We have one rental store in our town. I was told today that in two weeks they are calling it quits. Im devastated. I have a great relationship with the owner. We both help each other. He rents a backhoe to me for one thing by the hour, and I continue to help him keep it rented. WE have worked several jobs. Im wondering if you would have a problem if the rental business dried up in your town . Im going to experience a loss. His will not be good either as hes losing it.
Tim Mooney
Replies
Although I have a pretty large pile of stuff in that building that is supposed to hold cars, I still have to rent from time to time. Yes it would hurt, but it also provides an excuse to buy more toys. Should you consider becoming a partner, and help him save his business? Maybe branch out and buy it? Then you would have all those tools to use for yourself. Only half joking, if you are going to miss him, how many others are in the same boat? Lots of people need to rent something. You already have rental homes, why not rental tools?
Dan
tim.... do i hear opportunity knocking ?Mike Smith Rhode Island : Design / Build / Repair / Restore
A good tool rental place here sold out to a larger chain. The new owners don't stock a lot of the tools that the former owners did. The worst thing is the new hours of operation-----approx.9-5 plus they aren't open on saturdays.
Well Tim the weekend is over for your time zone already, have you given rental tools a second thought, or was I way out of line? Seems like a good idea, maybe, to me. I used to know a rental operator in Seattle, and he does big business, but I don't know if that is the norm. Let us know what happens, it could happen to a lot of us that are in small areas. Here in Kona, we have only one of many things that we take for granted, and should probably try to help more. Good luck
Dan
Dan I apologize . Actually I typed a response and my help knocked on the door before I posted it , and I forgot . Ill type it again .
To Mike and Dan,
My mind did hash that out , but seems to me that mechanics are the key to the business. I'm not very good with wrenches. On the other hand its a lot of money. I figure the inventory expense is a huge one . I have not looked at the books. It takes more collateral to buy a losing business . I think that because the bank needs more collateral, so do I. I bought a store one time that didn't have good books . The banks would not touch it except for a healthy price. I went ahead and bought it and got out two years later by the skin of my butt. I learned then that I must accept the same odds as they do. I went back to houses , and I vowed to stay . But I learned some expensive information . Here are the few rules I set for my self when I was dusting off my butt.
I will stay with what I know .
I will require odds that are always in my favor . [ or I wont do it ]
If I don't succeed in my battles , I will take my war elsewhere. I wont build or buy a spec home in bad times for example. I wont push anything forward because I want to. I only do ventures providing the best money , not because of my feelings .
I didn't have any money when I was dusting my butt. I vowed I would never forget what it felt like . I worked for two years with out a payday trying to turn that business around and lost my investment . I told Boss Hog that I had done worse one time , this was it.
This business has none of my qualifications. Thanks to you both for the thought.
Tim Mooney
tim.. know just what you are talking about.. mechanics is the main reason i never entertained buying a backhoe /dumptruck.. i let my digger keep the old iron running...
actually i've got a guy who would be great with small tools.. but if anything happened to him then where would i be.?
if your labor market has clever people who are good with maintaining rental tools.. then good fit.. if not.. not..
since your business plan seems to be rental proerty income..stick with it..
a tool rental business seems to be the type that will always be in demand, that someone could build into a good money maker, and sell for retirement.. but like you say..you've already got a good business.. so why complicate life, if you need frustration.. take up golf insteadMike Smith Rhode Island : Design / Build / Repair / Restore
Tim, where is this rental co. Ive been thinking about doin this sort of thing for some time maybe I can help. Do you know what kind of overhead is involved? How many sq. ft the building is? Is the building leased? ect ect
Something to ponder.
While big-ticket items, like skip-loaders, represent a mass of capital; the business case for tool rentals is based on a profit stream derived mostly from small tools, like drills, saws, and specialty tools which pay themselves off in 1/2 dozen rentals and in sundries/consumables, like blades, bits, nails, and accessories. A big chunk of this high-profit/high-margin traffic are the DIY crowd.
In our area, and maybe in your's too, the small tool rental business to this demographic is being heavily encroached by Home Depot: they buy the tools wholesale, have a deep reach into repair/warranty backup, have a lot of traffic, and the inventory hit is barely noise.
I'd want to study this closely before making an investment..
Phill Giles
The Unionville Woodwright
Unionville, Ontario
Really I always make large investments without research. ahhh daa "No offense" Do you know if the building is leased of owned? I know HD is more expensive than anyone else in this area. Thats why I shop around as most smart people would unless your going for just conveniance. The trick is to market it right. Do geographics,that sort of thing.
Ib meant demographics, And I am my own mechanic.
Phil, we have no home depot . I agree with you that the smaller items are the best payback. But Ive seen what the people tear up. Its a massive fggure. There are three wood splitters bought last year that have blown engines. He doesnt have any thing on the lot that will dig . The list goes on and on . I would not have the foggiest notion what the repair bills would be . But I do know its very high.
Tim Mooney
Im going too guess that there is or was close to 1 million in inventory. The business went in new . There were four brand new four wheel drive backhoes at 65,000 a peice. Two dozers , 2 bobcats, trailers galore, trackhoe, ditch witches, trenchers, boom trailer, small tractors, etc. A lot of one man powered things like concrete whilry birds, etc. At one time there was about 100 5x6 scaffold sets. The store is full front to back with the small items. 20, 000 sq ft facility that is leased. Clarksville Arkansas is where it is. The only game in town. There is no contractor in this town that has any more than I do. Ive worked for some big out fits that couldnt touch what they have.
Tim Mooney
I feel your pain. Ours closed shop last spring. We are DIY a new house, so even though it may seem like we own every tool under the sun, I know we do not. This was the only rental place in the mountains and we used it all the time.
The biggest loss for us is the bobcats. Where we used to be able to hitch it up on our truck, now the closest place is in Denver and 3500 vertical feet lower. Don't know if our truck is up to that challenge.
Thank the lord they were open after we fired our hack concrete guy and did our own foundation. I don't know how we would have survived.
The owner of the rental shop was a jerk and there were MANY occasions when I wanted to reach across the counter and kill him. I wasn't alone in that either. Every contractor around hated him, but he was the only game in town. He claimed he couldn't make it work, but I think he was just tired of it, or contractors got sick of dealing with such a jerk that they bought their own stuff and stopped using him. Hard to say.