It’s true that I always seem to be optimistic around this time of year, but I feel that 2023 is going to be another good year for many rental companies, despite the mild to moderate recession that some economists say is very likely.
The Federal Reserve is slowing the economy, which means that the rental companies that are not running efficiently may not perform very well.
It is possible that the equipment rental industry will finally begin to benefit from the early phase of the much-anticipated infrastructure spending bill. Also, combined with the cautious capital equipment spending of construction companies, industrial companies (and homeowners) during a potential economic slowdown in 2023 and 2024, it is possible that this will lead to more renting, not less.
It's more important than ever to focus on becoming efficient in practically every aspect of your business. This includes better efficiency in your facility, delivery systems, personnel, rental inventory, marketing plan and more.
To achieve the level of success that you want from your substantial investments of time, energy and financial resources, make proper preparations to start off 2023 right. The wise will make business planning a priority as many rental companies need a much more formal and structured way of operating. Of course, when the economy is strong, even the rental companies that haven’t planned seem to do well.
Going into the uncertainties of 2023 and 2024, it's particularly important to become even more efficient with your financial resources. Even though some economic slowdowns and downturns usually have a minimal negative impact on equipment rental companies (and at times, have had a positive impact), I believe it would be prudent to be certain there are enough liquid reserves to weather a longer or stronger economic downturn.
Every rental company’s situation is different, so be certain to seek the advice of your local accountant. Don’t just stand by and wait to see what happens. There is a lot of craziness in this world so it’s anyone’s guess what’s going to happen to our economy. So, be prepared.
Another benefit of having adequate liquid assets (and borrowing capacity) is that it could help rental companies take advantage of unanticipated opportunities if they present themselves. One never knows when a truly worthwhile investment might appear. Also, it is wise to have additional funds to invest in your employees. The last year has certainly taught us the real value of keeping good people.
One of the huge opportunities for many rental companies for 2023 is to establish more efficient procedures for your entire staff. There are often many ways employees can become more efficient, but it is difficult to break out of doing things the same way, so it may be wise to get direction from an experienced outside rental business consultant to recommend fresh processes and procedures for your consideration.
Try to reduce recurring hassles. Some of the hassles of the rental businesses can’t be helped, but some can be corrected or reduced with the proper planning and formal structure. So, one of your most important initiatives this year should be to develop a comprehensive strategic plan. Too much “winging it” can cause enormous problems and can make your business only marginally profitable. As I’ve mentioned in the past, it is important to the health, growth and future viability of your business to have a more formal, structured way of operating the business. Don’t head down the path of the status quo, rest on your laurels and do nothing. Even if you’re happy with the way things are going today, remember that improvements now are vital to the long-term success of your business.
Planning is always important but with the uncertainties that the next year brings it’s more important than ever. The sooner you start the process of serious business efficiency planning, the sooner you can rid yourself of the many of the unproductive hassles you and your company face. Again, there is far too much mental, emotional and financial energy wasted by some challenges that rental business owners presently face. Transform your company to be more efficient, smoother running, less stressful and more profitable for 2023.
