Staying alive in the new rental wilderness

Feb. 1, 2000
History, it has been said, can be useful in figuring out what to do and what not to do.Examine the historical trends in the rental equipment industry

History, it has been said, can be useful in figuring out what to do and what not to do.

Examine the historical trends in the rental equipment industry in the past few years, and you can draw a variety of lessons, most of which hinge on change and adaptation.

For companies that flexed with the times and changed course when necessary, the rewards were bountiful. Others, who were ill-equipped to compete in a rapidly shifting environment, had to swallow hard and deal for the first time with a second- or third-place finish.

History has a way of repeating itself, so while trends may come and go, core values of successful companies are often fixed and ironclad. Providing solid service, valuing employees and knowing the market your company serves are foundational themes that will never go out of style.

But, what about trends like slashing margins to capture more market share and cherry-picking employees from existing equipment yards? Here, history reminds us again of an important business tenet: principled business practices live longer than gimmickry and short-term profit motivation.

Below is RER's point-by-point interpretation of the changing rental landscape which will help you gear up for the years ahead.

Ten-Point Survival List 1 Know your customer. The current business climate calls for superior service. Good service requires being responsive to your customers' needs, and you can't deliver it without knowing what they want. Develop methods to thoroughly define your customer base. If necessary, develop questionnaires or conduct random interviews to clarify whether your organization is doing what it is supposed to do. Finally, get a handle on examples of your best service by asking loyal customers what keeps them coming back.

2 Know your niche and exploit it. Figure out what your rental company is best at, and make that the centerpiece of your business. If repair work is your strength, make sure your customers and the community you serve know it. Offer specialized equipment, or develop a reputation for being No. 1 in a certain service sector.

"This is an ever-changing business, and you have to adapt," says Bill Colbath, owner of Colbath Equipment, Rochester, N.H. "I do a lot more service work now than I ever did. That may not be the way I want to go, but I have to find ways to be needed."

3 Recognize the value of your employees. Your sweat and muscle may have founded your company, but your employees are its lifeblood. Establish standards and programs that reward consistent and exemplary employee performance. Discuss with your workers what they hope to achieve personally and professionally, and become a partner in helping them achieve those goals.

4 Let go of compulsive need to micro-manage. Establish an environment where you trust your people to make good business sense decisions. Encourage open communication, and develop leadership skills in your brightest talent.

"By definition, a company is a group of people working together for a common goal. No one can do it alone, so building a business demands creating an environment of trust and allowing others to live up to that trust," says Travis Burch, president of Burch Lowe, Atlanta, in an interview last year. "It can be difficult for an entrepreneur to let go, but to grow, that's exactly what must happen."

5 Search for ways to add value to your service. Customers will perceive value only if you prove it to them. Go the extra mile so they can see that you are breaking your back to meet their needs. Nothing builds loyalty like an owner or manager who visibly cares about his or her customers. Personally handling crisis calls, visiting customer job sites and providing a superior maintenance agreement are examples of adding an extra edge to your business approach.

6 Establish strategic partnerships. Take a good look at the community you serve, and figure out what you can offer and how that may benefit your business. Are local marketing professionals, who may need some of your equipment or supplies, willing to trade time and expertise to create fancy promotions or a new company logo? Is your local trade school a potential source for new talent? When's the last time you made yourself known at the local builders association? Networking is a tired term, but its relevance is as vital as ever. Make contacts and hammer away at reaching the marketplace with your company philosophy and goals.

7 Become Net-savvy. The Internet is useful to some businesses more than others. Decide if you can enhance your operation, improve internal communication or save on operational expenses by utilizing the Web. Grasp the potential of this technology by evaluating its necessity when purchasing new or used equipment, or using it as a training tool for employees.

8 Turn negatives into positives. If you worry about what your competition will do next, you're not doing yourself or your company any good. Consolidation will continue to be a trend in the rental industry, and that's a fact. Life is change. Regroup and recognize the abundance of business opportunities for chain operators and independents alike. Reflect confidence, and it will radiate throughout your organization.

9 Increase professionalism. Keeping impeccable books, regularly updating your company's business plan, applying the company safety program and scheduling routine management meetings are some of the necessary steps your organization should be taking on the road to greater professionalism. Furthermore, assure yourself that your organization is fiscally sound by expanding lines of credit. This process could serve two purposes: You could pursue larger equipment buys, while reaffirming sound financial footing. If you are an independent who may consider selling to a larger firm, each of these professional standards will be scrutinized.

10 Reward yourself. Chances are you've worked hard to be where you are. Have you given yourself enough credit? Evaluate your personal and business priorities to make sure they don't conflict. Renew your interest in the parts of the business you most enjoy. Go to an industry show or event to get away from the business, and share your stories with counterparts from different markets. Seek balance in your life so that you bring greater energy and wisdom to your position of leadership.