Market Opportunities: ‘For Rent’ for Profit
Identify potential, sell to your strengths and establish strict processes to succeed in the rental market.
Lynn Marcinkowski Woolf Managing Editor
he equipment rental indus- try is growing. Revenues are projected to increase 7.3% in 2013, 9.4% in 2014 and 12.9% in 2015, according to the American Rental Assn. (ARA).
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“Dealers should see rental as a growth opportunity,” says Tom Hubbell, ARA’s vice president of mar- keting and communications. “The fi nancial crunch a few years ago had folks saying, ‘I don’t want to own things. I don’t want the capital on my books.’ Ultimately, there has been a shift toward renting as a way of doing business as opposed to just renting for a specifi c task.”
In addition to more business own- ers such as landscapers and contrac- tors choosing rental, rural lifestylers like the ability to rent equipment for special projects. Hubbell says rental can be a natural business add-on for equipment dealers.
“The good thing is that dealers
already have the equipment, the peo- ple to maintain the equipment and the facilities to be in the equipment rental business,” Hubbell says.
Know Your Market Roger Vajgrt, owner of Home Rental Center & Sales, Marshalltown, Iowa, started in the rental business in the 1980s. His father was a home- builder and they would rent some of their tools and ladders. Two rental stores existed at that time in his town of 30,000 and one was going out of business. People in the community started talking about whether Vajgrt and his father would use this oppor- tunity to expand their rental offerings. “I was just going to go pick up
Roger and Laura Vajgrt own Home Rental Center & Sales, Marshalltown, Iowa. Vajgrt’s success strategies for rental include offering a variety of equipment, regu- larly adding new equipment and carrying recognizable brands.
a few things and someone told me about the rumor that ‘Vajgrt was going to start a rental store.’ I talked it over with my father and said, ‘Let’s do it.’” He opened for business on January 1, 1985.
Today, rental accounts for about 80% of his revenues, with about 30% coming from the lawn and garden market, 60% from the industrial com- mercial market and 10% from rent- als of event equipment and supplies. He also sells and services Dixon, Kawasaki, Stihl, Toro and Honda equipment and Kohler and Briggs & Stratton engines.
Vajgrt says knowing his market is one of the major reasons for his rental success.
“I was born and raised here. I watch trends. I monitor phone calls to see what people are asking for,”
8 RURAL LIFESTYLE DEALER SUMMER 2013
Vajgrt says. He pays attention to businesses that are opening and may need equipment to get ready. He even watches “do-it-yourself” television shows to see what kinds of projects might be popular.
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Dealer Takeaways
• Build your rental inventory based on market needs and dealership strengths.
• Establish sound legal con- tracts, rental procedures and a way to monitor performance.
• Check your insurance policy to see if it covers rental equip- ment or purchase separate rental insurance.
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