Rental Industry is Fertile Ground for Growth

The start of a new year is the perfect time to reflect on the current state of affairs and make predictions for the future. With that in mind, following are some of my thoughts and opinions as well as a few of the feelings of my customers concerning rental industry today. To start with:

• There are no signs of the rental industry slowing down or retracting.

• There are no signs of a rental industry “bubble” (super-overinflated activity resulting in almost certain imminent collapse). In other words, I see no signs that the industry has grown so big and so fast that it is in danger (such as the real estate bubble that proceeded our Great Recession).

Barring a major national or international calamity, I feel the rental industry is poised for more growth – and in some areas of the U.S. and North America, tremendous growth. In fact, I believe the combination of extremely low interest rates still ramping up building and remodeling demand, plus construction companies and others that are wiser this time around and won't overspend on ownership of capital equipment, points to an almost ideal scenario for considerable growth potential for the rental industry.

Of course, some rental companies in depressed market areas as well as those in areas that have too much competition could continue to have much more modest gains. Also, rental companies that are clinging to the old ways (such as not having fresh equipment, relevant marketing plans and solid employee systems) are not as likely to participate in the growth experienced by other rental company owners who do have these in place.   

As I did a year ago, I also am going to give a brief glimpse of how some of my customers view the state of their own rental companies and the local and national economies that affect them. Even though as a consultant I am very confidential and don’t even share my customers’ names, I can tell you some of their feelings and thoughts concerning this timely issue.

Taking the good with the bad

My customers have again experienced excellent gains in 2014 and are very thankful for the significant growth. All, of course, have different market areas and widely different amounts of competition, but they all expect 2015 to be a good year indeed.

Many of these rental company owners continue to voice their displeasure with some of our government’s economic policies relating to businesses and the direction the government is taking them. For example, many remain genuinely concerned about the health care law and their belief that it could throw their companies into uncertainty. They tend to feel that fewer anti-business regulations are likely with Republicans controlling both the House of Representatives and the Senate. The new concern, in my opinion, is what new policies our lame duck President will decree with the Presidential powers he has. Certainly, there are a wide range of opportunities for him to mandate changes (without Congressional approval) that could negatively impact our industry.

With that said, these rental business owners are still proceeding to invest in growing their rental businesses in size and internal systems. Again this year, I expect buying will be brisk at the California Rental Association's Rental Rally as well as The Rental Show put on by the American Rental Association. The rental business owners I deal with are very actively pursuing opportunities to become even greater at what they do. 

Another recurring topic of conversation and increasing concern is finding good help. My customers are asking me help them develop more effective interviewing, hiring and training strategies. Some have also implemented a variety of advanced employee motivation and retention strategies. Another of my fairly safe predictions is that the challenge of retaining good people will become one of the biggest issues for rental businesses as the economy continues to improve and the competition for trainable people becomes acute.

But, for now and for the foreseeable future, the general state of the rental industry is strong and getting considerably stronger.