Module 6, getting started in rent-to-rent. We're going to take a look at a series of events and considerations that you and your dealership need to take as you begin to think about starting a formalized rent-to-rent department. One of the first things that needs to happen is there really needs to be a business case. You really need to understand the ins and outs of this investment that you're about to make, and the dealership really needs to have a convincing reason to even be in rent-to-rent. So there's got to be a corporate vision to begin this process, not this idea that the sales department says, hey, we should have a few machines available for rent. That's probably not going to be sustainable over the long term. So I suggest that you start with a corporate vision of why we want to be in the rent-to-rent business. It really needs to be written down, and everyone in the organization needs to understand why are we going to do this. Because without a clear communication, everyone's going to be second-guessing it and maybe bucking it and not cooperating in the way that they need to to help this be successful. So a written vision is real important, and it needs to be communicated across the company. And within this vision, it needs to be a strategy of how we're going to treat rent-to-sell and rent-to-rent, clearly defined goals and objectives between the two types, who's going to manage those things, what's the policies going to be within each of those fleets, the idea of not having everything available for sale, that needs to be part of it. And so how are the departments going to work together? You're going to need to define who's in charge of things and what can take place. So vision and strategy, key components to get started. Then we need a plan, and we've got to put a timeline together with this thing. We've got to put some type of budget, and we've got to put somebody in charge of it. So we need somebody in the organization that can act as project manager that can begin the process about putting all the pieces together to get started. So we need people, we're going to need dollars, and we need a timeline, and we need assignments, and we need to have somebody that helps keep everyone on task and monitor the process. That's a project manager's job. Then we've got to come up with some financial goals for this fleet. In other words, how much money do we want to invest in a rent-to-rent fleet? What type of products do we want to put in there? How broad an inventory do we want to be? Let me first suggest that you start with products that you already know about. If you're in the dirt business, don't go out and invest in 40- and 60-foot access booms because you don't know anything about that. You don't know about the customers. You don't know about maintaining and the maintenance. You don't know about the product support. So stay within the world that you know about. That's the safe play for getting in rent-to-rent. Your investment plan, you've got to figure out what's your personnel cost, if you're going to allocate space within the dealership, how much space, and put a cost to that. You've got to go out and get some information about market rental rates. As you're putting this plan together, you need to have some pretty conservative utilization estimates, and don't go thinking that all your equipment is going to stay out 70% of the time because it's not. It may eventually, but it's not generally going to happen at the beginning because people don't know that you do that. So you're going to have to work hard on putting together an estimate of costs and overhead, and how much capital is available, and is our facility really going to be able to handle what we want to have happen here. Once we've started to put together our investment plan, the next thing we need to look at is the human resources. What you see here is a potential or typical little org chart for a rent-to-rent department. You generally have a rental manager, and he works closely with a rental coordinator. You may or may not have a separate rental salesman. It could be that you're working directly with the sales staff within the company. I would recommend that you have a yard man, someone that can help stage equipment, help receive equipment when it comes back from rent. They can have it ready to meet transport trucks that come in and out. You may or may not have your own transportation in terms of a truck driver and truck assets. I actually recommend third party transport services until which time you've got enough demand to warrant having your full time driver and truck. And you may have a couple of service technicians that do the general maintenance and servicing of the equipment rather than highly skilled technicians. And you probably want your own person on your payroll to handle washing the equipment. Again, we don't want it to go through the service department and pick up a one hour cleaning bill at $90 or $100 an hour. That's probably not going to help us make money. So one of the biggest tasks that you have about starting a rent to rent fleet is understanding the customers. And so I would recommend this as being a sales project for your sales team as well as the rental manager. And the way that this works is you've got to talk to all of your existing customers. You've got to talk to all of your existing customers and you need to understand what are the processes that they use each and every day to do their work. So if they happen to be a site contractor or they happen to be a utility contractor, electrical contractor, whatever their trade is, your team, your salesman and your rental manager need to have enough understanding of what kind of equipment they use all day, what do they do with it, what are the capacities required, bucket sizes, lifting capacities, those kinds of things. And then you have to understand, do they own most of that equipment or do they rent it? And if they rent it, where do they get it from? And so that's starting to look at customer expectations. And so we're trying to identify what they use and where they get it from. Then we're trying to identify any type of pain points that they may be currently experiencing. And that could be their own fleet. Maybe it breaks down on them, it's not as reliable as it should be. Maybe they're using a current supplier and those people are inconsistent. Maybe they're not very good with their billing procedures. Maybe they don't have very good field support. So in the survey of the customers, as you're talking to them, you're trying to identify potential opportunities where we could replace an existing supplier. But you have to listen carefully to be able to hear the customer describe those things. And then once you have heard an opportunity, we need to zero in on that and come up with a solution where we are offering a machine, whether this is something that is a special rate for somebody or maybe you're giving them a particular package of equipment to solve a problem. Maybe you're offering them services that they're just not getting right now. Any of those things are a potential winning solution. And so once you've figured out what that is, then you go back and you promote that to the customer. And those are the types of things that help us figure out what the customers are looking for. And then we go back and measure our results and we see are these people listening to us? Did they come and rent from us? Because we thought we had solved the problem for them and if they did respond, then we continue to look for more customers just like them and we go around the circle once again. If they did not respond to us, we go back to those same customers and we have another discussion with them and say, I thought I heard you say that you were having problem with this and we offered this solution and we haven't seen any activity. Did I miss something? Maybe it wasn't as big a problem as you interpreted it to be or maybe somehow our service broke down. So this is an ongoing cycle of staying in touch with your customers and this is the kind of activity and direct feedback from customers that's going to help you build a rental fleet.

rent-to-rent department

business case

corporate vision

strategy

financial goals