Focus on developing and supporting great teams results in fiscally aligned, disciplined growth
By Connie Lannan
July 7, 2023
Vandalia Rental, Vandalia, Ohio, has come a long way from its humble beginnings back in 1961 when it was established as a United Rent-All franchise by Jack Barney and his two partners. Today, under the leadership of Barney’s grandson, Kurt, this family-owned, independent equipment rental operation is getting ready to open its seventh location and has seen record growth — a 91 percent rental revenue increase from 2020 to 2022 alone, making it a Rental Management Market Mover for the second year in a row.
The numbers are impressive. As reported in Rental Management, the company had $20.5 million in rental revenue in 2020. By 2022, that had jumped to $39.2 million. While most companies manage to their profit-and-loss statements, Kurt, president of Vandalia Rental, has taken a different approach.
“We found out that it got in the way,” he says. “It actually complicates the equation because then everyone starts focusing on the cost structure instead of revenue creation. The profit driver to this entire industry is physical utilization and disciplined rate structure. Rental revenue, when you pair it with utilization factors, pulls most of the P&L with it. When we had the team focus on profit, they focused on cost controls and we didn’t focus on the right things. We’d pick up the pennies but missed the dollars. So we took that focus away from the majority of the organization and incentivized top-line growth instead. We won’t ignore the P&L [profit and loss], but we don’t focus on it. Crazy as that might sound, that allowed us to be more profitable while we were growing faster because we focused on what drove the profit instead of the profit itself.”
What Kurt put a major focus on was “growing and supporting great teams,” he says. “We started investing in more people with greater talents and aligning the right seats in the bus and focusing on the team’s genetic makeup and collaboration instead of individualism. Boy, did it kind of go. Those teams grow the customer base, which in turn grows the business. Our focus will continue to be on ensuring we give our team everything it takes to support our customers and reward our team’s success accordingly. We all focus on doing the right things for the right reasons and being ‘willing’ when others are ‘unwilling.’ We are open-book, purpose-driven and everyone participates in the outcome,” he says.
An important aspect of that focus centers on the company’s mission/vision, which was honed when Kurt bought the business from his father in 2011. “Our mission is to provide our customers the opportunity to prosper by offering products and services that create cost-effective solutions. Our vision is to be the premier equipment solutions provider. It is about how do we create a situation to be the best and then how do we go out there and become that best?” he says.
Along with that mission are the core values of the company, which Kurt outlines as:
- “We before Me: We are a championship-caliber team of professionals dedicated to our customers’ success. We win with the relationships we build, the results we create and the reputation we earn.
- “Focused: We are a growth-based company committed to excellence. We are laser-focused on delivering results — not just efforts — that maintain our position as the market value leader.
- “Own it. On it: It is a privilege to serve our customers; their urgency is ours. We make it happen!
- “Do the Right Thing: We will always take a short-term loss for a long-term win; our decisions and actions demonstrate this. Regardless of the circumstances, we always choose to do the right thing for the right reasons. Whatever the outcome, we accept the consequences.”
Other essential ingredients are training and safety. “They play a critical role in our ongoing success. We have two full-time employees whose sole focus is to maintain training and the safety of our team. It is the one thing that allows purpose to exist,” Kurt says.
This is important, he adds, because “if you feel good and you know your stuff and you are asked to go and play the game and know that you are trusted, you are going to lay it on the line until the whistle blows and that is how we win. You can’t get better unless you are getting better. We want to make sure we are fostering that environment of collaboration, that we are extending the knowledge, we are building value for our customers, allowing our team members to share in that success and then letting that gear turn.”
All of those elements create a culture of “collaboration, support and commitment” that not only permeates the organization but also spreads to its customer base, he adds. “Ultimately, we want to figure out what our place is and how we can help people. If we can help them grow their business and we can become value-added, then they tend to invite us back to that dance. So, we really just look to see how we can help, and we built that culture of collaboration.”
Vandalia Rental’s primary customer base falls into “the mid-market space,” Kurt says. “We have some who are much smaller and some who are much larger, but the mid-market space for us is the customer who is big enough to have multiple needs, but they are small enough to where they feel like a minnow in the ocean when they go to some of the consolidators. They are not a national account. They kind of get lost in the shuffle. Our customers do 75 percent or more of their business within an hour travel radius of our branch network, rent in week-plus durations, invest a minimum of $10,000 annually in rental equipment, utilize a variety of different equipment and view equipment rental as a positive in their go-to-market strategy. We put our time, energy, knowledge and capital behind that customer. If we try to be all things to everyone, we end up being nothing to anybody. If we focus and align our sales efforts on that target customer type, we all know what a ‘win’ looks like.”
The strategy has worked. “Customers keep returning to Vandalia Rental because we’re large enough to service their needs but small enough to know their name. In our markets, most local customers would prefer to work with local suppliers, but they need what they need, when and where they need it. That’s why scale is so important in this industry. To support the preference and remain a local business, we grew into that void. And we’re committed to continue doing so,” Kurt says.
It also has resulted in the company’s expansion. Kurt opened his second location in Franklin, Ohio, in 2016. The next location was in Sharonville, Ohio, in 2018, then in Florence, Ky., in 2019. That was followed in Lima, Ohio, in 2020 and Columbus, Ohio, in 2022. They are currently building their seventh location in East Cincinnati.
The goal is “first to continue to expand in a contiguous pattern in highly populated areas so we can quickly respond to customers’ needs. Second, as other independent equipment rental owners consider retirement, we are letting them know we may be an option versus the larger consolidators to adopt their work families. On this front we’re looking for the same population-rich areas, but since the business is already established, it doesn’t necessarily need the contiguous footprint. We can build that out over time once we learn our way into the business. We’ve done this once already and it worked out well for everyone, so we’d like to continue to lean into it. Right now we’re looking at places within approximately a 400-mile radius of Dayton, Ohio,” Kurt says.
A factor in determining where to expand, besides population size, is the feedback they receive from their customers. “If we know we have population density, we feel we can go toe-to-toe with anyone in the industry. We want that competition. Iron sharpens iron. We all get better and the customer wins with that equation. We want population density, logistical infrastructure and fleet-sharing capacity. Outside of that we ask our customers where there are the gaps in the market, whether that is within our own fleet offering, our geographical footprint or whether there are markets they are expanding into. We view our customers as our external partners. When we build that level of trust through repeat business, it becomes so simple if you just ask the question, ‘How can we help?’ They will virtually write you a road map, but you have to show that level of reciprocal support and maintain that trust. That is done minute by minute, transaction by transaction, rep by rep, every single day,” Kurt says.
Now, with about 125 team members and soon to be seven rental locations, Vandalia Rental has made its mark in the industry, offering its customers everything from small handheld concrete saws and electric hammers all the way to 180-ft. self-propelled boom lifts and articulated dump trucks.
The future looks bright, with plenty of strategically planned growth coming down the pike. “In addition to all the other factors, our growth strategy has been to increase rental revenue at three times the market average, maintain a strong fiscal discipline, win where we can be great, let others be great where we can’t and, most importantly, know the difference,” Kurt says.
Internally, the company has set a goal “to reach $100 million in rental revenue by the end of 2027,” he adds. “We need fiscally aligned, disciplined growth. Our growth will be threefold: continue greenfield expansion in current and adjacent population-rich areas, adopt some of the smaller independent rental companies that are local and around us, and acquire nonadjacent established independent rental organizations within a 400-mile radius of Dayton, Ohio. Overall, we want to continue expanding in a balanced way that best supports our team, our customers, the markets we serve and the industry as a whole. And we want to have a ton of fun doing it!”