Focusing on your Niche for the Future

Every week rental business owners read about strong rental companies starting up new locations or acquiring existing rental companies. Some of this can be welcome news to rental companies if they would like to have a larger rental company purchase them. However, this is not good news to many rental companies that wish to continue to maintain and grow their current foothold in their market areas. Consolidation is not over and may be accelerating. There is increasing interest in equipment rental companies. The question some rental business owners and operators are asking is “what can we do to prepare for more, and perhaps stronger, competition?” differences that set your rental company apart matter.

Focus on what makes your company different from your competitors: your niche. Even rental companies that have been successful in their business periodically reinvent or redefine themselves.

It is relatively easy to branch out with an associated business or jump into a different line of equipment. One strength of independent rental companies is that they can pivot quickly. This agility can also be a negative if the new direction is not vetted properly. Sometimes the glamor of a new opportunity can cloud judgement. Whether one is considering adding another location or embarking on another endeavor, be extra cautious. The new opportunity might turn out to be a drag on your company. No one knows your business better than you do, but consider getting an expert opinion from someone who has worked with a large number and wide variety of rental businesses.

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Some rental companies try to be everything to everybody, and in some market areas, this might be a successful approach, but when I work with my rental business owner customers, I often discover cases where a stronger or different focus can lead to much more growth and profitability. Having a strong niche or multiple niches can help reduce the risk of increased competition.

Just believing you are different isn’t enough. Perhaps your staff should demonstrate what differentiates your company. At times, it is wise to advertise what you are doing differently, and in other instances, not advertising is best. These strategies are part of the company’s “secret sauce” or a more comprehensive growth initiative that hasn’t been fully implemented yet. Examples might include expanding into aerial equipment or battery-powered construction equipment, but there might be a shortage of equipment from the manufacturer. If the niches are not temporarily confidential, get the word out. Don’t assume that customers know all that you do. Prove that the

The same is true when considering whether portions of your current business still make sense. Even though certain parts of your company grew your business in the past doesn’t mean they make sense going forward. Sometimes these parts of the business hold the company back by draining financial and labor resources. Especially considering the tight labor market, it may be the perfect time to trim unnecessary or underperforming portions of your business. Some or most of one’s business may not need to be adjusted. You don’t want to change the recipe for success and destroy your “secret sauce.” Your company is likely where it is today because of some sound business fundamentals that still make sense going forward. Don’t change these fundamentals. Accentuate them. Focus even more attention on what differentiates your company in your market area and consider new or expanded niches for your company’s future viability, growth and profitability.