Is your business growth being hampered by devoting resources to equipment categories that just don't deserve the investment? It's very easy for one to rely too heavily on what has rented in the past instead of analyzing what will rent now.
If your community has changed as much as my clients' market areas have in recent years, you might have once vibrant inventory categories that are now laggards. Competition, the local economy and other factors have dramatically changed the game. Have you made dramatic changes to respond to the new conditions? If your rental business isn't making significant changes, it probably isn't growing like it has in the past.
It might be helpful to think of your inventory like stock brokers think of the best mix (in percentages of your investment) of stocks and other investments in your portfolio. They talk about portfolio "allocation." What is your present rental equipment inventory "allocation" and what is your best mix for the future? It's important to determine what you should be investing in - which may be very different from what you have right now.
Try to anticipate the direction your customers want you to take. Be proactive. Position your inventory for today's and tomorrow's needs - not yesterday's.
Here are a just a few points to consider:
- Don't wait until January of February to start the analysis. Have an objective rental industry consultant evaluate your market and inventory and make recommendations now.
- Take a fresh, objective look at your inventory diversity. Are you too diversified or would it be wise to consider even more diversification?
- Get an objective view of all of your competitors. Do you really have an accurate view of what your competitors are offering? Again, use the fresh eyes of a rental consultant.
- Track "missed rentals" religiously. This can help to identify what categories are under-represented in your fleet. If you can quantify not only what items you are receiving requests for but also exactly how many requests you have received for those items, you can make much wiser decisions. Try to take as much guesswork out of the equation as you can.
- It isn't always easy to see the trends. Your computer reports will help with the analysis.
Finally, it might be time for a major shift in your inventory. It might be time for a major house cleaning. On the other hand, it could be the best time to pull the trigger on getting into product categories that are very foreign to your usual offerings. Of course, it's wise to weigh all of your options carefully before big decisions are made. Now is a great time to identify needed inventory allocation changes and to make the tough decisions.