One of the bigger issues I've been asked to address is where the industry is headed now that one of the largest equipment rental companies is acquiring another very large rental company. How will smaller rental businesses compete? As we examine this very important and complex issue, it's necessary to state the obvious: United and RSC would not have struck this deal unless they both strongly believe it will put them in a better competitive and more profitable position. So, with that in mind, is there anything smaller businesses can do to ensure their foothold in their market?
On the one hand, "the strongest are becoming stronger” trend is not coming at a good time for some independently owned and operated rental business owners who've struggled not only through some terribly rough years recently, but who also have their sights on handing off the reins of their business to the younger generation. Of course, change can bring great opportunities, and I have seen many examples of small rental businesses seizing huge opportunities in the wake of huge competitors entering their market.
As I discussed in my column in the recent February/March issue, it's important not to just stand by and wait to see what happens. Once you see what happens, it's too late to do anything about it. It's best to be proactive.
Invest in training, education and efficiency to sharpen your edge
There are so many different ways to strengthen your company’s foothold in your market. Of course, the ones best suited to your particular needs depend on a wide variety of factors. So, be sure to get professional, objective advice from a qualified expert before you make any final decisions concerning your best course of action. While advice specifically tailored to your individual business is ideal, here are a couple of general possibilities that should be considered by smaller, independently owned rental businesses facing the prospect of having a more formidable competitor in their local market.
More management education (such as leadership training) is almost always needed and is a great investment when properly planned and implemented. How do you rate the leadership skills of your managers? Many managers are not well trained in many of the basics such as personnel management, planning and marketing.
Another education-related option is the preparation of your entire team to really excel in the area of customer relations and rental salesmanship. Some smaller rental businesses are not as dominant in these subject areas as they think.
Also, make sure your facility looks professional and your rental fleet is in great shape, both mechanically and visually. Some independently owned rental businesses have tired-looking facilities and equipment (and this is not the way to compete successfully with any type of rental competitor).
It would also be wise to invest in making your business and staff more efficient. Have your business analyzed to determine what can and should be done and then make this one of your priorities. Not enough emphasis is placed on the vitally important topic of efficiency. Just because you might have dramatically reduced your staffing level during the “great recession,” it doesn’t mean your company is as efficient as it needs to be.
In conclusion, “consolidation” in our industry is not over and although some would lead you to believe this consolidation is in the best interest of those yet to be consolidated – it isn’t necessarily so. Usually there are both net winners and losers. Be strategically proactive and you’ll likely be in the net winner’s category.
