When you launch a business, the odds are against you. Statistics show that about 60 percent of all businesses fail within the first two years. And the businesses that manage to weather the storms of their early years may find that competition and changing market conditions force them to change in ways their founders never imagined.
To kick off the new year, this month's “Rental Essentials” looks at seven event rental companies that are celebrating noteworthy anniversaries this year to learn their secrets of staying in the game.
On May 1, Mullins Five Points Rentals of Huntsville, Ala., will celebrate 30 years in business, a period during which “at least 10 [rental] companies in our area alone grew to be huge, then failed or claimed bankruptcy,” notes Philip Anderson, operations manager of Mullins Special Occasions, the party rental division. He lists four reasons for the company's longevity: faith in God (“It is only through Him that we have survived in this cutthroat business!”), paying attention to the needs of client caterers and planners, pricing wisely (“We price according to what our services are worth, not comparing at all to the competition”) and treating all employees with respect.
Time has taught the company how to manage its facilities wisely. “We have buildings large enough to handle our operations, but not too large as to tie up money in real estate that could be used better in other areas,” Anderson says. Mullins also manages managers: “Our managers are not controlling; they are empowered to make decisions, and they empower the salespeople, mechanics, tent installers and deliverymen to make decisions as well.”
Dan Hooks, president of Charlotte, N.C.-based Party Reflections, has an insider's perspective on his 47-year-old rental company: His father, the company's founder, “‘allowed’ me to experience the business from all facets before taking the helm — I'm sure you catch the sarcasm.”
Hooks believes that party rental looks easy to outsiders. “It seems simple enough: buy equipment, store it, charge a percentage of it for rent, get it back, rent it again,” he says. “I think some competitors have entered the market with a vision of quick return on investment in a low-tech field, but what they have found was much harder work than they expected. Some competitors gave up before they were able to reach our size and be competitive. We have scratched and grown when possible and held our own when times got hard, but this is not the type of business that can be enormous overnight. A steady growth strategy has worked for us.s
For Rooney's, it's all about adapting.
In 1905, Rooney's Hire Service opened its doors to rent household furniture to people immigrating to Zimbabwe. When that market dried up in only five short years, “my grandfather had to adapt to change, and ventured into the function equipment hire market,” says director of operations Niall Rooney. “Back then it was a very basic product that he would hire out; today, our functions are much more complicated and require modern, trendy ideas and a product that is fashionable and efficient to use.”
Keeping pace with change has been crucial for Rooney's. “If you don't keep coming up with new ideas, you will get left behind,” Rooney says “As a family-owned and -operated business, we are proud of what we do, and we take it very personally.”
Founded in 1946, Orlando, Fla.-based Kirby Rental Service will be celebrating its 59th anniversary this year, and doing exactly what the competition doesn't do has been central to the company's success.
“When a new company would start in our local area, the first business tactic they would try is to drop the market price by 10 percent or more,” recounts general manager Jim “Smitty” Smith. “When they found a market niche, they would continue pricing as low as 30 percent off the market price.” But big discounts come at a big price: “They would pick up a certain amount of business, and never get their prices up where they should be,” Smith notes. “It appeared to be a five-year — or less — cycle, and they would be bought or closed. We countered the drop in business or the lack of growth by raising our prices — every time. Do less work, make more money. Continue to run the business on a service basis — provide the best service possible, for a fair price. Anyone can provide a product; the company that provides constant, consistent service will ultimately come out on top.”
Keeping track of today's specials has been the key for Miller's Rentals & Sales of Edison, N.J. — the company was founded in 1932 as a restaurant supply house. Today, Miller's “moves with the times — not against,” says president Steve Kohn.
“We review our market segment and customer needs and implement changes when necessary,” he explains. “If something is no longer a viable rental item or market, we know how to let go.” But Miller's leads as well as follows: “We also take chances,” Kohn notes. “Many times we bring in new products or concepts. Some become winners; others bomb out.” At a time when many clients pick separate vendors for linen, china, tenting and decor, “We've learned we cannot be everybody's rental store,” he adds. “It's no longer effective to carry everything for everyone. We have learned to specialize in specific products and have variety in those lines.”
For Toronto's Chair-Man Mills, it's all what's in a name.
Chair-Man Mills has been “the” rental name in Toronto since its founding in 1911. And yet, “when we purchased the company approximately six years ago, it had slipped due to absentee ownership,” notes president Mary Crothers. Although the name was still well-known, the company's image needed some updating, and that's exactly what she's done. By adding new inventory, entering the kosher market, offering better service and stressing the value of hands-on ownership, “We are definitely No. 1 again,” Crothers says.
Indeed, doing everything to burnish that good company name has been a cornerstone of the company's success. “It's a name you can trust to provide you with quality rentals,” Crothers says. “If there ever is a problem — God forbid — we do everything in our power to rectify it. For example, if our truck damages something, there is no doubt we will accept responsibility. It's like I always told my children, ‘You have only one reputation.’”
Milpitas, Calif.-based The Stuart Rental Co. got its start 155 years ago renting tents to miners. How has the company stayed in business since 1850, from the days of the Gold Rush to the days of the dot-coms?
“Some of the companies and people who have come and gone in this industry have lost their dedication to servicing the event industry,” notes Andrew Sutton, Stuart's vice president of sales and marketing. “Everyone in this industry knows how much work it takes to succeed; if you are not dedicated to working hard enough to provide the best products and the best service, it is just easier to go into something else.”
“As long as the economy continues to grow, the biggest challenge will be the pace of change with respect to new and creative product offerings,” Sutton adds. “Party rental companies are tasked with keeping inventory fresh and service levels high, all while maintaining some profitability in their businesses.”
Chair-Man Mills, 416/391-0400; Kirby Rental Service, 407/422-1001; Miller's Rentals & Sales, 732/985-3050; Mullins Special Occasions, 256/534-5701; Party Reflections, 704/332-8176; Rooney's Hire Service, +263 47 486 217; The Stuart Rental Co., 408/856-3232