This financial model is going to focus more on the timing of cash in and out rather than depreciation or returns. That is because no matter what kind of equipment you are renting out, it is very likely that you build up your inventory over time. That means purchases at different times and cash going in and out over time.
So, in order to properly plan out the financial's for such a business, it had to be highly dynamic with respect to what is happening in a given month over the entire 10 year flow.
Here are all the features:
- Up to 4 different loans that all have their own assumptions and can have different starting months if you plan on financing some of the purchases.
- Up to 100 pieces of equipment (easily expandable to 1,000's if needed).
- Manually pick the number of days utilized in a month across all 10 years (granular enough so each year you could have a different daily utilization for each piece of equipment).
- Pick the start date that each piece of equipment starts producing.
- Pick how much you will charge per day for each piece of equipment.
- Pick the date that each piece of equipment is discontinued if applicable.
- Enter its salvage value if applicable.
- Each month, you will be able to see all the projected rental income, operating expenses, cash in/out from financing if any loans were taken out in that month, cash out if any equipment was purchased that month, cash out for debt service, and the net running cash position as of that date as well as the effect on cash specifically for the given month.
- An annual summary has also been built.
- A running balance of debt is tracked based on the loan inputs.
- Visuals to show key cash flow metrics over the 10-year period.
And again, you can make a copy of this excel template so that one can be used to build your projections and the other can be used to put in actuals. This allows for better forecasting in the future as well as planning.
Note that every market is going to be different in this kind of business so you want to figure out how much local construction companies / other organizations are willing to pay per day for your equipment, what is the acceptable wear and tear, and all the insurance/paperwork details.