If you are in trouble with the bank, it is best to be proactive and tell them about your problems before a problem hits the fan. In addition, it will pay to get some help trying to restructure the loan, while trying to protect your personal assets because of any loan guarantees.
The tech issue
Many of you who own equipment have sold off units where utilization was projected to be slim. And since you didn't need the equipment, you may have also released some of your service technicians.
From what I hear, many of those technicians are not going to come back, and you will find yourself without people to keep the equipment rolling once business improves. To make matters worse, late-model equipment is much more complex to maintain. More extensive expertise is necessary to analyze the problem and know how to fix it. And with Interim Tier IV and hybrid units coming on line, this issue only becomes more serious.
Equipment dealers tell me they are getting more and more requests to maintain contractor fleets. This keeps contractors out of the repair business; keeps expensive payroll to a minimum; eliminates the need for expensive repair equipment and parts inventory; and probably improves uptime. Not a bad way to cut fixed costs to make them variable.
Of course, as we've mentioned before, equipment rental is also an option where the entire cost can be charged to a job, with the repair problems off your plate for good.
Yes, things are bad, but there is no need to make them worse. Planning during good times and bad must go on, especially when it comes to tax and financing issues. Cutting overhead is also not a bad idea if you can transfer your maintenance work to another entity.
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 email@example.com.