This topic of preparing your business for 2024 is among the most timely and relevant topics because of nationwide economic uncertainties, and the late fall and winter seasons are excellent for researching more efficient methods in every aspect of your business.
To all my clients (and to all of you reading this column), I am stressing the utmost importance of becoming much more efficient with your time, energy, financial and other resources—and cutting waste. Many equipment rental business owners are working far too hard for the relatively meager amount left over after their expenses. Greater efficiency should drive your company’s present and future decisions and activities.
Of course, cash flow challenges are a major concern for some rental companies at this time of year and in some companies’ business evolution. So, avoiding expenses is a natural reaction. While natural and needed in times like these, it is very important to use this time as constructively as possible and begin by doing serious, in-depth efficiency research. Even if you are currently lacking funds or other resources to put toward the implementation of many of the findings of your research, you will have found what to invest in just as soon as you are able to do so.
Here are just a few other thoughts, reminders, opinions and examples regarding what can be done now to prepare for a more prosperous 2024:
- Be certain to “mine” the extraordinarily valuable information from your financials and your computer system. It can reduce costly purchasing and other errors, help to maximize return on investment, help to maintain proper stocking levels, increase customer satisfaction, reduce waste and much more. Used properly, this information can really be a game-changer, but be sure to get proper guidance and try not to have this be a do-it-yourself exercise. Many rental business operators have invested in unproductive solutions for their rental business challenges and opportunities.
- Have your rental rates analyzed. This is the perfect time of the year to start the process as it takes time to do it properly, and you will avoid the costly mistake of making an across-the-board change when the busy season is about to kick into high gear. Rental companies that do across-the-board rate changes run the risk of being too high on some items and far too low on others, so I highly discourage using this approach. Of course, a “too high” rate can cause the frequency of rent to drop to a level that negates the planned revenue increase from increasing the rate. A “too low” rental rate can cause a significant loss of the potential to bring in additional revenue.
- Explore more efficient marketing. Instead of a hit-or-miss approach, dig deep into various other possibilities (including using your computer-captured data). Your research will enable your company to develop more effective marketing strategies and, when implemented, will yield a better return on your marketing investment. For example, there can be huge opportunities in developing a broader set of marketing strategies that target existing customers.
- In preparation for 2024, it is particularly important to become even more efficient with your financial resources. What investments should be considered in 2024? Also, an important part of the process could include a study of what portions of your current operation could be downsized or eliminated. Are there better opportunities to use your financial, labor and other resources?
- It is always prudent to be confident that one has enough liquid assets (and borrowing capacity) to weather the challenges (and to take advantage of the investment opportunities) in the upcoming year.
- Remember, when conducting research, be careful not to blindly copy the strategies of other rental company owners. You and your company are different in many respects from fellow rental business operators and what apparently works for them may be the exact opposite of what you should be doing.
- Get your staff more involved in the initial process of preparing for 2024. Often, after a particularly hectic season, there is a lull that can lead to boredom. Let them know that you value their input in this efficiency quest and how it helps them to experience fewer recurring hassles, etc. Certainly, some of the hassles of the rental business can’t be avoided. But some of the frustrations can be corrected or reduced with proper planning and formal structure.
- Research and then make the determination of which objectives and strategies you will be incorporating either now or when you can fund them, so you’ll be ready to “pull the trigger” on implementing them. The rental companies that use their time to research and develop strategic efficiency management practices in every will emerge stronger and more apt to capitalize on upcoming lucrative opportunities in 2024.