April 11, 2023
Robert Sloan with some of his rental equipment
Thirty-two years ago, Robert Sloan, president, Contractors Equipment Rentals, Elmhurst, Ill., took what he thought was a temporary job helping his father, Stan, launch a new equipment rental operation as he finished his MBA in real estate finance.
While neither knew anything about the rental industry, they brought their business know-how to the task and learned by doing — a strategy that worked then and continues working to this day.
“If you look in the dictionary, I think my picture is under bootstrapping. We had a situation come up and then figured out how to address it. I remember that a customer wanted a skid steer and kept it for two months. At the end of the two months, another customer asked about it. We went to the skid-steer dealer. They agreed to sell us another one. All of a sudden we were in the skid-steer business. Multiply that times five. Then we added rollers and compressor equipment. We kept going and took advantage of the opportunities,” he says.
They had some bumps in the road at first. Sloan remembers that his father went to The ARA Show™ and bought $40,000 worth of construction equipment. “After he wrote a check, the manufacturer asked where he wanted the equipment shipped to. My father said, ‘I don’t know. I don’t have a location yet.’ So he quickly rented a building so we could have a place to put the equipment,” Sloan says with a laugh.
But things fell into place. As Sloan was finishing graduate school, his father hired a mechanic and then a driver to help. Sloan joined the operation in May 1990.
Father and son rely on history of working together. Working together was nothing new for the Sloans. “My father had retired as controller from Montgomery Ward. Not the retiring type, he became involved in multiple businesses. His last business that he bought prior to getting into rental was an auto parts store. He purchased that when I was in high school. I worked there throughout high school,” Sloan says.
Robert Sloan, left, and his late father, Stan
The idea to move into rental came when Sloan was in graduate school. “One of our best customers was the owner of a rental business. He talked with my dad about buying his rental business because he was planning to sell. Interest rates were 13 percent and the numbers didn’t work out, so he took a pass. Later that year he attended a rental event offered by the American Rental Association (ARA) in Chicago. My father became intrigued and told me he was going to start a rental company. I was close to graduating and the job market was tight, so he said, ‘Why don’t you come work for me while you are looking for a job?’ I said OK.”
That is how the rental venture began.
Together again, this time in the rental business, the father-son team concentrated their business on homeowners and small- to medium-size contractors. Some large contractors have used their services too, especially for jobs on toll roads.
“Our largest pieces of equipment are smaller forklifts, telehandlers, mini excavators. We go up to 13,000-lb. machines. Our smallest piece of equipment would be an electric water pump,” Sloan says.
Thanks to word of mouth and direct marketing about their new fleet and their free delivery of equipment within a 15-mile radius — a service they still offer — business grew. Eventually, they started to outgrow their facility.
“After our first year, we moved 10 buildings south on the same street. We were there for five years. Then we moved another five buildings south and bought a property. We were there from year six to 31,” he says.
Short on elbow room for some time, the business finally achieved an overdue relocation in January 2022.
“We just built a new facility on the north side of Elmhurst about three miles from our last location. We bought the Elmhurst Family Restaurant, gutted it and then added an addition for our shop. Now we have double the space we had. The land is about three times bigger than what we had, so that is nice. It covers an entire width of a block, so you come in a main thoroughfare and exit out the back to an industrial park. We get a lot of dump trucks and trailers, so they can just pull in, load and unload safely and drive out the back and onto traffic at the stoplight. It works out very well,” he says.
The team at Contractors Equipment Rentals
Thirst for knowledge was always paramount. Always wanting to learn more, Sloan absorbed everything he could about the industry. “I wanted to learn how to do every position in the operation. When we became a Wacker Neuson dealer, they offered us service mechanic training. I took them all because I wanted to learn and know how to service the equipment,” he says.
He also took advantage of the resources available from ARA. “I think I have been to every ARA show since we joined. I went to all the classes I could attend. I learned a lot and gained a lot of value. The show also helped us formulate a way of buying equipment — meeting with manufacturers, forging relationships with those guys and learning from them. We also used the offerings on RentalU,” he says.
Over time, he also got involved with the ARA of Chicagoland, even serving on the board in 2009. He still attends the local chapter’s events as well as those offered by the ARA of Illinois.
Before ARA began its Peer Advisory Groups, the Rental Executive Advisory Program (REAP) advisers were available through the ARA Foundation. Sloan benefited from having Skip Evans [former owner of HSS-RentX and Evans Consulting] as his adviser.
“I still have the letter that Skip sent me after he met with me in 2002. That letter and photos have been in the top of my desk since I received it. I look at it constantly. He spent the day with me. It was so valuable,” Sloan says.
When he learned about ARA’s Peer Advisory Groups, Sloan wanted to be part of that.
“After being on a wait list, I received the call. I was told they had a group that wouldn’t be the perfect fit to my inventory, but I gave it a chance and found it was very helpful. Now we have a strong construction group of rental operators with single and multi-store locations. I have learned so much. I would have never met these individuals without the peer group. We share everything with each other,” he says.
The new facility
Rental becomes a passion. While rental started as a “temporary” job until he found a position in his field, Sloan quickly realized how much he could apply from his education — and how much he liked the industry and working with his dad. He soon realized rental was in his blood and he wasn’t leaving.
“I have my degree in real estate finance, which is very similar to rental,” Sloan says. “You buy an asset, you depreciate it and you rent it out. You do some upkeep and market that asset. Financing, leasing and renting. It’s all very similar and I knew the financing and leasing part of the industry.”
Of course, with a new company, “you aren’t making very much money, but I enjoyed it and got in a groove,” he adds. “The first year you are growing constantly, constantly buying more equipment and tools for the shop. Your cash flow is terrible. I learned that you need to have 50 percent of your fleet paid for to be profitable and able to pay your bills. Getting your fleet up to a normal size that you can run a business with and support multiple families of your employees takes time, but having half of it paid for was a big deal. Once you climbed over that wall, it was a lot easier,” he says.
Sloan bought out his father in the fifth year of operation. His father retired again, took some time off and then came back to the business. “He said retirement wasn’t working for him. I said, ‘Your desk is right there. Come back,’” he says.
His father had the chance to see his son open the new location before his passing on June 28 last year, just six days before his 91st birthday. He had come into the store nearly every day since its inception, even up to the week before his death.
Sloan says he’s glad he took his father up on his offer so many years ago and foresees a bright future ahead.
“With rental I have been able to incorporate everything I really like — business, finance, flexibility and not being strapped to a desk. We have great employees, many of them here more than 10 years and some in the 20-year range. We have a strong family atmosphere here,” he says.
The move into the new facility was “a big deal,” Sloan says. “I feel we are in a situation to be a viable operation for the next 20 years. I am not sure whether we will add more locations, but we will continue to expand. We might expand the type of equipment we offer because we now have space in the yard for it.”
No matter what the future holds, Sloan will continue taking every opportunity to learn. “If you stop learning, it is over,” he says. “It’s about reinvesting in yourself and your team every day.”
