Recently we came accross this article from the UK.  It is well worth reading!

It promotes 10 things you can do to improve your marketing in tough times!

How to thrive during a recession by Mick Spain (click on bold text to go to the article)

One point he made really struck home!   The attitude of the company and its people.

Coming from a sports obsessed nation, the analogy is powerful.  When watching two teams battling it out on the field, picking the winner sometimes is easy – body language will tell you who is going to win.  Often well in advance.

The team that will ultimately lose, will let their heads hang, they won’t do those extra things for the team, they will watch the scoreboard and they become obsessed by decisions or circumstances that go against them.

Constrast that to the team that is winning or going to win.  They ignore the things that are against them like dodgy decisions, a bad bounce or even the weather. Ie they ignore the factors beyond their control.

Instead they focus on doing the right things, the extra team things and they remain positive.

We market extensively and speak to many hire and rental companies.  It is surprising the response differences you get.  Some managers you speak to sound defeated it is in their attitude  all they want to talk about is how bad the economy is.  A factor beyond their control.

Alternatively you speak to others, who are focussed on doing things to make their businesses better.  Yes they accept their is a downturn, we all do, but like us they accept that it is beyond control. Instead these companies want to talk about business value and ideas to make their businesses better.  Often they are the most pro-active readers of this blog site.

So like watching a sports game, it is easy to pick the winners, by watching  or “listening” to the bodylanguage (attitude).

Downturns are a natural cycle in business life, it will ultimately pass.  Whether you as a hire or rental company survive to see the upswing, depends on your attitude more than anything else.

The author, Mick Spain made the comment – if you think you can or you think you can’t – you are right!

It is the same adage my father has recited to me for over 45 years.

So if you are committed to success and would like to discuss business improvement ideas for your hire or rental business, then please contact us via our web site www.makinglifeezy.com.au

]]> http://www.hireezy.com/index.php/218/predicting-the-downturn-winners-in-the-hire-and-rental-industry/feed/ 0 http://www.hireezy.com/index.php/159/why-tough-times-should-benefit-the-hire-and-rental-industry/?utm_source=rss&utm_medium=rss&utm_campaign=why-tough-times-should-benefit-the-hire-and-rental-industry http://www.hireezy.com/index.php/159/why-tough-times-should-benefit-the-hire-and-rental-industry/#comments Sat, 16 Jan 2010 22:44:16 +0000 HireEzy Research http://blog.makinglifeezy.com.au/?p=159 During the tough economic periods it is worth revisting your business value as a hire or rental company, no matter what sector you service. The business value of hire and rental companies is actually at its highest during tough times, particularly those servicing the business to business sector.

So what is the business value of the hire and rental industry?

Well here are five good reasons why companies should hire from you.

Cash flow saving
Companies who elect to hire or rent equipment from you are able protect cash reserves. Rather than spending valuable cash on buying items up front, your clients can effectively defer cash outlays through period payments for the hire or rental items. If timed correctly by your client, their receipts from their customer payments from the project can help fund the on-going rental or hire payment (obviously for medium to long term hires). For those of you who have Corporate clients, hiring or renting is often perfect. Many corporate clients have capital budget constraints during a downturn. Therefore hiring or renting can be an ideal way for some corporate clients to get what they need, as hiring or renting is considered to be an operating budget expenditure. Operating budget expenditures are often delegated substantially down the corporate ladder.

True costing
For many clients hiring or renting actually aids their project costing, in turn aiding them in improving their profitability. Hiring or renting is a known cost. Whereas often supplying the equipment from their own internal assets does not enable them to determine the actual cost of the item. Many don’t know the actual depreciation (replacement) value to be assigned, the actual cost of servicing and storing the item. It may sound trite, but for many companies true costing is a major issue.

Risk reduction
Buying items also increases risk. How long is the item they buy going to be used for? Will it be needed again? Should we buy something that may last for the project duration or something that we can be used again? What happens if the item breaksdown? How long before the manufacturer can get a replacement, this can impact the project and hence cash flow. Hiring and renting eliminates these concerns.

Servicing costs and compliance
Related to the risk element above is the need to ensure that the item is correctly serviced and maintained. Many hire and rental companies, especially in the construction hire and rental, eliminate this concern by providing on-site servicing and service histories. If your hire system doesn’t do this then you really need our HireEzy product.

Minimizing Assets
Assets require maintenance as described above both when in use and when stored. This costs money, in fact in Logistics the average assigned value to store, maintain, insure and account for an item is usually 35% of its cost, depending on the equipment. Furthermore, many listed companies and larger companies use Return on Assets as a performance measure. The more they hold in asset value the greater the revenue they need to generate in order to meet this performance figure. Hence hiring or renting can actually aid them in achieving there performance targets as the hired or rented item is not considered an asset.

For many people these statements above will be blinding statements of the obvious. But are they so blindingly obvious to your customers? Renewing and reminding them of your value proposition is often a good activity in these times. Especially when many of your clients are going to look at the costs they spend with you on hiring and renting. Many of your clients will just see the dollar figure and not reflect on the benefits you provide.

If you are a party rental or party hire company the following article provides more specific how to information on this subject.

Making Life Ezy are the makers of HireEzy the world’s most innovative hire software and rental management software. We are committed to helping our clients grow through the provision of business value, such as the information provided in this blog.

USA Manufacturers Looking to Bring Manufacturing Back from China?
A report published in the Industry News Weekly cites research by Archstone Consulting that over 90% of USA manufacturing companies surveyed are considering bringing back manufacturing from China. The full report, found by clicking either Industry News Weekly or Archstone above is worth reading.

The study revealed that in the last three years, manufacturers have seen a significant increase in costs related to off-shoring manufacturing for export purposes rather than in country demand, which include:

Ocean freight costs have increased 135%,

Chinese manufacturing wages have risen by 44%.

Assuming this trend also applies to Australian, Canadian, New Zealand and United Kingdom manufacturing companies, then it would be reasonable to assume that all countries could benefit from a slight rise in construction activity. Construction activity would be driven by the need to build new factories, adjust or modify existing ones. This is turn will aid the construction hire and rental sectors.

Change in Construction Union Industry Sector Co-operation
Another article recently caught our attention, and it relates in part to the previous section. The USA Iron workers have created a new model called IMPACT. Amongst the many aspects of the model, is the apparent fundamental shift in attitude, that Unions and their members should be the best pushing the bar for increased ironworker performance, productivity, quality and safety.

This change is important not just in the context of the prospects of increased construction activity due to manufacturing returning but also the construction work pipeline arising from the construction sector stimuli packages in Australia, Canada, New Zealand, UK and USA. A more co-operative construction sector benefits everyone, companies, contractors and unions alike.

Any lift in the construction sector will benefit the construction hire and construction rental industry – our clients. News such as both of those cited above are welcomed and are hopefully indicators of a brighter future for all. HireEzy the construction rental and construction hire software of choice.

Many projects announced in the Stimulus packages had lead times for tendering, design and planning stages, especially the larger projects.

The Hire and Rental industry is critical to the efficient delivery of these projects, as explained in previous post.

In essence the industry is critical because it can efficiently deliver equipment, resources and solutions to the companies delivering the projects with out the need for such delivery companies to use critical cash reserves to purchase equipment.

Stimulus Packages Size and Investment

During the earlier part of 2009, Governments in the USA, UK, Australia, New Zealand and Canada  announced significant local stimulus packages.   A major portion of this investment has been directed towards Infra-Structure projects designed to kick start the construction sector.

The numbers are staggering!!!

Specific details on the USA package

Whilst some major projects in each country will have lag times as the tendering, design and planning stages are processed.   However many of the government initiatives have been directed towards accelerating numerous small projects.

These projects will be small, numerous and dispersed creating a demand on tools and equipment. Construction, Tool, Scaffolding and Temporary Fencing Rental and Hire companies may well be able to benefit from this demand. In order to meet the requirements of numerous competing projects, many construction companies may not be able to efficiently allocate and re-locate in-house tools and equipment.

Hence increasing demand for more construction hire equipment.

A second related issue is that in some countries, banks are forcing property developers to expedite projects or lose their line of credit.  This has had a flow on effect to Town Planning departments, where many are under heavy workloads to meet expedite approvals.

Small Projects Flow On

Some Western Governments have handed our tax incentives or cash hand outs to stimulate demand.  This could contribute to a growth in the home repair and maintenance market. Three factors may potentially contribute to the growth in this segment:

1. Reduced equity in the home due to the fall in house prices will mitigate against many people borrowing against their house value to undertake major projects.
2. Increased disposable cash from tax cuts and interest rate cuts may assist in home owners undertaking minor projects and repairs.
3. The prospect of a greater focus on activities with friends and families, which includes home repair activities, again discussed in the previous post.

If you are considering improving your marketing to these segments Construction, Tool and Temporary Fencing then using HireEzy’s ( hire software, hire management software) inbuilt marketing tools will aid you substantially. For more information go to www.makinglifeezy.com.au