If you are the owner of a small, independent rental business, I hope you pay special attention to Gary Stansberry’s cover story on the future of independent rental companies. I certainly am not going to predict the demise of this particular species, and Gary obviously doesn’t either. But I suggest you read the article through to the end. After he points out many of the obstacles to success for independent rental companies, he shares some ideas that can definitely help.
I remember when the first major wave of consolidation occurred in the latter half of the 1990s, a period Stansberry refers to, when United Rentals arrived on the scene, when companies like Prime and RSC, Hertz Equipment Rental, NationsRent and National Equipment Services seemed to be buying up most of the viable independent rental players. Some in the industry predicted that the era of the small independent was behind us and the age of the larger, chain rental store was replacing them.
I also recall writing an article that spoke highly of the intelligence of United Rentals’ management and why I thought their plan and intentions were likely to be viable, I got a number of e-mails and phone calls telling me why I was wrong. The company had its share of ups and downs in its early years but once it really got its procedures, processes and plans in alignment, its success turned out to be staggering, and companies such as Sunbelt Rentals, Herc Rentals, H&E and a few others have done extremely well also. The national players have obviously played a vital role in the industry’s growth.
But the predictions of many that the independent rental companies were a thing of the past turned out to be premature. As Stansberry writes, the independents have continued to be a vital part of the rental industry’s growth. I’ve been surprised, as Gary has been, at the continuing emergence of new independent rental companies over the past quarter century. Every year when we compile the RER 100, I’m surprised by newcomers who have been in business for half a dozen years, give a take a few, who continue to form and to thrive.
But, as Gary writes, the barriers to entry seem to be higher now – the sticker price of new equipment, the difficulty of finding, much less being able to afford, adequate property and buildings to house a rental business, is greater than ever. While construction still is strong and mega projects are booming, I, for one, am concerned about the potential effects of high tariffs and trade disputes on the supply chain, which has gone through enough challenges and shocks in recent years.
In my years of covering this industry and trying to follow its trends, I’ve been right about a few things and wrong about some others. But if you are an owner of an independent rental company, I would definitely take seriously some of the key points that Stansberry makes about what it is going to take to succeed in this industry in the foreseeable future. So read what he says about using data to manage your rental fleet properly, about being active in your community to build lasting relationships with your customer base, about helping your employees to grow and realize their potential, about creating a ”never say no” mentality about customer requests, and about looking for expansion opportunities. Not many people have seen and analyzed more rental companies than he has, so take his advice seriously.
And, while you’re at it, take a look at your service department, and start by reading our article about how to run it in an orderly manner. Your service department is the foundation of everything that you do. Practicing preventive maintenance on time and responding with immediacy in the case of breakdowns is more important than anything else you can do. If your service department is run haphazardly, if your service techs are not constantly improving their skills, and you aren’t doing everything possible to prevent equipment breakdowns, no amount of marketing skill will save you.
On that note, in this hoIiday season, I wish you the best -- for you, your family and your rental business.
