Margin of Error

Dec. 1, 2000
There's a power crisis - and this is not the opening line to a presidential election ballot joke. But it is the making of front-page news, and it is cutting

There's a power crisis - and this is not the opening line to a presidential election ballot joke. But it is the making of front-page news, and it is cutting an already small margin of error to almost nothing - for power providers and users, that is.

Utilities across the country are struggling to meet surging electricity demands, thanks to deregulation and outdated facilities. Meanwhile, construction of power plants is booming even as other building segments show signs of slowing.

In 2001, the energy rental sector will continue buzzing, with entrenched names such as GE Energy Rentals, Aggreko, Caterpillar and other specialists adding locations, sizing up niche acquisitions and chasing down billion-dollar contracts with some rather nontraditional rental items and services. Gas turbines, anyone?

But the power rental segment is a grid of opportunity for the nonspecialists, too. Businesses - especially the e-commerce kind, whose very existence depends on keeping the traffic flowing 24/7 to their digital registers - are thinking like hospitals, establishing emergency and backup power strategies should the lights go out.

And Y2K, the most hyped story of the much-hyped year 2000, helped introduce the idea of backup power to millions of homeowners who hadn't worried so much since a previous generation built bomb shelters in the back yard.

Speaking of margin of error, it's also tight on the labor front for rental centers - unless they're neighbors to one of the increasing number of manufacturers announcing layoffs in recent weeks. Good help has always been hard to find, but now mediocre help would do in markets where the unemployment rate remains at all-time lows.

With pricing pressures affecting the profit margin, there is no such thing as a grunt position. Everyone on the payroll could affect the bottom line. How long is that customer on the fence being left on hold? How many off-the-beaten-path job sites are ripe for a presentation but never passed on to the sales force by a sour driver?

Of course, there is no map to guide you from merely surviving to merrily growing. The directions and detours change daily. It's not just a matter of wanting it more than the branch across the street does, it's making your people want it more than the people across the street. The difference between making a living and doubling your profit margin might be too close to call, but it looks fat in the wallet. And it won't require a recount.