The "state of the industry" is a theme that's heavily discussed of late, especially at The ARA Show last week in Anaheim, CA. With that in mind, here’s my take on the topic.
I fear that some rental business owners and operators might be giving in to what seems like an overwhelmingly negative frenzy by the national media (some of which might have a political bias or agenda) and becoming overly cautious with their business decisions as a result. My advice in response to this is that it's wiser to concentrate more on what's happening in the communities you serve. I expect that later this year will bring plenty of economic scare tactics used by politicians who are running for office in 2020.
Perhaps surprisingly, I believe it's very possible to remain successful in your rental business almost no matter what happens through careful preparation. There have been plenty of uncertain and troubling times for our nation over the last several decades. But, our country’s culture of success, the unique nature of the rental business, and the tenacity and hard work of the people who own and operate independent rental companies, have all combined to make rental businesses very successful and super resilient. It certainly takes courage to invest in upgrading your rental business when there are so many economic, political and global uncertainties.
I believe 2019 will prove to be known as another pivotal year for significant bold initiatives by forward-thinking independently owned and operated rental companies. Recessions are inevitable, so it’s just a matter of time before the next one happens. The key is to put plans in place now to cope with and perhaps even take advantage of economic downturns when they happen. In my opinion, the smaller independent rental companies can have advantages over the large national chains during a recession. But you can bet the large national chains have plans to deal with the next economic downturn as well.
Again this year, barring a major national or international calamity, I believe the rental industry is poised for more growth. In fact, I believe the combination of relatively low interest rates, low inflation, continued building and remodeling demand - plus construction companies and others who this time around are wiser and won't overspend on the ownership of capital equipment - all point to considerable upside potential for the rental industry.
Of course, some rental companies in depressed market areas, as well as those in areas that have too many competitors, might likely continue to have much more modest gains. Also, rental companies that are clinging to the old ways (such as not having fresh equipment, an appealing visual image, relevant marketing plans and solid employee systems) are not as likely to participate in the growth experienced by other rental company owners who are more modern and forward thinking.
With that said, I see that wise, progressive rental business owners are still proceeding to invest in growing their equipment rental businesses in size and internal systems. The rental business owners I consult with are very actively pursuing opportunities to grow and become even greater at what they do. Huge opportunities can be missed by procrastination or being overly cautious.
The rental industry is still poised for more competition. You are not alone in seeing the benefits of the equipment rental business (although they might not see the challenges you face). Some professionals in other types of businesses (which will be hit the hardest in the next economic downturn) will become attracted to the idea of starting an equipment rental business and might become a competitor. It's never wise to rest on one’s laurels or be overly conservative.
So, remember to make well-researched, wise growth decisions even though there is plenty of negative noise being made on the national political/economic scene. In my opinion, for now and at least for the remainder of 2019, the general state of the rental industry is strong.
Keep in the mind the importance of remaining positive and focused on moving forward. This philosophy will serve you well in good times and in not-so-good times as well.
