Every equipment rental business is battling the pressure of a possible recession and facing the same conundrum: how do I grow my business strategically without hiring more people for everything? Hiring more people presents risks and costs that aren’t well-timed in periods of economic uncertainty. And no matter the state of the economy, it’s always the aim to run as lean as possible while still providing the best service, operating efficiently, outpacing the competition, and improving the bottom line.
Of course, as your business grows, so does the pressure to add more resources, and sometimes this is done aimlessly, causing you more overhead than you need and more issues to untangle down the road. You also might already have a great team ready to build and expand your operations, or you just want to avoid the headaches of recruitment. Either way, you’re looking for opportunities to scale without spending a ton of money and time looking for more talent.
Whether you rent construction, event, medical, oilfield, or other equipment, there’s really no set manual on how to grow effectively and efficiently. If you add too many customers too quickly, you may encounter expenses you can’t afford or book customers you can’t accommodate. It’s common to react by throwing more people and money at a challenge as you experience the pressure. But with a solid tactical plan and the right timing, you can minimize many risks to your equipment rental business and allow it to thrive, even in more trying times.
Our team of equipment rental operations experts has outlined 7 proven strategies to grow your equipment rental business with fewer people.
1. Identify Your Strengths and Weaknesses
It may seem obvious, but before bringing in new business, you need to know what’s working and what’s not. By interviewing customers and analyzing customer data, you should be able to uncover where you are making and losing money. Here are some questions to consider:
- Who are your most profitable customers, and why?
- What equipment do your customers rent the most?
- Do you have idle inventory that’s currently wasting space?
- Is your equipment regularly maintained and in working order?
- What areas of your rental operations are inefficient?
- Is there an area of your business you can leverage more?
To accomplish this, you will need to have your data in order and a business management system that can produce reports that help you objectively answer the questions above. If your current software doesn’t provide these reports, or you don’t have them set up yet, this is where we recommend you first focus your efforts.
At Open Door, our customers often use Power BI with their ODT Rentals solution to pull valuable data and analytics segmented by top products, regions, seasons, customers, and more. This level of visibility will provide the insight you need to grow your rental operations. Read more about the benefits of equipment rental ERP here.
2. Evaluate Where You Get Your Supply From
When scaling up your rental business, you must be ready for a higher volume of bookings. It doesn’t matter if you are renting construction trucks or generators; you need to be able to add more stock to your inventory to meet demand – without breaking the bank.
Ultimately, the goal is to ensure you always have products on hand in case your bookings exceed your inventory capacity. If your current supplier can’t offer the turnaround you need, you might have to search for a local supplier. Another option is sub-renting from other local rental businesses. Some equipment ERP rental solutions, like ODT Rentals, allow you to easily track the ability to re-rent equipment to your customers that has been sourced from competitors and other third parties. This feature prevents overbooking and generates a linked purchase order to match a supplier invoice.
3. Dig into Your Financials
Before considering cost-effective alternatives that will help reduce your monthly outlay, you need to see what you’re spending. Instead of simply producing required financial statements, take the time to really analyze them and find out where your profits and losses are coming from. This is a critical step towards growth.
If you have a rental management ERP system in place, you can set up regular reports and dashboards with valuable KPIs and have this information at your fingertips. With accurate insight and visibility over the right rental metrics, you can stay focused on what is driving your business forward and make informed decisions that create efficiencies – without hiring a new employee.
4. Assess Your Competition Regularly
It never hurts to look around and see what your competitors are doing. The equipment rental business is highly competitive. By studying the market continuously, you will always stay in the loop on changing rates, evolving demands, new products and services, and other important information. In this process, you might also discover what new equipment is available to rent or what services to offer that will round out the experience for your customers.
If you have a particular local or industry competitor in mind, you could set up a secret shopping exercise and take notes of the customer experience. You’ll be able to stand in your customers’ shoes and decide what works well, what they could improve on, and what you can then capitalize on. Learn more about improving your equipment rental customer experience and retention here.
5. Look for New Revenue Opportunities
The purpose of developing your equipment rental operations is ultimately to increase revenue. You don’t need to add new employees or invest in new equipment to find other avenues that generate business and additional profits. Here are some examples:
- You could expand your marketing efforts to grow your online presence and drive new business by running a targeted ad campaign
- You could add new services that compliment your existing rental business
- You could open a second location in another area and share your current inventory
- You could invest in sub-rentals to keep up with supply and demand
6. Invest in Your Online Presence
One of the best ways to grow any business is through online marketing and building brand awareness. By getting your brand and its products/services in front of more faces, you can reach more relevant traffic and convert them to customers faster.
A single investment in a targeted ad campaign or an optimized website can generate several sales leads and yield significant profits. Additionally, it will help to improve the customer experience by providing prospects with all the information they need about your company to make a purchase. When they have access to details like the types of rentals you provide, how much they cost, and what insurance options you offer online, you get more qualified buyers showing up at your door. It’s proven that the more information you supply to a prospective buyer online (i.e., self-service research), the less resources, effort, and time you’ll need to spend answering questions via phone or email.
Obviously, what you put into marketing will depend on your budget and who you have on staff that can maintain your social presence and website. In some cases, outsourcing areas like this to a marketing agency often costs less than hiring a new employee in-house.
7. Leverage Technology to Automate Core Tasks
As you know, there are many moving parts in an equipment rental business. And if you don’t have a centralized rental management solution to handle rental inventory, customer invoicing, servicing, field ticketing, sub-rentals, and finances, it will be harder to scale your business. Why? Because you’re running your equipment rental operations based on disparate systems, manual processes, and inaccurate data.
At the end of the day, the more manual and administrative your operation is, the more people you require to keep the business running. If your goal is to grow but not hire more staff, you need an integrated equipment rental management solution to automate these core processes. It will also give you the performance visibility you need to make faster, more actionable decisions based on real-time, accurate data. To learn more about equipment rental ERP and find out if you’re ready to invest, read the informative blog post below:
Get Started – Talk to an Equipment Rental Specialist!
Open Door Technology has worked in the equipment rental and service industry for over 20 years. We have helped many growing rental companies like yours develop growth strategies that streamline their business and boost profitability.
If you have any questions or are interested in picking the brain of an equipment rental specialist, get in touch with our team today.