If Marty Underwood wants to analyze how the economy is, he only has to look at his credit card machine.

“When times are good, people are spending cash or writing checks, because they have money,” says Underwood, owner of Proline Rentals in Baltimore. “When times are bad as they are now, we burn that credit card machine up. Customers say ‘try this card, try this card,’ because they are maxxed. And it's becoming more prevalent.”

Economists all over the country are scratching their heads to come up with predictions about which way the business is going to turn, but at least for the moment, Underwood's credit-card processor seems an accurate reflection of many U.S. cities. A friend of Underwood's, an economist for a federal agency in Washington, D.C., told him he is consistently more accurate than government reports. In a city like Baltimore, where the housing construction market is almost non-existent with a few exceptions, nobody sees quicker than the independent rental center just how much business has slackened.

“It's the homeowner and the light contractor, the little guy that maybe goes in and puts in a couple of walls in a storefront or something,” says Underwood in describing his customers. “He's a commercial contractor, a reputable guy, but that kind of work is not as prevalent.”

Fortunately, commercial construction is continuing to track strongly.

“The big builders are still building buildings,” Underwood adds. “That particular area within the industry here in Maryland, they are all spending money. Big universities here in Maryland are constantly spending money because they have to maintain.”

But for smaller rental companies, the smaller contractors are the engines of their business flow. For Underwood's Proline Rentals, for three-location ABC Rental Center, and for Mike Wist's Bay Country Rentals (to be profiled in a later issue), these are, in some ways, uneasy times.

The independent rental center constantly has to concern itself with simple issues. Putting up a sign or putting in a concrete plant or building on to a building all require permits and dealing with bureaucracy and red tape that can eat up an owner's time. Of course larger rental companies have to deal with the same issues, but the challenge is greater when there are fewer management staff to delegate to. Owners of smaller businesses often must focus on matters that affect the very survival of their companies.

Challenging times? Maybe. But in Baltimore, they don't back down from fights.

Not as Easy as ABC

Lee Lightner is excited. His brand-new full-color electronic reader board is sitting right on Joppa Road, 4 foot by 8 foot flashing: “Rent….Rent….Rent….Tree Chippers” and then “Rent …. Rent …. Rent…. Stump grinders.” He can program the board to broadcast any message or image he wants in any color to 35,000 cars a day going by. And because the area is usually congested, often cars are stopped and looking right at it.

“So now when people want to rent something, they're going to be in their sleep thinking ‘Rent….Rent…. Rent’ and they are going to think of our business,” Lightner says with evident excitement.

One of Lightner's great strengths is that he loves the rental business. Not everybody loves getting out of bed every day and going to work the way Lightner does. And even though the current rental environment is challenging and considerably slower than the past few years, ABC Rental Centers finds itself in a strong market position with three locations covering the north side of Baltimore (the spanking clean, modern, new store in Towson in a converted bowling alley), the west side (Catonsville) and the south side (Columbia). The company has been able to invest in new equipment, in service trucks and delivery trucks, concentrating on an 82-percent contractor clientele.

ABC has a strong presence in the downtown commercial building renaissance in Baltimore. “We're down there quite a bit,” says general manager Tom Ward. “We concentrate a lot on the plumbers who are doing a lot of residential dig-ups and service work. We do a lot of sewer and water-related work. We have a number of electricians' accounts, and some of them are working downtown on large projects.”

But the growth of the business hasn't blinded ABC to the challenges of the current business cycle.

“Homebuilding has just stopped,” Lightner says. “There is no homebuilding whatsoever, although construction in general is good and commercial construction is good. But the housing market in our area is bad.”

“A lot of people were riding [the recent boom] and it's taken some re-adjustments,” says Ward. “In some ways, that's better, it gives everybody a new perspective. You have to tighten your belts.”

While ABC is still a major player with the small contractor, increasingly the company is working with the larger contractors and construction companies. With a growing fleet of delivery trucks on hand, a growing stable of scissors and booms, backhoes, excavators and other earthmoving equipment, and the wide-angle coverage of the metropolitan area, ABC is able to hold its own on the middle level of the rental market.

“A lot of the pickup-truck contractors like ABC Rentals,” says Ward. “But the bigger-name contractors have also been finding us and we do a lot of deliveries.”

While rental companies are often reluctant to expand when business is down, ABC had the plans in motion during the earlier boom portion of the business cycle. The expansion has enabled ABC to grow during a year when same-store growth would not likely be very high.

ABC Rental Center acquired a bowling alley that, as Ward says, had been closed for a while and had become something of an eyesore. The company converted the 30,000-square-foot bowling alley into a sparkling clean showroom with a large shop and warehouse area. A grand opening brought an outpouring of community support.

“It was surprising how many people came by who had bowled in this bowling alley and they said things like, ‘Wow, what a difference!’” says Ward. “I think it's a big improvement for the community.”

The neighborhood's response during the new branch's first year of existence supports the notion, with solid new business. Ward and branch manager Dan Devereaux are still waiting for permits to put up a good size sign in the front, depending on a banner during the regulatory process in addition to large lettering on the front of the building, although set back a good distance from the street makes it hard to attract the attention of passing traffic.

“They had a huge bowling alley sign here at one time, it was just enormous,” says Ward. “It was from back in the 1960s or '70s, when you could have signs as big as you wanted. “It would be nice if we could keep that, but they wouldn't let us.”

While the current business environment is challenging — and revenue would be slightly down in 2007 if not for adding a branch — ABC is internally strong, with a lot of long-term employees and a well-established company culture and procedures. “Most of our guys have been with us for five years or more,” says Ward. “Some of the guys have been here longer than I have, 20 years.”

The presence of many long-term core employees makes the ABC staff choosy when it looks for employees, which is not easy in a city with low unemployment. “You go through a lot of trouble training somebody and trusting them and you want to think they're going to stay for a while,” says Devereaux.