Building a revenue base is far more complicated than it might initially appear. Let's look at some of the considerations you should make:
Where are you today? - Revenue within the rental model can come from many different areas. Rental alone can provide a base of daily, weekly or monthly revenue. Service, parts and merchandise can add other streams of profit. What profile does your business have today? Are all of these revenue streams profitable? Most importantly, what are the revenues that can best serve you and your customer base?
Who is the customer? - Each area is different, as is each rental business. You, as the operator or owner of this rental business, must determine who your customers are and their requirements and what opportunities these afford you. Never be afraid to seek out customers who have unfulfilled needs. Establishing a revenue base that simply does the same thing as all of your competitors never works - you must differentiate yourself.
What is the talent/skill set of your staff? - Gathering the information to the revenue opportunities available to you is only the first area of consideration. Once you know this, you must then assess the talent of your team. Remember, your success depends on how well your business mirrors and addresses the needs of the customer, not vice-versa.
Revenue does not equal profit - Certainly increased pure revenue is never a bad thing, but you need to establish the revenue streams that bring dollars to the bottom line. Make sure as you identify the growth areas of the revenue base that you do not increase the associated cost base by the same amount.
Summation - Many decisions go into the revenue model of a rental business. You, as the leader, must be constantly finding ways to increase the base profitably so your business flourishes through the tough times ahead.
Questions or comments? Contact Mike Farley at [email protected].
