Under attack on several fronts from consolidators with more capital, better buying power and cheaper rates, some independent rental centers have adopted what business scholars call a fortress mentality.
Instead of caving in or selling out, these feisty independents are protecting their turf by hunkering down and securing profitable niches.
Some might say Lew Coker has taken the fortress mentality to a new level.
The building that houses Coker Equipment Co. is designed to look like a castle - complete with brick facade and turrets.
The story of how the one-location rental and supply house in Gainesville, Ga., ended up in a castle offers a glimpse at the ingenuity and determination that drives rental center owners such as Coker to succeed.
"Anybody can build a building, but I wanted to build a landmark," Coker explains. "I started making some notes on paper and took the sketches to an architect."
The architect said it couldn't be done. Undaunted - not to mention unencumbered by corporate rules and regulations - Coker continued his quest by taking his sketches to a draftsman. The draftsman drew plans, took them to an engineer, and a few months later, Coker Equipment Co. moved into its new castle.
It wasn't the first time Coker did things a little differently, and certainly wasn't the last.
"I do my own thing," he says. "We don't go out of our way to be different, but it works for us." For example, when Coker Equipment began renting industrial forklifts, others in the industry scratched their heads. To his detractors, Coker responded that he was just giving customers what they wanted.
A key supplier of equipment and supplies to plants in Gainesville, an industrial town about 40 miles northeast of Atlanta, for more than 20 years, Coker can only smile when he hears consolidators say the industrial rental segment, including equipment such as forklifts, has unlimited growth potential.
Coker's affinity for the industrial market stems from his own days as a contractor. "I wanted to tie hardware and supplies to construction and industrial equipment rental because, when I was a contractor, I had to go to one place to buy my supplies, one place to rent my big stuff, another to rent my small stuff and another one to rent equipment to cut concrete. I asked myself, 'Why can't one company do it all?'"
With that, Coker Equipment was born in 1974.
The original plan was to ring the perimeter of Atlanta with several locations, leaving the downtown area for the large companies to fight over. Coker scrapped those plans when he opted not to bring other investors into the fold.
That's one of many examples of how Coker has had to adapt and change in 25 years of operation. But accommodating change is much easier for small independent companies such as his than for today's publicly traded behemoths, he says.
"I am reluctant to be critical of the big companies, because they do some things very well," Coker says. "But the problem is with the bulky skeleton of these companies trying to function in a world that needs real flexibility.
"The big companies can do a good job renting 30 items. There are 40 other good rental items that might not be used as much as the first 30, but are still used enough that they can carry an independent."
Coker sees firsthand the problems that bigger companies have reacting to local market conditions and customer needs, because equipment from nearby Rental Service Corp., Hertz Equipment Rental Corp. and Neff Rental branches often make it to Gainesville jobsites and plants. While those big companies serve Gainesville, they don't really service it, according to Coker, who says they have difficulty responding to emergency situations and follow-up needs.
Coker, who worked for a large corporation in another industry before starting Coker Equipment, says too many big companies fall into the trap of putting Wall Street before customers.
"There is so much number-crunching going on with the big companies that a lot of them are ignoring their product and their service," he says. "Most of the big outfits are trying to dress themselves for public offerings or buyouts. When you try to dress a business for that, it is different from when you orient a business for customer service. Some of the big companies might think we're foolish, but this business is strictly set up to serve the customer.
"We're profit-oriented just like the next business, but there is a little more to it. We have to meet and greet our customers every day when we go out to eat or to church or to the club or wherever. It is about profit, but it is also about a way of life."
Those large rental firms hell-bent on market share and willing to get it by slashing rates harm the entire industry, Coker says. "The character and integrity of this industry are really changing, and it doesn't look good," he says. "When big companies go out to jobs and take business at all costs, it really hurts me because they do a lot of damage to the customer. It is a shame to see business reduced to that."
While Coker has been approached by at least one consolidator about selling out, the price hasn't yet been right. As Coker says, "There is a difference between having something 'for sale' versus a 'fire sale.'"
If the bidding for Coker's castle never happens to heat up, that's fine, too, he says, because he is still bullish about the long-term prospects of independents.
"In bigger areas, you will have big rental companies, but there will always be thousands of mom-and-pops in the outlying areas," says Coker. "If independents are on the ball and have access to money and keep abreast of what is going in the market, it's tough to beat them."
It's hard to argue with Lew Coker. After all - in what might be the ultimate testament to independent will and entrepreneurial spirit - the man built a castle.
Gainesville, Ga. Owner: Lew Coker.
Founded: 1974.
Locations: One.
Employees: 19.
Annual revenue: More than $3 million.
Customer breakdown: Construction and industrial equipment and supplies.
