Optimize Your Equipment Utilization to Maximize Rental Profitability

Fleet utilization is a top priority for rental companies across the industry. It’s important to have the right rental equipment available to never miss a rental or sale. This includes ensuring equipment is always serviced and returns are processed as quickly as possible. Along with these two vital elements, there are a few other factors to consider that can also help you increase the profitability of your equipment rental company. Here are a few common challenges we encourage you to consider.

Start with figuring out the specifics of what your customers need

Having the correct mix of equipment to match your customer requirements is a critical factor but it is important to remember that requirements are not static. They can definitely change from year to year, and even within a rental season.

Here are some ways to stay on top of what customers are likely looking for

• Review industry publications
• Participate in industry events, such as the ARA Rental Tradeshow
• Review supplier websites and publications
• Monitor competitors’ rental fleets and websites
• Watch for large construction contracts being awarded in your region
• Have periodic discussions about needs with key customers, especially those with reputations for more innovative thinking
  

Now, let’s look at some practical ways to optimize the utilization of your equipment 

These tips and tools will be helpful in optimizing your rental fleet:

• Carefully track equipment requested on rental quotes to determine your success rates, not just on quotes in general, but on specific lines of equipment. Are many reps quoting the same equipment for the same rental windows across your clients, leaving you in a pinch for equipment availability and unhappy clients. If you need a tool to help you manage this, we suggest ODT Rentals for Business Central. 
• Take a look at organizing your equipment logically into both groups and categories of groups. You probably have already done this to some degree, but it might be time to consider whether changes are needed. This will help you to better understand the utilization of each set of equipment. KPI’s and metrics depend on this data as decisions are made at a group or category level and not just by unit. 
• Determine the key metrics and KPI’s that make sense for your organization. Some businesses care about the amount of revenue from a contract and the average invoice amount. Others deal with short-term rentals and are more interested in turnover. Make it a priority to get this done and available from your system. A monthly or even weekly review of this information will yield tremendous value when considering how to adjust your rental fleet. Having a dashboard capability with trend analysis, average realized rates, utilization metrics, etc. is easier than trying to analyze raw data in a spreadsheet.
• Power Automate can be used to drive notifications requiring attention or even trigger such actions such as the creation of a service ticket. Think about what really makes sense for your company and equipment categories and build it. It is more configuration than programming, but you will still need access to someone who understands database structures and related tools..
• If you are running more than one system, Power Automate can be used to create integrations between two systems, often with its predefined options, such as a connection to Salesforce. This can be used to push data between two systems when certain conditions are met, i.e. approval of a sales opportunity in a CRM system will change the quote in the rental system to have an approved status or even potentially convert the quote to a contract. The point is for YOU to control the vision and execution of this feature, not a software developer working for a third party. 
• Planned or preventative maintenance is a critical requirement for any business with ongoing or regulatory service requirements. It is not easy to do well as it requires a rental company to identify all service and regulatory requirements that could be scheduled for categories of equipment. While a company can start with the basics, such as an annual re-certification, return inspection, or regular oil changes - at its extreme the system setup will require part numbers, labor estimates, and third-party charges for each unique equipment model or class. At the very least, an equipment rental company should start with the basis mentioned above. 
• Consider the use of telematics integration to retrieve equipment location, usage, and error codes to make sure equipment is being carefully monitored and ongoing maintenance planned for rentals requiring service in the field.
  

Bonus Tip: All rental equipment needs to be regularly serviced and well maintained so that it is available to rent when needed. If you require a solution to help you manage your planned and unplanned equipment downtime, we suggest ODT Service for Business Central.

 As you can see, attention to the details in your business and being able to measure your activities through effective data transparency are the best ways to maximize your profitability. Let us know if you would like to chat about how to improve the profitability of your equipment rental business. We’re here to help.