2min chapter

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Badge Stone - Earning His Badge and Making His Mark in Search Fund Investments - Ep.83

Think Like an Owner

CHAPTER

The Business Model of Equipment Rental

It's hard to believe that united reynolds didn't exist in the mid nineties, but an now is a massive business. In my opinion, you have to choose the niche, because the only way you compete with the big guys is You either pick a nich of pro like a safety or something like that,. And so what was interesting, as i went through the life cycle of my business, i felt it all matters about renal rat right? You've got to give service, but you have to have renal rigt. The little guy s were mom and pops that could do really good service, but they didn't really have any overhead. All those costs drive rate and your

00:00
Speaker 2
So when parts would be taken from other pieces of equipment. Do you mean that this machine they would rent out to someone had lots of different color panels or pieces that looked thrown together?
Speaker 1
Yes. And if you looked at the fleet, if you had five pumps on one job sight, one might be blue, one might be rust, which rust was a very popular color. And so that's what i mean. It was not coordinated, and it didn't inspire confidence. If i were a customer. Can
Speaker 2
you talk a lbt more in depth about the actual business model of equipment rental? It's an area that i haven't spent much time learning or having on the podcast. I just love to hear ho's that business model work in one of the key factors to keep in mind as you're running the business.
Speaker 1
It's hard to believe that united reynolds didn't exist in the mid nineties, but an now is a massive business. But in my opinion, you have to choose the niche, because the only way you compete with the big guys is you either pick a nich of pro like a safety or something like that, and now they've bought and gotten into that as well, you have service. And so what was interesting, as i went through the life cycle of my business, i felt it all matters about renal rat right? You've got to give service, but you have to have renal rigt. And the big guys were able to buy at such a scale and provide so much coverage of geography that you weren't going to really beat them at that. The little guy s were mom and pops that didn't have systems, and but could do really good service, but they didn't really have any overhead. And so all those costs drive rate and your profit. I felt like at times i was in the t ge stage. And so you would have to really figure out, how are you going to win? How do you o win? And it's a tough business, the cap x. And a lot of the searchlo world really shies away from cap x. And there's real good reason, because it's super complex to manage. And i think in other countries like latam that don't have access to credit as much as we do, that really value and they're still behind the curve on this rental market, there might be. But in the united states, it's a bit tougher. Here. We don't do as much equipment rental in the united states.

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