How many rentals until an item pays for itself?
A rental business buys an item once and sells its use many times, so the whole game is whether the item earns back its cost before it wears out. This model computes break-even turns for any rentable asset, from dresses to camera bodies to a car on a sharing platform, and then finds the rental price that pays the item back on your schedule.
Words on this sheet
- Acquisition rate: What it costs you to get one unit into the fleet, written as a share of what that unit retails for.
- Units shipped per order: How many units leave the shelf on a typical order.
- Contribution: What is left of the income after the costs that come with it, before the fixed costs are paid.
- Break-even turns: How many times one unit has to go out on hire and come back before it has paid for itself.
Finance Starter Goal Seek free
After you install, this is the model to open.
Rental Break-Even Turns
- In your spreadsheet, click the Sortia icon in the strip of icons down the right-hand edge. No strip? Click the arrow at the bottom-right to open it. You can also use Extensions, then Sortia, then Open Sortia.
- Click Start from a template and put that name in the search box.
- Pick the card with that name and click Load this template. It arrives on a new tab with real numbers already in it.
The answer
At the default $105 price the sheet answers instantly, and one click of Goal Seek reprices the item to pay back by turn 6.
- Break-even turns
- 8.9 rentals to recover the $560 buy-in
- Contribution per rental
- $63 of each $105 fee, after cleaning & shipping
- Lifetime profit
- $196 per item over its 12-rental life
- Price to pay back in 6 turns
- $155.56 Goal Seek answer, 22.2% of retail
At a $105 rental fee this item needs 8.9 rentals to repay its $560 acquisition cost, so only 3.1 of its 12 usable rentals produce profit and the item nets just $196 over its life. Goal Seek shows that charging $155.56 per rental reaches break-even by turn 6 and lifts lifetime profit to $560 per item. If your item wears out before its break-even turn, no volume of bookings will save it. Reprice it or stop buying it.
The model
The defaults describe a formalwear rental shop that ships a backup size with every order, so each rental puts two garments in the mail and both count toward acquisition cost.
| Item retail value | $700 |
| Acquisition rate | 40% of retail |
| Units shipped per order | 2 (backup size included) |
| Rental price | $105 (15% of retail) |
| Cleaning & shipping | 40% of each rental fee |
| Usable rentals before retirement | 12 |
Once it is in your sheet
- The model arrives with real numbers in it and runs as it stands, so you can press the button first and understand it second.
- Change the numbers to yours. The sheet marks which cells are inputs and which hold formulas, and most labels carry a note explaining the row.
- Press the run button at the bottom of the panel. It is labeled for the tool you are in, and the result lands on its own tab, with a written reading of it beside the figures.
Never used Google Sheets? Start here goes the whole way, in seven steps, and assumes nothing.
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Every model like this one, and the method behind them: What-if analysis in Google Sheets.