in Mechanical Engineering with an experience of 30 old ages in building equipment industry. His experience and presence in the equipment industry will assist the concern in making a immense client base. Furthermore his technological accomplishments will besides assist the concern in conveying down the operation cost in footings of the maintaince cost and audience cost, otherwise which would hold been hired by the concern for the counsel.
2.0 Company Overview
“ Hire it out ” will be fundamentally involved in giving building equipments on rent. The concern will be fundamentally affecting machines like forklifts, vibrator roller tower Cranes and excavators. We will be purchasing these machines on the footing of their lastingness, efficiency and the after gross revenues service. The pick for the trade name of equipment will be wholly on the footing of a client position, which will be decided through a study via questionnaire.
The concern will be operated from the two distant topographic points one will be the caput office and other will be the garage. The caput office will be covering will all the clients, where as the garage will merely for the intent of the fix and for the bringing work. The office and the garage will be on the rental to cut down the fixed disbursal. The concern services will be available 24 hours throughout the twelvemonth, as the equipments are required for a longer continuance for maintaince and for edifice intents. “ Hire it out ” will be using five employees from the local country and will be positioning them in assorted land floor responsibilities. The company will be lending at local degree, as it will be using local people and the grosss generated from the concern will be within the local community.
“ Hire it out ” will be runing from an industrial country in Faridabad. The biggest advantage of the location is that it is on the fringe of the three metropolitan metropoliss, which would assist the company in supplying services better and faster. The location besides provides touchable ( inexpensive labor, power and logistic cost ) and intangible benefits ( good jurisprudence and order state of affairs, favourable jurisprudence and order state of affairs ) which play an of import function in puting up of a concern ( Haryana Government, 2008 ) .
Furthermore the location of the concern site is good connected with all the major roads taking to metropolitan metropolis.
3.0 Industry analysis
The building equipment rental industry in India is a competitory industry though it is at an embryologic phase. As per the study conducted by the taking car magazine, it predicts that there is a plentifulness of room for other investors to put in this industry as assorted development plan are been carried throughout the state for illustration main road undertakings in northern India, Common wealth games in the twelvemonth 2010 and power works buildings in southern India, which will necessitate equipments to be hired on rent ( Abhishiek Parekh, 2007 ) . The industry is besides a big beginning of employment, it employs about 2 million people and it is forecast that it will be using another 3 million people by the terminal of twelvemonth 2015 ( Vimarsh Bajpai, 2008 ) . The industry is so far non organized merely one 4th of the sector is organized where as remainder of the part is still need to be organized. The industry boulder clay day of the month has merely two major contractors leasing equipments on rent ; they are “ Quippo rental service ” runing from Kolkata and “ Sanghvi Movers ” operating from Pune. Till day of the month, there is no international house leasing equipments on rent in India. The industry besides accommodates assorted little graduated table contractors leasing equipment on rent but they are non employed on a commercial graduated table. The equipment lease sector has figure of hurdlings to be crossed as they do non hold any support so far from the Government in footings of the environmental policy and structural support. The industry is still turning without any support from Government ( India Mart, 2003 ) .
3.1 Tendencies in the industry
In the approaching hereafter the industry has a positive chance as it is bring oning major participants like JCB India, Volvo and Tata to come in this field, which so far are indulge in fabricating these machines. But there is a quandary for them to come in equipment rental industry as they do non desire themselves to be viing with their ain clients ( The Hindu, 2008 ) .
The industry follows a simple tendency ; they give equipments on rent for months to old ages depending upon the continuance of the undertakings and its requirement. The continuance of charter can change from hours to a twenty-four hours as per the demand. The industry has a really unusual tendency that the bigger equipments are taken on a charter for a long continuance of a clip as compared to the little equipments which are merely hired for a hr or a twenty-four hours. As in India there is an infrastructural development traveling on, it requires large equipments like tower Crane in comparing to the little equipments which are merely required for the intent for the maintaince ( Abhishiek Parekh, 2007 ) .
3.2 Opportunities in rental equipment industry
There is batch of chance in this sector to stand out, as the present scenario is back uping the investors to put in the equipment lease concern because of the low involvement rates and fiscal support offered by the Government, which will assist to set up the concern. Furthermore with the current roar in the excavation industry there is a liner growing in the equipment rental concern. Furthermore with the formation of united “ Rental Association of India ” there is an organized construction which is regulating for the rights and benefits of the industry from the authorities, this will convey an chance to make concern ( Rajiv Sethi, 2009 ) . Harmonizing to the study there is a immense deficit of building equipments to be rented, which has resulted in a high hiring monetary value and which has hooted up the equipment rental market by 30 % and this has generated batch of gross for illustration L & A ; T is engaging building equipments and is paying 25 crores a twelvemonth, so it is a good chance to indulge in this concern ( Shilpa Shree, 2007 ) .
Soon two houses are runing within India but from the distant topographic points. One is “ Quippo rental service ” runing from Kolkata, eastern portion of India, who are indulge in leasing machines merely for the intent of edifice ( towers, promenades etc ) that to in their ain native topographic point. The other house is “ Sanghvi Movers ” operating from Pune ; cardinal portion of India, they are fundamentally employed in leasing machines merely for the main roads undertaking ( Rajiv Sethi, 2009 ) .
In Faridabad there is no menace of competition from any of the major rival as the market is excessively large and which is in demand to be nurtured. Furthermore in northern India there is no steadfast indulge in giving building equipments on rent. In northern India the market is still non maturate in footings of the client and the demands, so it provides me an chance more than a menace or competition.
4.0 Products and Services
“ Hire it out ” will be involved in giving little every bit good as large equipments on rent for the maintaince and building intent. The merchandises offer for the rent will be ;
The services provided by the company will be picking and dropping up installation of equipments from the site without bear downing any money with the insurance screen if there is any harm at the site.
4.2 Future merchandises
With the growing in the concern, “ Hire it out ” will increase the scope of equipments from rock cutting equipment to skid tip stevedores and will convey in the trade names like caterpillar and komatsu.
4.3 Unique selling proposition of the merchandise
The alone merchandising proposition of company ( merchandise ) will be the faster, cheaper and better services with no extra cost or mulct for detaining in bringing of rented equipments. We will be supplying free of cost mechanical helper if the machines interruptions down at the site. Furthermore we will be supplying the corporate price reductions to our full loyal client to retain them. In add-on to this we will besides be supplying the trained operators which would increase the efficiency of the operation and will cut down the lead clip which leads to high cost, this will be the exclusive factor which will actuate the consumers to choose for taking machines on rent
4.4 Competitive border
Hire it out will be holding advantage in footings of the new efficient machines, which would be latest in engineering and this would be adding differential advantage to company over its rivals. Furthermore company will non be bear downing for the enrollment which other rivals charge and company would be supplying installation of toll free aid, which no 1 so far has practiced in equipment rental industry in India ( India Mart, 2003 ) .. The co-owner of the concern will be giving free audience to the consumers sing the proficient facet of the work ; this would convey an excess border to our concern.
5.0 Market research and possible market Growth
In a study conducted in the twelvemonth 2007, it was recorded that the building equipment rental industry had a market portion of merely 7 % of the entire equipment industry. It is predicted that it will lift to 9 % by the terminal of the twelvemonth 2010.
In a study issued form the Mckinsey in the twelvemonth 2009 it was pointed out that the ratio of the organized equipment lease concern to unorganised equipment lease concern is 70:30 and in future the ratio of organized sector is expect to increase by 90:10 with the formation of “ Rental association of India ” ( R.S Desai, 2009 ) . The market portion of the Quippo rental service is around 55-60 % where as Sanghvi Movers has a market portion of 30 % , where as remainder of the portion is distributed among the unorganised sector, which so far has non registered to the “ Rental association of India ” .
The study conducted by the Mckinsey differentiated the industry as per there demands of the building equipment machines in footings of the per centum. It was recorded that the power sector tops in the list of engaging machines, they hire 41 % of the machines and second in the list is wind energy sector, which hires 19 % of the machines. They are accompanied by the cement industry which has a hiring portion of 12 % and steel industry with a engaging portion of 10 % . It is noticed that with the building of the tube rail undertakings in India this sector has besides started engaging machines with the mighty portion of 4 % and remainder of portion 6 % are hired for little intents like maintaince and assorted plants ( R.S Desai, 2009 ) .
Whereas the possible growing of building equipment lease is concerned, it will increase its gross from the twelvemonth to twelvemonth footing. It is recorded that the building equipment rental industry is deserving $ 2.3 billion in the twelvemonth 2009 and it is expected to turn six times in comparing to the bing worth of $ 2.3 billion to $ 13-14 billion by the terminal of the twelvemonth 2014 ( Murray Pollok, 2009 ) .
5.1 Penetration parametric quantity
The system for supervising growing in market incursion is wholly based on the two parametric quantities. These are province of economic system and the current infrastructural development. Indian economic system is straight related to the growing of the equipment rental concern as it provides a beginning to perforate in the market by back uping houses, in footings of revenue enhancement benefits like RTO ( supplying same interstate revenue enhancement construction throughout all provinces in India ) and by supplying the import responsibility freedoms for building equipment. This helps in fiting the earned grosss with the assets invested in the concern. Whereas the substructure development is indirectly related as it depends upon the national market, if the market is in roar Numberss of machines will be hired, if there is a state of affairs like recession the hiring of equipments comes to hold. It besides depends upon the planetary market ( KRC, 2007 ) .
The demand in the market can be modulated by our concern by taking an advantage of the joint confederations with the industries of the building equipment machines. Who will be proposing our name in the market as we will be purchasing machines from them. It will be a two manner communicating channel ; we will purchasing their merchandises and at the same clip will be advancing their trade name in the market. On other manus they will be making word of oral cavity publicity to their clients for our concern. This will assist out concern to intensify our roots in the market to bring forth grosss.
5.2 Market research method
The information for the primary research was collected through the questionnaire, where as some secondary informations has been used, which is collected from the authorities bureaus websites.
5.3 Questionnaire analysis
The questionnaire was prepared and was distributed to 50 people out of whom 31 people replied, it was analyzed that maximal figure of people were in the favour of engaging equipment alternatively of purchasing it and the trade name they preferred most was ACE. It was besides analyzed that all the people wanted the driver as a complimentary service without any charges.
Hire it out ” will be bear downing Rs 500 per hr for the each use of the machine, which is really less as comparison to the monetary value quoted by the rival and the monetary value quoted by the concern is competitory in footings of sustainability and profitableness.
6.1 Target clients
“ Hire it out ” in the initial stage will be merely functioning the power works in Faridabad, as there is one thermic power works, which hires bulk figure of equipments on rent and second will be the local builders, as Faridabad is traveling through the infrastructural alteration, as in future it is traveling to be an IT hub.
In the hereafter company client ‘s base will increase from local to the national degree ; company will be functioning metro rail industry, steel industry, and cement industry and weave energy sector. The company will be functioning all these industry as the financess will be more easy available with no hard currency flow jobs. Furthermore the loan taken by the concern will be paid, so it will be easy to diversify all the assets for the nurturing of new market.
6.2 Marketing scheme and execution
My concern scheme will be to add on my cognition, personal experience and a blend of marketing accomplishments to provide clients ‘ demands. So that we can be a innovator in this competitory industry and make a trade name name, which can be synonymous to building equipment rental industry.
At the present clip, selling is an of import tool. It is non merely about making a trade name image but besides about making a relationship with clients. The selling scheme of the company will consist of both these factors. It will be utilizing traditional every bit good as latest method to advertise the services. In traditional method It will take portion in the festivals, local shows and national trade carnivals like “ India trade carnival ” to demo instance the assortment of building equipment engage it out has, will besides convey in the usage of magnetic spines which can be placed on autos and trucks, will besides utilize concern cards. “ Hire it out ” will be seting streamers, Sons and mottos throughout the town to make consciousness and to do population cognize that we are the tendency compositors in this field.
In latest method of advertisement “ Hire it out ” will be puting digital ads on coachs and trains and will besides be utilizing oral cavity of oral cavity advertisement.
To construct relationship with clients hire it out will be giving out price reduction vouchers as a wages, if the current client refers new clients to the concern. In add-on to this “ Hire it out ” will be directing clients a feedback signifier, so that they can cognize about the experience, outlooks and alterations they would wish to convey in concern.
In the initial stage of the selling, company will be concentrating more on the local community as the concern demands to be established. For this the company will depend upon the local print like local newspaper, booklets and local telecasting channels. Company will besides be utilizing direct mailing method and will direct mails to local population with price reduction vouchers.
In the progress phase of the concern, when concern starts bring forthing net income so merely company will convey in the usage of cyberspace for advertisement of the concern. As it is really expensive to purchase a sphere and to engage a web interior decorator to make a site.
6.3 Budget for the advertisement
Hire it out has a budget of Rs 100000 for the advertizement and for the publicities of its merchandises
6.4 Warranty policies
If any sort of a machine dislocation or proficient job will be at that place at the site, free helper will be given with no mulct or the charge. Unless there is a physical harm to the machine. If there will be any physical harm to the machine so the fix charges will be taken from client as per the contract guidelines.
The company will be holding no salesroom for the show of the machines, there will be a catalogue from which a client will necessitate to take a machine as per there demands. After taking the machine contract would be signed with a client adverting all the footings and status, if in a province clients returns machine prior to the deadline they will be charged excess for that, as the machine would be idle for that coveted period of clip, which would finally be loss for a company. Machines will be kept in a garage ; from there they will be straight delivered to the site mentioned by the client within the specified clip period.
7.1 Information flow
The concern fiscal will be managed by the proprietor of the concern, where as the selling and covering with the clients and authorities section will be done by the co-owner of the concern. The procedure director will be working on the direction given by the proprietors. He will be looking after the stock list and the human resource portion ; he will be the 1 who will be administering the responsibilities to the supervisor and the drivers. The job accounted on the site will be cover either by the proficient supervisor or by the procedure director. Supervisor function will be to look after the care of the machines and at the same clip leaving developing to new employees. Supervisor will be in charge for maintaining the records of the driver and doing public presentation study, which would be farther submitted to the director. Quality section will be under the surveillance of both the proprietors.
7.2 Quality control
All the services delivered to the client will be followed purely on the guidelines issued by the BISC ( Bureau of Indian Standards ) and by the council of national fabrication industry ( Nayantarra Lama, 2009 ) .
7.3 Equipments required for the efficiency of the procedure:
Garage for the maintaince work of machines.
Delivery truck- to present equipments to the site.
Inventory record system- to look after the gross revenues and the finance portion from the twenty-four hours to twenty-four hours footing.
8.0 Forces expand
The concern will be a joint venture between a boy and a male parent, Mr. Ishan and Mr. Jai raj. The proprietors are qualified mechanical applied scientists, Ishan has work experience of 2 old ages and Jai Raj Sharma has an experience of 30 old ages in building equipment industry. Furthermore Mr. Jai raj is besides a adviser for the transnational companies. The director hired by the company will be a qualified industrial applied scientist with an industry work experience.
Training will be given to employees on the regular footing as per the current demand in a market. Training will be given to them through the authorities organic structures like Institute of Industrial Engineering, which specializes in the work-shop preparation classs.
8.1 Organizational chart
Jai Raj Sharma
Procedure in charge
9.0 Fiscal deduction
“ Hire it out ” will necessitate a entire investing of Rs 70 Lakh, out of which Rs 20 Lakh will be the personal investing. The loan will be taken from the Government sponsored organic structures, which supports immature enterprisers. The loan will be taken either from the private equity houses, which give loan on the footing of feasibleness and profitableness of the concern program against that they take some coveted sum of portion in a company and other manner will be taking loan from the Non banking finance corporation, they provide loan to immature enterprisers against that they take all the equipments and the accoutrements installed in the house.
If there will be any sort of a fiscal deficit mediate the executing or the processing of the program, “ engage it out ” will take fiscal support from the SIBDI ( Small industries development bank of India ) .
The advantage of nearing SIDBI is that they gives you payment for the measures ( measure discontinuity installation ) , which no other bank or private equity houses give. In add-on to this, SIDBI provides more installations like finance for the capital outgo and working capital, these installations provided by SIBI would assist the concern coming out from all the fiscal jobs.
The 50 hundred thousand Rupees will taken as a loan from the Private Equity house for the continuance of 5 old ages @ 8 % per annum. The machines will be bought for Rupees 50 hundred thousand and Rupees 10 hundred thousand for the pickup new wave and furniture. Depreciation cost for the machines and furniture will be 20 % per annum, which will be Rupees 12 hundred thousand per twelvemonth.
Statement Showing Multiyear Net income and Loss Account of “ Hire it Out ”
Gross saless Gross
Cost of Gross saless
Gross Net income
Salary to co proprietor
Salary to Manager and employees
Rent of the Premisess
Interest on Loan
Advertisement & A ; Publicity
Operating Net income
Statement Showing the Multiyear Cash flow of “ Hire it Out ”
Gross saless Grosss
Cost of Gross saless
Wages for Manager
Advertisement & A ; Publicity
Payment of Loan
Net Cash Flow
Multiyear Balance sheet of “ Hire it out ”
Furniture & A ; Fixture
Machinery & A ; Equipment
Vehicle & A ; Pick up Van.
Loans from bank
Entire Net Asset
Capital and Militias
Break Even point and PV ratio in regard of Hire it Out
Fixed Cost ( Rupees )
Variable Cost ( Rupees )
Selling Price per unit ( hr ) ( Rupees )
Regular cost per unit
Fixed Cost +Profit /Sales
2612000+1562000 /5400000= 76.63 %
Break Even Point ( Gross saless Volume )
Fixed Cost ten Gross saless /Sales-Variable Cost
2612000 x5400000 /5400000-1262000 = Rupees 3408603/ Year
Break Even Point in footings of unit
Fixed Cost/Sales per unit-variable cost per unit
2612000/500-116.852 = units ( hours ) 6817.21 Unit of measurements per twelvemonth
There can be a negative impact on the company public presentation and gross if there is a alteration in the involvement rates and instability in the economic market. The factors like recession and down bend in the substructure sector will straight impact the company growing to veto.
10. Action Plan
Date of executing
Clearance of loan from private equity house
Membership of little graduated table industry
Licensing from BISC and ISI
Seeking benefits in footings of subsidy from authorities
Taking store and garage on rental
Buying of machines and equipments
Buying accoutrements for office and garage and there installing
Ad for the occupations and get downing of enrolling procedure
Promotional runs and web site development
Training of the employees
December -January 2011
Opening of the concern
Questionnaire: “ Hire it out ” is houses engage in giving building equipment machines on rent, it is set up in Faridabad ( Haryana, India ) .
Question1: Which type of equipment you like to engage?
Vibrator roller & A ; compactor
Question2: Which trade name you like most in the building equipment machines, as per you demand?
Question3: For what intent you need the building equipment machine?
Reclamation of land
Question4: How frequently you hire machine?
Within a hebdomad
Within a month
Within two month
Question5: From where you are?
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Question 6: Do machine driver cost be charged, while leasing machine?
Question 7: Do liberate of cost mechanical aid be given, at the clip of machine break down at site?
Skilled work force
Different assortment of machines
Proximity of services to both rural every bit good as urban country
Insurance of all machines and on site audience
Free machine operator
Location of the site
Entering in extremely competitory market
Dependence on authorities policies
Easy handiness of works location ( usage of older workss )
Scope of line drive growing
Fiscal support at lowest rate from establishments back uping immature enterprisers
Easy avaibality of taking machine on rental
Increasing consciousness of rental concern
High probality of shift of clients
Entry of major fabricating participants in equipment lease concern
Competition from the little houses ( Unorganized manner of concern )