The equipment rental industry has consistently expanded over the last couple of years and 2019 is going to be no different. However, with changing trends and rapid growth, several new rental industry challenges have come the way of rental businesses.
In order to keep up with the times, equipment rental owners need to understand what awaits them this year. Carefully watching changing trends and competitor strategies are going to help you stay afloat this year so be ready to pull up your socks!
Here are the rental industry challenges that await equipment rental businesses this year:
1. Going above and beyond customer expectations
Businesses are finally becoming more and more consumer-centric, which is great. But with companies offering greater value to customers, customer expectations continue to rise. This ultimately means that you really could lose them in the blink of an eye.
Even with impeccable customer service, if your equipment can’t cater to a customer’s schedule, you will lose them. To really keep your customers happy, you need to be able to offer high equipment availability along with excellent customer service. They have to go hand in hand.
Furthermore, having an in-depth understanding of customer activities and needs is going to be critical in delivering top-notch customer experience. Be wary of seasonal changes in customer needs and carefully track rental demand (snow plows are popular during winters while excavators are frequently rented out during warmer months).
You probably already know this last one but we’ll mention it for the sake of completion: Online portals are extremely essential in providing a holistic customer experience. With online customer portals, customers can access the entire rental catalog from their phone, check their own equipment portfolio, and view all current and past orders. That’s impressive functionality so don’t slack off in this department.
2. Taking charge of business complexities
A lot goes into running a rental business. You have to periodically run analytics and generate rental quotations. You have to manage your equipment lifecycle, fleet, cash flow management, maintenance, and even your rental desk.
And it doesn’t stop there. You need to sell, quote and procure equipment along with overseeing scheduled work orders, tracking financials, and overseeing staff performance.
All this can be quite a handful, which is why one of the major rental industry challenges is taking charge of the vast variety of business processes and functions. And in order to do it all, many companies often tend to complicate things further for themselves.
How is that? For multiple problems, you probably integrated multiple systems with your processes. This means more trouble as it results in complex integrations and overwhelming data which doesn’t offer good visibility of all equipment throughout the equipment lifecycle and across the business.
Don’t spoil the broth; look for a cloud based solution does it all! Asset tracking systems are good at handling multiple processes like asset tracking, equipment lifecycle management, cash flow monitoring, and much more.
3. Maximizing the utilization and resale of your equipment
Your equipment rental may be successful at offering parts, maintenance, service, and repair at a pace that meets customer demands. But as your equipment rental business grows, you should be able to predict market demand, maximize utilization (days on rent), and manage the changes in your cash flow profile.
At the same time, you need to make sure that your equipment is serviced on a regular basis in order to maximize the resale value at the end of its useful life.
You can meet this challenge with the help of rental management software that provides you with real-time visibility of your service records, assets, accessories, and parts. This in turn aids in minimizing equipment downtime which eventually improves utilization. The software solution can even track your warranties to reclaim warranty-related costs.
4. Balancing your portfolio and cash flow
Renting can generate a lot of revenue, especially if all of your fleet is consistently rented out but that is an extremely unlikely scenario. You’ll probably still have equipment that spends more time in your inventory than with a customer. This is a problem since idle items still incur a lot of overhead costs, majorly stemming from maintenance and warehousing.
This means that idle items directly impact your cash flow. To deal with this, record the ownership costs for each piece of your equipment and compare it with the profit it brings your way. If you are receiving positive cash flow from it, it’s a good fit for your company. Not so much otherwise.
Weighing the expenses and profit side by side will help isolate equipment that really should be disposed of. Remember that the way to success requires journeying to a well-balanced rental portfolio. This will be useful in planning financial flows and catering to future use. Using software for this purpose can help simplify the process and also provide you with the benefit of asset tracking so you always know the whereabouts of your equipment along with their cost.
5. Forecasting equipment repairs and servicing
Nobody wants their equipment to fail at the last minute. And it most certainly will if you don’t plan maintenance for your inventory ahead of time. Scheduled maintenance helps prevent sudden breakdowns, minimizes costs, and enhances customer service.
Without a streamlined maintenance structure, you will be left to haphazardly repair and service equipment that is placed God knows where– while simultaneously figuring out various configurations, part compatibilities, capacity constraints, and SLAs. Sounds quite daunting, doesn’t it?
If you schedule all your maintenance activities ahead of time and in correspondence with equipment availability, you’ll be doing your company a huge favor. Always plan ahead of time and carefully track equipment location and availability so maintenance is never delayed.
Industry growth doesn’t guarantee success. All rental companies need to prepare themselves to face the rental industry challenges that come their way so they can hold their ground in case of calamities.
Study the market and the trends as well so you are well-guarded against these rental industry challenges. It is only after overcoming these challenges that you will be able to increase your profit margins and revenues.
Don’t contend with equipment rental challenges alone; our rental management software helps companies manage their rentals, orders, and customers across all locations. Unlock growth with EZRentOut: try us out for free!