Sometimes it Just Makes Sense to Protect Your Nuts

Fall is one of my favorite seasons. From my home office window I can see our prized Ohio Buckeye that typically produces a significant number of nuts each year. This year I noticed there were fewer and fewer each day.

The culprit was a crafty black squirrel. The squirrel would grab a few each day and return the next day for more. It was a manageable pace for the squirrel. After the squirrel finished, it would just sit and relax and eventually leave. Maybe the squirrel felt like it had all the time in the world.

One day, his pace changed. I noticed the same black squirrel was now frantically grabbing and shelling the nuts, returning time after time. Instead of only taking one or two each day, the squirrel was on pace to strip the tree in one afternoon. So why was this day different from the other days? What was the rush? I noticed a larger, stronger, grey squirrel had discovered our tree. A battle ensued, with the grey squirrel winning. The black squirrel had lost its' tree, which it had probably taken for granted.

In business, and especially in a local or regional rental and dealership business, the founders may find a market that appears to be untapped. Maybe it's a growing community with no existing competitors in that area or market. The owner may feel like the black squirrel, the king of the hill for a time, but there are no guarantees. Just like the black squirrel was vulnerable to outside competitors moving in, so too are business owners.

There wasn’t much the black squirrel could do about its size. Grey squirrels are just bigger. Rental businesses, however, through careful selection, can utilize the power of a modern business system with the same capability of the rental systems used by larger organizations at a fraction of their cost. Often these larger organizations are driving innovation, and following in their footsteps can be cheaper and faster than being on the bleeding or leading edge.

What are those key features that enable the smaller business to compete with the large rental businesses that inevitably show up when there is profit in the wind? Strong customer service and available equipment are not enough. Here are a few thoughts:

? Having multiple systems often creates manual effort and higher costs. Hiring more staff erodes profitability. A proper system allows a new or smaller rental business to grow organically without having to add extra staff because these tasks can be handled by a proper system. After all, “he who has the most profit and time wins.”

? Possibly the most important metric for a rental business is equipment utilization, both financial and time. Having the correct mixture of equipment for your customer needs is one of the biggest profitability drivers. A solid modern system utilizing industry-leading relational databases, allows the owners to analyze market trends and make informed decisions. This is very difficult to do with multiple systems.

? Better control on costs for sales, rental, and service activities. The benefit of this is self-evident.

? Customer relationship management is key to staying on top of customer and prospect demand.

? Accurate supply chain forecasting, especially around demand analysis, ensures you have the right equipment at the correct time.

? Long-term scalability and compatibility with future technology changes provide a solid foundation for long-term company growth.

? Streamlined operations with automation, reducing errors, improving efficiency, and enhancing customer service.

If you identify with the black squirrel in this story, it may be time to up the ante. Surprisingly, the larger rental businesses don’t always have the best systems. Often one of the biggest factors for small business owners is cost, but saving a few thousand at the result of losing hundreds of thousands through loss of market share or other factors as mentioned earlier.

Investing in technology is how the big guys build a platform for growth. Look around and find a system that will allow you to compete and scale your growth to another level, not just for the next year, but ten years down the road.

Choosing one single cloud system that includes GAAP financial, rental, service, and dealership capability means you may never need to change systems again. Don’t be fooled by those who claim to have an all-in-one solution but then require you to integrate to a third-party general ledger and financial system. Yes, the operations function is key to your business, but a strong, real-time financial system is key to managing your profitability and efficiency.

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