Every spring is full of excitement as we purchase new equipment and forecast our growth. Summer months are busier each year, and thankfully, we’ve increased revenues for the past seven years. When January comes around for our seasonal construction rental business, however, there’s still the cash flow crunch.
Aspen Rent-All is perched 7,500 feet above sea level, so we experience an intense winter from Thanksgiving to Easter and a dramatic drop in construction rentals. That’s why it’s critical for us to plan for the time when our company’s expenses are higher than the revenues before the flakes start falling.
Here’s how we do it at Aspen Rent-All:
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Identify Off-Season Alternatives
Figure out some items that make sense for you to rent to your current customer base in their offseason. Over the past few years, we’ve added items that will perform well for us in the winter. Ground thaw machines have been a great addition – they’re out nearly all winter, bringing in a nice revenue stream. We’ve also added larger heaters that can be used for construction sites and tents. This has helped us build a nice propane business where we exchange tanks throughout the winter months.
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Identify Sales Opportunities
In the fall, we review of all our equipment, how it is performing, and the hours on the machines to see what we can sell off before the end of the year. We check valuations online, our rental software tells us an estimated return on each piece of equipment based on its usage history, and then we identify potential customers online and locally.
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Communicate with Your Staff
As the year winds down, we have a team meeting to talk about the lean months and ask everyone to be conscious about their hours and spending. I am thankful my staff is vigilant about tracking their spending and figuring out what can wait until the second quarter. We also provide bonuses throughout the year, with the largest bonus going out when our cash is strong – between June and October.
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Staff Reductions
When business is lean, there’s not enough work to go around for everyone. So around Thanksgiving each year, we reduce our staff to keep our most valuable and knowledgeable employees. We may have up to 10 employees during the summer, but as winter approaches, we cut back to five. It’s difficult to send good, hard-working people away, but we invite them to return in spring, when the work returns. Thankfully, there are many seasonal jobs available in the resort market while we’re slow, allowing employees to keep seasonally employed all year. This also allows us to release employees we don’t want back.
The lean months can be tough, but taking the time to prepare for them will put you ahead of your peers when business gets going again!
Beth Hoff Blackmer has been the sole owner and President of Aspen Rent-All, Inc. in Basalt, CO, since 2000. The company was founded in 1967 by Beth’s father, Dave Hoff. The company’s inventory is 55% construction and 45% general tool. She credits the ARA and the friends she’s made through it with helping her go from “no background in rental” when she bought the company to being ARA’s Region 7 Person of the Year in 2018.