Regular and robust performance analysis is essential for the success of any business. In today’s data-driven environment, small and medium-sized rental businesses can give themselves a competitive advantage by making efficient use of key performance indicators (KPIs).
They can use this information to identify patterns and areas of strength or weakness to optimize costs and make informed business decisions. However, with an avalanche of data available, the bigger question becomes how to translate it into actionable information?
Customize and distill data with rental software
Start with collecting reliable error-free data. Cloud-based rental software provides real-time information on your business transactions. It enables you to track and maintain a complete history of your rental items and orders. Use the automated and updated information within the system to set up a customized dashboard. Monitor key business KPIs that are most relevant to your business and get an instant snapshot of asset-related activities.
You can also specify a time period to access KPIs. For example, if you have been running a promotion, had a slow rental season, or simply want to view business performance for the past three months, set the desired time slot and access information with a single click.
This convenient dashboard consolidates and highlights your best sellers, provides updates on business performance, and calls out pending or overdue tasks and orders. Use this actionable information to create attractive customer offers, make smart procurement decisions, cut costs, and grow your business.
Here are some key business KPIs that can help you extract maximum benefit from your rental assets.
Rental inventory is often the most important investment for small to midsize businesses. Once you have invested in rental inventory, you need to monitor its ROI. You must track whether your assets are being utilized on a regular basis and get an accurate assessment of demand and consequently revenue generation.
The Asset Utilization metric can show you the total checked out time of your items as a percentage of total available time. Want more details? Run reports in your rental software and filter information based on asset groups, locations and more. This enables you to identify locations and/or assets that are performing well or hone in on areas that require help. For example, if you run an AV rental business you can create a report and apply filters to ask very specific questions:
“How much AV equipment belonging to the subgroup ‘Video’ was checked out in the Annapolis office in the last six months?”
If a lot of expensive video equipment is lying idle or not rented out frequently, you can use this information to make smarter purchasing decisions. Likewise, you can also retire or discard assets based on the duration they have been rented out for.
Revenue generated from orders
Rental businesses need to maximize revenue by getting more orders on their assets or at least maintain the frequency of their current orders. Manual tracking of assets makes you vulnerable to costly mistakes. For example, your records may show that you have rented out AV equipment for a concert but some of the items are still sitting in the warehouse — not earning any money.
Utilize the real-time updates on the order status and earnings of your rental equipment. Set up relevant KPIs on your dashboard to get the dollar value of your orders. From bookings to completed orders you can customize your dashboard to understand what kind of revenue your rental equipment is generating.
For example, you can set up a Booked Orders KPI card on your dashboard. Now you can look at the total earnings of orders that are in the booked state for better forecasting as to what revenue they will be generating from future bookings. Likewise, view the total earning of rented out or completed orders to get an instant snapshot of revenue generated.
Cost of service and maintenance
Want to provide your customers with top-notch equipment without any delays or confusion? Ensure that your assets are always in the best working condition. This will give you satisfied customers, as well as smooth workflows, asset longevity, and consequently lower long-term costs.
Use the Total Cost of Services metric to assess the overall condition of your inventory. Define a time period and find out the dollar value of total services and maintenance costs you incurred.
Now you can decide whether certain equipment is costing you too much in service and maintenance. Simply view the maintenance history of an item to get the full picture. Maybe it is not being serviced consistently, or too many team members and resources are assigned to it and it would be more cost-effective to simply retire it.
You can also use this information to make smart purchasing decisions. For example, an old piece of machinery such as an excavator or a digger may be costing more in maintenance and bringing in less rental income. You would be better off retiring it and investing in a new machine for gainful returns.
Optimize purchase decisions
Overstocking on inventory that is not moving just means idle items lying around at your warehouse. Use the data within your rental software to optimize purchasing decisions. Determine how much you need to buy, and from which vendor, to avoid unwanted cost.
Conversely, set low stock alerts so you know exactly when items are dipping below the required need. Display the Low Stock KPI cards right on your dashboard so you can be alerted on time. Now you are optimizing your spend by replenishing supplies when needed. At the same time, you can ensure that you never have to lose an order due to lack of supplies.
Access visual data to get information at a glance
Consuming and making sense of large amounts of data is always challenging. You can save yourself time and hassle by adding relevant charts and graphs to your rental software dashboard. Keep track of your top items, check out frequency, item growth, and more. With this easily digestible information on equipment usage, current trends, and customer preferences you can more accurately predict future opportunities.
Track key business KPIs with the right rental software
Stay on top of your financials and get instant insights into the health of your business via a customizable dashboard. EZRentOut is a cloud-based rental solution that offers businesses seamless rental management. It also comes with a host of other features like asset tracking, maintenance management, a customized webstore, and much more. Try us out today!