Eye on Rental

from Rental January/February 2023

Market Watch

Plan to Start

2023 OFF RIGHT

@Yingyaipumi.stock.adobe.com

It’s true that I always seem to be optimistic around this time of year, but I feel that 2023 is going to be another good year for rental companies, despite the mild to moderate recession that some economists say is very likely.

The Federal Reserve is slowing the economy, which means that the rental companies that are not running efficiently may not perform very well.

It is possible that the equipment rental industry will finally begin to benefit from the early phase of the muchanticipated infrastructure spending bill. Also, combined with the cautious capital equipment spending of construction companies, industrial companies and homeowners during a potential economic slowdown in 2023 and 2024, it is possible that this will lead to more renting, not less.

It’s more important than ever to focus on becoming efficient in practically every aspect of your business. This includes better efficiency in your facility, delivery systems, personnel, rental inventory, marketing plan and more.

To achieve success, make proper preparations to start off 2023 right. The wise will make business planning a priority as many rental companies need a formal and structured way of operating. Of course, when the economy is strong, even the rental companies that haven’t planned seem to do well.

Going into the uncertainties of 2023 and 2024, it’s important to become efficient with your financial resources. Even though some economic slowdowns and downturns usually have a minimal negative impact on equipment rental companies, it’s prudent to be certain there are enough liquid reserves to weather a longer or stronger economic downturn.

Every rental company’s situation is different, so be certain to seek the advice of your local accountant. Don’t just stand by and wait to see what happens. There is a lot of craziness in this world, so it’s anyone’s guess what’s going to happen to our economy. Be prepared.

Another benefit of having adequate liquid assets (and borrowing capacity) is that it could help rental companies take advantage of unanticipated opportunities. One never knows when a truly worthwhile investment might appear. It’s wise to have additional funds to invest in your employees. The last year taught us the real value of keeping good people.

One of the huge opportunities for many rental companies for 2023 is to establish more efficient procedures for your entire staff. There are often many ways employees can become more efficient, but it is difficult to break out of doing things the same way, so it may be wise to get direction from an experienced outside rental business consultant to recommend fresh processes and procedures for your consideration.

Try to reduce recurring hassles. Some can’t be helped, but some can be corrected or reduced with the proper planning and formal structure. One of your most important initiatives this year should be to develop a comprehensive strategic plan. Too much “winging it” can cause enormous problems and can make your business only marginally profitable. It’s important to the health, growth and future viability of your business to have a more formal, structured way of operating the business. Don’t head down the path of the status quo, rest on your laurels and do nothing. Even if you’re happy with the way things are, improvements now are vital to long-term success.

The sooner you start the process of serious business efficiency planning, the sooner you can rid yourself of unproductive hassles you face. There is far too much energy wasted by some challenges that rental business owners presently face. Transform your company to be more efficient, smoother running, less stressful and more profitable for 2023.

Dick Detmer is a nationally recognized consultant, lecturer and writer with 40+ years of experience in the equipment rental industry. In 2018, he celebrated the 30th anniversary of his business, Detmer Consulting Inc., and his column in Rental. Dick can be contacted at dick@detmerconsulting.com, (309) 781-3451 or by visiting his website www.detmerconsulting.com.