Building a Business with Infrared Cameras

[Kurt]

Hello fellow entrepreneurs,

I am in the early stages of planning (all right, I confess... there's been more action and less real planning than is ideal) my first real business, an Infrared Camera Rental service in my hometown.

Although I am optimistic about my chances (which entrepreneur isn't?), I'd love some feedback from other more seasoned businesspeople.

Essentially, the business plan is simple: buy infrared cameras (about $4000 each, depending on make), and rent them out, primarily to home energy auditors, for about $150/day, or $400/week (pricing is by no means firm). Right now there's a tremendous flurry of interest in green building and home energy audits, and infrared cameras are a great tool for diagnosing energy leaks in a house. They're also becoming an industry standard, and home-owners will come to expect that energy auditors have access to this equipment. The problem for auditors is that the initial investment is quite steep: together with infrared cameras, they are also expected to have blower doors (~$3000) and several other pricey tools such as carbon monoxide detectors.

My start-up is thus designed to help energy auditor start-ups, the small guys who will want to rent IR cameras and blower doors until they get really established, as well as do-it-yourselfer homeowners who want to get their own hands on the equipment and save the $500 average home energy audit fee (standard in my area).

Right now competition is very limited. None of the major tool-rental companies such as Home Depot rent either IR cameras or blower doors. There are 3-4 companies that do this online, but because of the fragile equipment, shipping fees are extremely high (~$150/camera), and most customers would presumably prefer to deal locally. I plan to start small, with 1 IR camera and 1 blower door, and grow with the demand.

My marketing plan is mostly web-based. I have run a Craig's List probe and the response was positive (3-4 inquiries/week for the life of the ad). I hope to establish a lot of repeat business, as there is naturally a lot of risk in renting expensive equipment to strangers.

So, fellow entrepreneurs: what do you think of this brief plan? Is it a sustainable business model? Can anyone give me tips or suggestions, or am I overlooking anything important? Is anyone else doing or interested in a similar business? Thanks for the feedback!

[Earthbound01]

I think this sounds good! What makes it have strong potential is the small amount of competition and some demand.

As far as marketing in addition to the conventional methods you could just look up online or in the yellow pages your potential customers and inform them of your service and why it'd be better/cheaper to go through you for the cameras.
Canvassing neighborhoods work too.

Where would you be purchasing the cameras?

[jbeaton04]

One thing you will have to be careful with is the renting procedure
ie. rental contract
securing payment
getting camera back

[Kurt]

Thanks kindly for the feedback, Earthbound01 and jbeaton 04. Contacting customers directly is a great idea - though there is always the chance that I could inadvertently inspire some competition! I plan to buy cameras through the normal sources, online retailers. Infrared cameras have begun to come down in price, but at $3000-5000 they are still well beyond the reach of an average homeowner and a difficult buy for a smaller independent energy auditor.

As for legal and payment issues, jbeaton, your warnings are well advised! I will need to have a good contract in place (would any readers who have experience with rental contracts mind giving me a few minutes of their time?), take down driver's license information in case they abscond, and use a secure third-party payment system (I think Google Payments will be by friend).

I'll be most grateful for any further feedback!

[TheRule]

Without knowing much about the industry, it's sounds interesting.

Off the top of my head I would definately contact your lawyer to ensure your contractual agreements are sufficient.

One possible marketing target could be looking through local real estate ads (or whatever way people advertise real estate around you) and then call and find out which ads are people who are consistant investors. Those people may need these services on a regular basis.

Would it be lucrative and conductive to your business model to ALSO have a base charge for YOURSELF to go out to a property and take the pictures or whatever needs to be done for a smaller fee? Some people may not be framiliar enough with the equipment to actually come and rent it (could be way off base here). That way when you come out for the first use you could explain the use and functions on site and hopefully acquire a more long term relationship were they WOULD be willing to rent.

Good luck.

[Wraip]

Perhaps get a credit card deposit system like the ones they use at hotels. They swipe their CC and a deposit is reserved from the credit part. In case someone doesn't come back with the camera charge the whole price of the camera.