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Equipment Rental: Partnering for Success
OTHER PARTS OF THIS ARTICLEPt. 1: This PagePt. 2: When Specifying Rental Equipment, Focus on Nature of FacilityPt. 3: Successful Equipment Rental Experiences go Beyond Simple Business TransactionPt. 4: Get Terms of Rental Agreement in Writing
Renting specialized pieces of equipment has become an essential strategy for success in institutional and commercial facilities. The rise of rental has been driven in large part by the need among maintenance and engineering managers to become more judicious in the way they allocate precious budget dollars. Act too hastily by purchasing a big-ticket piece of equipment — whether it's an aerial work platform or a portable generator — and the department could be locked into a long-term financial burden.
By contrast, equipment rental offers an opportunity to use equipment through a financial commitment that is much shorter and often more beneficial to department's budget. The arrangement only works, however, if managers pay attention to key points in the process. Ignoring them or underestimating their importance can result in problems with long-term repercussions.
"A maintenance manager a lot of times will look at what they actually have available to them and try to make it work for whatever they're trying to accomplish," says Tom Hubbell with the American Rental Association. "What they could be saying is, 'How do I get the right tool at the right time for the job at hand?' "
Assessing Needs And Options
Some situations that call for equipment rental arise unexpectedly — power outages, for instance. In other cases, such as light construction projects, managers can plan for them well ahead of time. In either case, though, the first consideration is whether rental or ownership is the best strategy.
"We look at how often we rent (the product) and its cost," says Sean Arnold, Director of Maintenance, Hernando County School District, Brooksville, Fla. "Is this something we do multiple times in a year or once a year? That's all taken into consideration. Also, if we were to purchase it, what's the cost? What are all the other factors — fuel, maintenance, those kinds of things — that go into the ownership of the equipment? If it has a life span of five or ten years, we don't want to be paying for it for 20 years."
Beyond these ownership issues, managers also should consider additional factors that go into the total cost of ownership.
"You also have to figure out your opportunity costs," says Donald Turner, facilities maintenance director for Okaloosa County, Fla. "You've tied up your resources with that (equipment use), and they're unavailable for use for other purposes. You have to figure out how much of this is good for the company. Or is the better option to just rent the piece of equipment when needed? That's always part of the decision process."
The decision to rent a piece of equipment brings managers another set of issues.
"What are all the tasks that the equipment will be used for?" Turner asks. "What equipment is available for rent in my market area that could do all of those tasks? Which pieces of equipment do I have experienced operators for? What are the rental costs for each piece of equipment for the time period the equipment will be needed? Which pieces of equipment are available during the time I need it? The answers will point you in the right direction."