Masonry Magazine June 1999 Page. 27
Equipment Rental...
A Viable Alternative
Mason contractors are renting more equipment than ever before, and here's why: financial benefits and the flexibility to bid and execute bigger jobs at more geographically diverse locations.
Renting may provide higher profits, tax benefits and the ability to take on larger, more profitable jobs because contractors who rent don't have to buy, maintain and haul equipment from job site to job site, according to industry research analyst Manfredi & Associates.
"So many jobs call for more equipment than I've got," says Gus Umphress, owner of Ft. Worth, Texas-based Gus Umphress Masonry, "but I don't need the equipment long enough to warrant the expense it would take to buy it. That's when rentals help the most."
Umphress isn't alone. The explosive growth of the equipment rental industry demonstrates that increasing numbers of contractors are enjoying the financial advantages of renting. The U.S. equipment rental industry grew from an estimated $614 million in revenue in 1982 to more than $21 billion in 1998, according to Manfredi & Associates.
In addition to routine maintenance costs, construction equipment requires periodic updating to ensure that it meets safety standards. Equipment owners often do not have the expertise to complete those modifications at a reasonable price, especially with lift equipment.
"Equipment rental is often the most cost-effective way of getting equipment to the job site," said Umphress, whose masonry business has annual revenue of about $2.5 million. Umphress rents up to $100,000 worth of equipment per year. "I rent something for nearly every job, and for some jobs I rent all the equipment I need. I've outfitted entire job sites with rental equipment."
In addition to saving contractors equipment purchase and maintenance costs, rental equipment has created new opportunities for smaller contractors. While limited capital resources previously restricted the size, number and types of jobs smaller contractors could bid and execute, many have found that renting equipment enables them to take on a wider variety of bigger jobs in wider geographical areas. For this reason, equipment rental has enabled many small contractors to grow their businesses dramatically.
The benefits of equipment rental aren't limited to small companies. With the expanded selection and availability of rental equipment, large companies no longer have to buy and maintain large fleets of expensive, specialized equipment. By maintaining smaller fleets and inventories, such companies reduce their overall fixed costs and operational expenses and eliminate the need for surplus equipment disposal, thereby enabling them to "right-size" more quickly and efficiently.
In addition to helping contractors manage several jobs simultaneously, rental equipment enables contractors to be more mobile. By renting equipment from rental centers near their geographically diverse job sites, contractors eliminate the cost and logistical challenge of hauling their own equipment from job site to job site.
For Umphress, the larger selection of affordable rental equipment has enabled him to expand throughout the Dallas/Ft. Worth area, Texas and the southern U.S. "I've accepted jobs as far away as Charlotte, N.C. I'd never