MAXIMIZE RETURN ON RENTAL INVESTMENT WITH THE ASPEN DEALERSHIP MANAGEMENT SYSTEM
Monitoring rental performance is critical to maximizing your return on investment, and requires powerful, industry-specific software.
With the ASPEN Dealership Management System, there’s no need to invest a fortune in rental management software. In addition to strong rental management capabilities, ASPEN provides tools to successfully operate all aspects of your dealership including integrated accounting, service and inventory management, customer communications, mobile access and more. While this makes ASPEN a unique solution for equipment dealers, ASPEN’s rental tools are also unique.
- Tools to Prevent Revenue Loss: ASPEN empowers dealers with the means to understand, classify and correct factors contributing to revenue loss. Record lost sales from ASPEN’s Rental Calendar or Rental Contract screen to further analyze with ASPEN’s Lost Sales Reporting feature.
- Additional Capacity on the Fly: To quickly fulfill customer demand, dealers can rely on ASPEN’s allowance for additional capacity to rent out non-rental units.
- Fleet Management: When making important decisions regarding fleet expansion or when to transfer units, ASPEN’s Financial Utilization Reporting provides detailed insight into the utilization of specific types of equipment. Dealers can also track rental revenue stream by a particular market segment, equipment type, etc. See screenshot of ASPEN Rental Financial Utilization.
- Managing depreciation: A task typically done using spreadsheets, can be performed right from within ASPEN. Whether opting for straight-line depreciation, double declining depreciation, or depreciation as a percentage of rental income, ASPEN monitors the cost basis to ensure that it never goes below designated salvage value.
- Track condition of units: In addition to tracking meter readings, unit condition, etc. on the unit record, keep track of condition of rental units by uploading current images of each rented unit to the rental invoice.
RENTAL CONTINUES ITS RISE
Industry experts agree- equipment rental is on the rise! Equipment rental industry revenues in the US have been growing at a rate of at least three times that of the general economy over the past few years, and industry experts and analysts don’t expect the pace to slow down anytime soon.
This is more than just an industry trend; experts say it’s a shift in the way business is done. American Rental Association executive vice president and CEO Christine Wehrman attributes a “secular shift” in the way rental is perceived as a catalyst for the increasing number of equipment dealerships either expanding their existing rental fleets or adding rental to their mix. “The benefits of renting equipment have become abundantly clear, such that it’s now understood to be a great way to manage and operate a business,” says Wehrman. “Renting simplifies people’s lives, so they can focus on getting their work done in a smart, efficient and more economical manner,” she says.
According to Wehrman, in addition to the benefits of getting the right equipment for the job and getting the latest model, with latest technology and environmental compliance standards, renting makes sense from an economic standpoint as well. No capital outlay allows for better financial management, and long-term costs are also reduced by eliminating costs and personnel need for long-term maintenance and storage.
An expected increase in total construction expenditures each year is cited as one of the main factors that will impact rental revenue growth, which has exceeded the overall growth rate of the industries it serves during the last few years.
- In a forecast for 2015 by IHS Economics, an increase in overall U.S. equipment rental industry revenues of 7.7 percent is anticipated in 2016, followed by 8.5 percent in 2017 and 9.3 percent in 2018 to total $49.8 billion.
The construction and industrial equipment segment, which leads this rental growth, is expected to increase revenue by 9.8 percent in 2015, and anticipated to be followed by a 7.9 percent increase in 2016, 8.6 percent in 2017 and 9.0 percent in 2018.
Many dealers are taking note. In a recent ARA survey, (September 2014) 72% of respondents indicated plans to expand their rental fleets in 2015. In his September article, “Top Three Ways to Improve Your Business,” Garry Bartecki, financial consultant to the equipment industry, says, “Like it or not, you have to get a handle on the rental business.”
Subscribers to the ARA Rental Market Monitor™ service already are aware of the equipment rental industry’s potential for significant growth in 2015 and beyond. The subscription-based service for American Rental Association (ARA) members is provided by ARA and Rental Management. For more information or to subscribe to the ARA Rental Market Monitor, contact Tracy Johannsen at 800-334-2177, ext. 270, or email@example.com.
How to know when to expand your rental fleet? Use a dealership management system such as ASPEN that features rental utilization reporting. ASPEN’s Financial Utilization Reporting provides detailed insight into the utilization of specific types of equipment, assisting dealers in making important decisions regarding fleet expansion or when to transfer units,. Dealers can also track rental revenue streams by a particular market segment, equipment type, etc. For more information on ASPEN’s rental capabilities, see the Rental section of the Charter Software website.
Rental industry data provided courtesy of the American Rental Association (ARA) via ARA Rental Market Monitor™, a partnership with IHS Economics. Charter Software is an ARA member and is not otherwise affiliated with or endorsed by the ARA.