Eye on Rental

SET YOURSELF UP FOR a Good, Successful YEAR AHEAD

To begin with, I believe that the equipment rental industry is poised for another phenomenal year of growth. Some of the reasons for that belief include construction activity remaining strong, the infrastructure law being enacted and pandemic-related restrictions starting to finally ease.

Some rental equipment companies are going to capitalize on this potential more than others. It isn’t simply a matter of what part of the country your company is in. Maximizing potential gain this year will be influenced by your company’s level of complacency.

Some companies are going to invest more into researching, planning and implementing strategies designed to make optimal use of their resources. Other companies may opt to “ride the wave” instead of pushing forward. There is nothing wrong with either approach, as it’s under the umbrella of the “owner’s prerogative.”

There have been some lean years for many rental companies in the more than 40 years I have been tracking the results. So, when the opportunity of prosperous times comes along, it’s wise to be ready to reap bigger returns.

Here are just a few things rental business owners should consider for a successful year ahead: ■ Instead of just filing your taxes at the deadline, consider setting up one or two tax planning meetings with your accountant. There are options that may help reduce your company’s tax exposure, including when would be the best time to take certain deductions. ■ Consider getting additional expert tax advice from a qualified

local tax attorney. Tax regulations seem to be changing faster than ever, which means you need to get the latest information so you can plan accordingly. ■ When considering the purchase of equipment, remember the importance of making your best business decision based on need and have the tax consequence of your purchase be of secondary importance. For example, it’s not wise to purchase rental equipment exclusively for the benefits of depreciation. ■ Likewise, try not to hold on to equipment too long because of taxes. As you know, having a reputation for having a “fresh fleet” is critically important to success. Again, get expert advice from your local accountant on the tax consequences, but be sure

to use what you know to make the ultimate decisions of what is best for the future viability, growth and profitability of your rental company. ■ Remember to be efficiency focused in your year-end and early new year planning. Even though things are changing rapidly, it’s still very important to have a formal, comprehensive strategic plan with specific steps to take.

We will continue to see uncertainty and wild gyration in the financial markets, inflation and the economy in general. But with uncertainty and market overreaction to daily events come opportunities for those who have solid systems in place in their businesses.

gustavofrazao @ adobe.stock.com

Dick Detmer is a nationally recognized consultant, lecturer and writer with 40+ years of experience in the equipment rental industry. In 2018, he celebrated the 30th anniversary of his business, Detmer Consulting Inc., and his column in Rental. Dick can be contacted at dick@detmerconsulting.com, (309) 781-3451 or by visiting his website www.detmerconsulting.com.

shift work

DIG INTO A DEEPER REVENUE STREAM.

REVOLUTIONIZE YOUR PROFITABILITY WITH R2-SERIES COMPACT EXCAVATORS FROM BOBCAT.

Designed in a powerful but compact package, the E32 and E35 are capable of helping your clients conquer big challenges on an array of jobsites for a barrage of billable hours.

Bobcat is a Doosan company. Doosan is a global leader in construction equipment, power and water solutions, engines, and engineering, proudly serving customers and communities for more than a century. Bobcat®, the Bobcat logo and the colors of the Bobcat machine are registered trademarks of Bobcat Company in the United States and various other countries. ©2022 Bobcat Company. All rights reserved. | 1502