Up until now, many rental businesses have cut expenses as the primary way to deal with the recession. It's time to consider a different approach. As one of my customers said, "Now, more than ever, it's all about growing rental income." It's time to consider new strategies to raise rental income instead of relying on business to come back to pre-recession levels on its own.
There are some business needs that must wait. For example, most rental companies are not going to do a major showroom remodel project right now. To everything there is a season, but with the economic ordeal many of you have experienced in the last two years, this is not the time for most of you to make certain investments.
Of course, ways of cutting expenses are of great interest to every rental business owner too. But many rental business entrepreneurs have already made significant cuts and now want to concentrate on the income side of the business.
There are so many strategies that could make sense now. The strategies that would be best for you now would depend on your individual company's unique situation. Consider everything and anything but be careful not to blindly follow the strategies that have worked for others in a different market. I have seen so many cases of rental companies that have followed the path of another rental company, with disastrous results.
It's possible that minor tweaking in your advertising could make a big difference. Or perhaps a few personnel changes are in order. Sometimes policy and procedure changes can have an immediate and positive effect on rental income.
I did some consulting for a company earlier this year that was charging rental rates that were so low they reminded me of the rates charged in the early 1970s. Some of the costs to purchase rental equipment have more than doubled since then.
I assisted with an item by item review and the newly adjusted rates have already yielded many tens of thousands of dollars in added rental income and almost all of it will make a bee-line to the rental company's bottom line.
In focusing on increasing rental income, one shouldn't lose sight of the possibilities in "other income." Be careful not to plunge into new "other income" endeavors with objective advice. Although some of these might be wise moves, some of these opportunities could drain your vital resources, energy and focus from rental income - rather than adding to it.
Have your rental business analyzed. Once you are certain of the changes needed and you have a clear vision of how to move the business in the right direction, start to make the changes. Invest in strategies that will have an immediate positive impact on rental income.
Rita Mae Brown, a prolific American writer, once wrote, "The definition of insanity is doing the same thing over and over again and expecting different results."
Are there things that your company is doing that aren't working, and haven't been working for a long period of time? Take measures now to make the sometimes radical changes needed to grow rental income.