Utilizing Your Existing Systems
The rental industry has certainly experienced some challenges over the last 18-24 months. Unfortunately, we see too many rental store owners managing their business through these challenging times with only the most basic of information. Time and time again, we see rental store owners take a look at their checkbook, take a look out into the yard or warehouse, then maybe see what’s in receivables and call it good in terms of data analysis. In 2009, many of these types of rental operators took a direct hit from an economic storm for which they were totally unprepared. They didn’t see it coming because they were not tracking the key financial and operational measures of their business.
The irony is that most rental companies have all the information they need in their accounting and rental software; they are just not utilizing the data. Sometimes it’s as easy as adding a report writer function to existing software. Alternatively, most rental and accounting software allow for downloads into Excel worksheet format. In an Excel worksheet, reports and data can easily be compiled, sorted, formatted and summarized. Just as a publicly traded company has an obligation to its shareholders to utilize its existing resources, rental business owners owe it to themselves, their families, their employees, their customers, their vendors and their lenders to use the resources at their disposal.
We are advocates of the principle “Know Where You Stand.” We believe that rental store owners should have certain key data at their fingertips on in concise, easy to read and use report formats on a daily, weekly and monthly basis. We take for granted driving a car with an instrument cluster laid out in front of us. We can see certain measures at a glance: fuel level, RPM’s, engine temperature, speed, mileage, etc. In addition, your car’s instrument cluster has warning lights to alert you if something is going wrong: low fuel, engine overheating, etc. The same type data should be readily available for your business. Variances in key metrics of your business can serve as early warning lights.
As the manager/owner of your rental business, you have a multitude of responsibilities: equipment maintenance and availability, employee matters, customer relations, etc. We are not advocating spending inordinate amounts of time pouring over reports, in fact quite the contrary. With a quick look at a set of clear, concise reports, you will “Know Where You Stand” and these metrics will become second nature to you. At Rental Acquisitions LLC, through our consulting services, we help our clients develop these reports and set specific parameters for appropriate monitoring for their business. Most importantly, we educate our clients in how to use and implement this data into their operations. We will be discussing some of these key metrics in future posts.