RER Interviews John Wooten, All Star Rents, Fairfield, Calif., No. 100 on the RER 100, about how the company’s recession strategies positioned it to move forward and find new niches to help its growth.
RER: You had a better year in 2011 than in 2010. Was there any particular customer sector that contributed the most to the improvement?
Revenue across the board is improving. While pretty similar in percentage between small and large fleet, the large fleet dollar value is much higher and really helping cash flow.
Were there some things that your company did, either in 2011 or before, that helped make improvement possible?
Our decision to be aggressive with cost cutting on the front edge of the recession allowed us to get through in fairly decent shape. This allowed us to start reinvesting back into the fleet just as we saw improvements coming. We primarily focused our spending through that period on smaller, high-ROI items. We also took advantage of lower auction prices on some larger ticket items when some of the consolidators were purging good equipment for revenues.
What are your expectations for 2012?
I am looking for 10-percent growth.
What about rental rates for your company and in your markets in 2011 versus the previous year?
I raised some rates in early 2011, especially on the smaller items that were still renting OK. Even though there was a sense in the market that pricing was very sensitive, there was also the feeling of “things are getting more expensive” acceptance in the market too. Couple that with less price shopping on the smaller items and I think we came out ahead on that one without ruffling any feathers.
Do you have any particular expansion or growth plans for 2012 that you are able to share?
We are very excited about being the new dealers in Northern California for the Superabrasive (Lavina) line of concrete-polishing equipment. It is creating some great relationships between us and our customers — we are offering them a way to get into a new niche (along with us). It is a good partnering opportunity and bringing us some customers we otherwise would never have rented to.
Any other observations about the market that you’d like to pass along?
I have to say I am still pretty cautious about the future. It is a delicate balance between taking advantage of what is happening yet not committing too much in terms of long-term notes, new hires and other commitments that are hard to back out of. Again, our ability to cut and slash quickly when things tanked is what has allowed us to get back on track more quickly. I am pleasantly surprised to see rental out of the recession sooner than other areas of the economy … that has not always been the case in the past.