On the other hand, your "reality check" may convince you that the current level of equipment ownership is not maintainable if you hope to eek out profits the next few years. If that's the case, get it ready to sell and do it once prices firm up, or sooner if you need to.
Work out rental arrangements with your local dealer or rental company. And see if they can provide ongoing maintenance for your remaining equipment to get you out of the maintenance business.
#3: Good communication = financing opportunities
The No. 1 issue raised at the forum is the lack of financing and a lack of understanding of what it takes to get financing. The Credit Panel addressed these topics and offered insight not only to dealers but contractors, as well.
Work with your current bank. Communicate and keep them informed. No surprises, please. Have adequate cash flow projections to share with them. Supply a balance sheet with proper support.
Clean up the balance sheet. This goes back to Takeaway #1. Hint: The less debt you have on your books the better. Fewer assets also help get your debt-to-equity ratio in line.
Get rid of as many fixed costs as you can. Period.
Get help with financing from your dealer or rental company. As you know, many times there are deals on new equipment with a lower monthly commitment than you would have buying a used unit.
They tell us financing is available and that credit parameters have not changed. I believe the first part, but not the second. A clean balance sheet along with a reasonable cash flow projection, presented by management in a professional manner, is key to getting financing. Your dealer should be able to help you out here.
There was also a contractor panel as part of the forum. The contractors did not center on price as the primary driver when buying equipment. Service, support and parts availability all came in above equipment pricing.
In today's environment, working with dealers and rental companies that can make you more efficient will more than offset a price differential on the equipment. You need to be able to keep moving; have your equipment working; get financing when you need it; and receive above-average support and ideas to help you improve your efficiency and profitability.
How does the clean sheet of paper look now? A lot different from the status quo, I hope.
Garry Bartecki is the managing member of GB Financial Services LLP and VP Finance for the Associated Equipment Distributors. He can be reached at (708) 347-9109 or firstname.lastname@example.org.