To most businesspeople outside of the equipment rental industry, the question of whether they're hitting all revenues lines would seem to be really easy to answer. But the equipment rental industry is very far from the norm with respect to rate and revenue consistency. The following are questions designed to make you take another look at some of your procedures and re-examine the things that could add to your bottom line.
- How many credits do you write a year for revenue over-billing? Why?
- Do you not have agreed-upon pricing?
- Was the contract not signed?
- Is time out, time used?
- Do you charge a damage waiver? Why not?
- Is your equipment protected on jobs?
- Just exactly why does your customer not have an insurance rider?
- If a customer has no coverage, why not provide it and profit from it?
- Do you discount rate? If so, why?
- There are many ways to take care of a customer other than discounting.
- Outings
- Dinners
- Events
- Customers remember "low-rate" and rarely can be brought back.
- A jobsite BBQ on a large job costs $500 once a month. Rental companies routinely discount 10 times that amount just trying to keep a customer.
- There are many ways to take care of a customer other than discounting.
- Do you have a concise delivery charge policy? Why not?
- Delivery is a cost which will NEVER go down. If you do not bill equal to your costs each month, you are adding needless cost to your business.
- Investigate third-party haulers for long trips. Taking your delivery vehicles on long runs greatly reduces your ability to manufacture delivery revenue.
- Do you charge environmental charges on your rental billings? Why not?
- Today, there are at least 15 vendors charging you environmental fees on every invoice.
- Your disposable materials costs continue to rise due to influences outside of your control. Not charging for these in some manner is detrimental to your profitability.
The decisions above are tough ones, but these decisions make or break your business. Just 30 minutes per week of attentive behavior to these five items can bring 5% to your bottom line. If you feel you don't have the time to do this, you simply are missing profit dollars falling at your feet.
Questions or comments, contact Mike Farley at [email protected].
