How's business? That's a good question. For some, the answer is "good" as long as customers are coming in, bills are getting paid and the budget is breaking even. In light of certain market fluctuations the rental industry has experienced over the past five years, many of us would agree with this assessment.
But according to Carr Davis, the new co-CEO of Cygnus Business Media, which publishes Rental Product News and many other business-to-business media, we should beware of complacency. Davis says, in a nutshell, if a business is not growing, it's dying.
For the rank and file of a rental business, this might not mean very much. Unless you own the business you're working for, it might be hard to get very charged up over such a statement. But employees have to remember that if the business is growing, that means it's healthy and vital, their jobs are reasonably secure and, most importantly to them, there will be more money to go around.
For the owners and managers out there, the question becomes, "How do I grow my business when it's all I can do to break even?"
There's no easy answer to this since every rental business is different, but there are some constants. For starters, it's necessary to continuously strive to bring in more customers. This might mean tapping into previously undiscovered markets by adding new product lines to your inventory, or it could simply mean more effective marketing to encourage the customers you already have to do more business with you.
Rental business people are not typically known for being highly effective at marketing. This is slowly changing, but there's a learning curve. The first step is making marketing a necessary part of your business plan, not something you'll do when you finally one day have extra time and money on your hands. You will never have extra time and money on your hands if you fail to bring in new business.
Also, there's the old adage that you have to spend money to make money. Don't let your inventory get rundown in an effort to save a few
pennies. Invest in new equipment on a regular basis. The return you earn in customer satisfaction and reduced maintenance costs will be worth it.
And finally, resist the urge to cut rates to get a leg up on the competition. As we've discussed before in this column, lower rates will not result in a significant increase in new business and you will wind up having to rent equipment more often to break even. It's a losing proposition.
So here we are at the start of a new year once again. Why not resolve to grow your business this year. It doesn't have to be by leaps and bounds, as business is a game of inches. Best of luck to all of you.