Taking Advantage of a Rental Opportunity

For those in the professional cleaning industry, renting equipment can be a strategic and attractive financial option -- especially now, with the current economic conditions

For those in the professional cleaning industry, renting equipment can be a strategic and attractive financial option. And especially now, with the current economic conditions impacting so many industries, renting equipment on an as-needed basis is looking more and more appealing.

This is a change from decades past. Historically, the professional janitorial industry (jansan) has been considered "resistant" to recessions. As with many other industries, it would boom during strong economic times when most businesses were doing well and new buildings were being constructed around the country. However, when economic clouds formed, growth in the professional cleaning industry typically tapered off but rarely significantly declined.

However, this time manufacturers and distributors in the jansan industry have noted some significant cutbacks. Further, many building service contractors (BSCs)-which typically have been even more "protected"-have been impacted directly as well. They report that their customers have requested price reductions, have been asking them to reduce cleaning frequencies to cut costs, or are actively taking bids, looking for BSCs that can promise to do the same quality of work at a lower cost.

Because of this, many BSCs believe this is no time to purchase a new floor machine or carpet extractor, which can cost several thousand dollars. Even leasing the equipment, some contractors believe, may prove to be too binding and ultimately an expensive mistake. That leaves renting the equipment on an "on-call" basis as about the only option available to provide the type and quality of service the client wants without making a major financial investment.

The Giant Sleeper: About the Industry
Many in the equipment rental industry may not fully understand the jansan or professional cleaning industry, which could be thought of as a giant sleeper. One reason for this is that most cleaning is done after hours, so cleaning work and those that perform it are little noticed by building occupants unless there is a problem or some type of building emergency. Also, although the importance of proper cleaning in helping to protect public health and the environment is becoming more acknowledged by the public, historically the industry has been somewhat underappreciated.

Further, in the past, the size of the industry has been misunderstood or undervalued. Although there are some well-known companies in the professional cleaning industry, for the most part it is still made up of thousands of mom-and-pop-size businesses-the heart of the industry. However, put together, the jansan industry is valued at well over $50 billion, and some experts place its value closer to $100 billion, making it a huge industry by anyone's standards.

Because of its size and needs, those in the equipment rental industry would be well advised to pay more attention to the professional cleaning industry. And many BSCs may not even be fully aware that they can rent professional cleaning equipment instead of leasing or purchasing. Marketing this opportunity to cleaning contractors and taking steps to meet their business needs could result in one of the bright spots for the rental industry as it helps BSCs now and into the future.

Why Would a BSC Rent?
Typically, as a BSC's business grows, he or she will lease or purchase cleaning tools and equipment to replace older equipment or to meet the needs of new clients. The contractor will also, as a good rule of thumb, have a base of equipment inventory that can be used for most current and expected cleaning applications.

For many, renting is not viewed as an option, often because they simply are not aware that the option exists, have not had a need to rent, or do not fully understand its benefits. So why would a BSC rent cleaning equipment?

A key reason, as mentioned earlier, is the economy. Even many comfortable and growing BSCs are squeamish about making large or long-term purchases. However, there are many other reasons a BSC would select renting over purchasing or leasing cleaning equipment. Among them are these:

  • Deal with emergencies. Restoration equipment, such as industrial wet/dry vacuums, air movers and purifiers, extractors, and floor machines may all be called in to clean up after floods, fires, and other emergencies and unexpected events. Some of these tools are costly; others are only used on an occasional basis, making renting a strong option.
  • Meet temporary needs. Most BSCs provide general cleaning services. However, from time to time, more specialized, nonemergency services are requested that require particular types of machines not used on a regular basis. Instead of purchasing, it is more cost effective to rent these tools.
  • Improve cash flow. It is estimated that as much as 90 percent of a BSC's expenses are labor. Renting equipment helps BSCs meet payrolls and pay for rentals out of future dollars instead of savings.
  • Try before buying. Rental car agencies know that a large number of their rentals are to people considering purchasing a similar car. The same can be true in the professional cleaning industry.
  • Floorcare and carpet care equipment can be costly and the features and benefits confusing. There are scores of manufacturers producing a wide range of equipment with a variety of options and accessories. Because of this, many BSCs will rent a machine for a short period of time to see if it meets their needs and preferences.
  • Save money. The cost of owning and leasing can be more expensive than renting. Maintenance, taxes, and even hauling the equipment from location to location instead of having it delivered where needed all make owning and leasing more expensive.
  • Enjoy tax benefits. In most cases, rental equipment is a fully deductible operating expense that does not involve depreciation or any other complicated tax formulas.

Working with BSCs
The best way for equipment rental companies to take advantage of the opportunities of working with BSCs is to better understand the needs of cleaning professionals. Because time is indeed money for cleaning contractors, equipment that is easy to use and helps them perform their cleaning tasks fast and satisfactorily is of utmost importance.

Rental company owners should take the time to investigate the many different types of tools and equipment available as well as the jansan manufacturers that produce them. Selecting durable, high-quality equipment from reputable, well-established manufacturers will result in a loyal customer base of BSCs that can only grow.

Rob Godlewski is vice president of marketing for Powr-Flite, a leading manufacturer of professional cleaning equipment based in Fort Worth, TX.