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New equipment rental operators: Learning, dealing with challenges and celebrating wins

By Connie Lannan

June 6, 2024

Editor’s note:
This is the third installment in a periodic series of stories exploring the reasons why new equipment and event rental operators are called to be part of the industry, their challenges and wins and why veteran rental operators have stayed, plus how this industry has offered them success as well as valuable lessons and advice they gladly share.

Everyone’s path to equipment rental is different. That is definitely true for new equipment rental operators Kevin Swartz and John Colcord, co-owners, Construction Site Machinery, Brentwood, N.H.; Johnny Makris, owner, Loc-Equip, Laval, Quebec, Canada; and Sherri Kavleski, owner, 99 Ramp Enterprises, Liberty, N.Y.

Industry calls. Swartz and Colcord both have years of experience in sales, rental and service of construction equipment. It was while working together at another rental operation that they began kicking around the idea of teaming forces and starting their own rental company. They formed an LLC and then officially opened Construction Site Machinery in June 2021.

John Colcord, left, and Kevin Swartz

It was a very humble beginning. “We repaired a piece of equipment in my driveway, flipped it and we doubled our money. That enabled us to afford another, nicer piece. We grew until we had a nice, small inventory — more for the sales end of things. On the rental side, we were able to re-rent with local vendors we had relationships with. They helped us out. No one likes a sitting asset. If we had a rental for it, we took theirs and got it to our customers. It grew from there,” Swartz says.

Eighteen months ago, at age 20, Makris was working at a tire shop. “The business was renting trailers. I wanted to buy in with them, but they told me there wasn’t room to take on any investors. I started talking with my dad, Costa, about it. He said, ‘Why don’t you start something yourself?’ My dad and I started with one dumper trailer and a 16-ft. flatbed. The summer of 2022 was the beginning of Loc-Equip,” he says.

Kavleski and her family have owned and operated Kavleski Excavating and Construction out of their home for 35 years. In 2021, they found a 7-acre commercial property right off a highway, which included a building for their construction company.

“It was exactly what we needed and perfectly located off a major highway. It also gave us space for another type of business. Our next thought was what are the types of businesses we can run simultaneously. I started doing research and thought equipment rental started making sense. An equipment dealer friend suggested I reach out to the American Rental Association (ARA). I did because I needed to know how to do this. Everyone at ARA has been so encouraging. We have ARA Insurance and officially started renting in April 2023,” she says.

Challenges abound. For Swartz and Colcord, the financial challenges were immediate.

“We started operating out of our own pockets,” Colcord says. “To buy equipment we dug into our savings and figured out what we could afford to buy. We slowly built up a nest egg to help us buy more machinery and get us into the rental market in earnest.”

“No one [financial institution or bank] wanted to talk with us before we had been in business for two years. Now, banks are competing for our business,” Swartz says.

The other big challenge has been staffing to help Swartz and Colcord handle the service of equipment.

“Even with new equipment, things can break. No one wants downtime,” Swartz says.

“Kevin is mechanically inclined and can repair equipment. If we can’t keep up on our own, we hire outside companies,” Colcord adds.

Hiring out has meant going to the original equipment manufacturer or independent service technicians. “From our past relations we know who to call. We have clients
all over New England, from up in Maine to southern Connecticut. Because we have relationships with independent service technicians and companies that have a fleet of service trucks that can go out the same day, we have been able to service our customers,” Swartz says.

It was pretty slow for Makris in the beginning. “We were using the flatbed trailers to transport hot tubs or move topsoil or gravel in our dumper trailers to clients to make
some money and keep our equipment working,” he says.

But things have turned around. “We specialize in smaller trailers for residential projects — about 4-ton capacity. We attract a lot of contractors who do cement work or similar types of projects. Word got around, and by the beginning of this season things really exploded. We finished the 2022 season with 10 trailers and two excavators. Now we have 21 pieces of earthmoving equipment and 32 trailers. All our equipment is new. My phone was blowing up, trying to keep up with demand,” Makris says.

Whereas before it was trying to get business, the new challenge “is hiring people so I can delegate and focus on other parts of the business,” he says.

“Another challenge is to put our contracts on our laptops and use DocuSign. Our plan is to get rid of the paper. It has been overwhelming, but we are embracing the change,” Makris says.

Paul and Sherri Kavleski

Kavleski admits that starting in a brand-new industry can be daunting. “Right now we are figuring out our key markets. We have contractors coming to us to rent our equipment. These are contractors we deal with in our construction company. We have a big sign up by the interstate, but I need to get our website up. Basically, I am figuring out my processes and business model,” she says.

Lessons learned. Swartz and Colcord have used their experience at other rental businesses to build their processes and become “quite proficient at sourcing equipment. We know who to go after for what kind of earthmoving equipment we need. We are looking for later-model, lower-hour equipment that won’t have service issues,” Colcord says.

Even so, they have learned “we have to be thorough and not have tunnel vision when we are inspecting machines, either for re-rent or purchase. If we take a piece from another vendor, we have to be sure they are as thorough as we are. No one wants a simple little problem in the yard that could have been addressed to be a problem on site causing grief and expensive downtime,” Swartz says.

Because their primary customers are contractors — small, medium and large contractors as well as landscapers — they have built their inventory around this customer mix.

“We have skid steers, mini excavators, small to large excavators, bulldozers and specialty attachments for the excavators — grapples for demolition work and rock breakers for the New England ledge. We also have trommel screens, wheel loaders with various attachments, off-road articulating dump trucks and plate compactors. We also have purchased some smaller equipment. We really cater to everyone and would like to be their one call. If we don’t have it, we can pretty much find anything they need,” Swartz says, noting that they are learning to adapt to clients’ needs.

Makris, who is serving smaller contractors, agrees.

“This business is all about learning. You have new challenges every day. You have to be a person who faces and can overcome that challenge most efficiently as possible,” he says.

When just starting, he accidentally double-booked a client. “I thought, ‘How do I keep that client happy?’ This was a serious mistake. I remember the guy showed up for his trailer. We didn’t have any more dumper trailers. I made a couple of phone calls to my competition. I paid his trailer rental for that day and gave him an in-store credit of $250. He was cool, understanding and appreciated my effort. He ended up renting my trailer for three solid months,” Makris says.

“I always ask how I can make my clients happy. People who are understanding deserve to be given the world. I have since made sure to keep a brand-new trailer exactly for that customer when he comes in to rent it. I also make sure that if any piece of equipment breaks down, I will replace it within two hours. Even if I don’t have the equipment available, I will go rent it from someone else. It is my responsibility to rectify the situation,” he adds.

Kavleski has learned from those at ARA national, Rental Management, ARA rental operators, her lawyer and ARA Insurance preferred agent Rob Hoag what aspects her business needs to have. “Everything I have read from ARA and the people I have talked with have helped me understand what I need for my business. That has been very helpful,” she says.

Getting the word out. Swartz and Colcord have run ads on Facebook Marketplace and used other marketing outlets to let customers know they are available.

“Sometimes we go through our contact lists and blast off texts, saying we are here for you. We also are building an email list and will probably purchase the service as well so we can be in front of people. Besides that, it is word-of-mouth. That goes a long way in the industry. All the contractors know the other contractors and are aware of where they are sourcing their equipment,” Swartz says.

“We have been fortunate to have made a lot of great relationships over the years, so we get a lot of business through those relationships,” Colcord adds.

Costa, left, and Johnny Makris

Makris also started using Facebook Marketplace. “That was quite strong for us at the beginning of the season. My phone number was being passed through friends, so a lot of my business is through word-of-mouth now. We have a website, which also brings in people. I would say word-of-mouth of my good service and good prices have brought a lot of clients in our direction. If you have a good service, offer reliable and good equipment at a decent price, you will be busy,” he says.

Kavleski has been surprised at how helpful her highway signage has been. “My sign is the first thing you see off the highway before you hit town. Word-of-mouth also has been pretty good. The third leg will be having a website. That is the next thing,” she says.

Successes achieved. Swartz and Colcord feel good with what they have been able to achieve in this short period of time.

Initially renting yard space, they soon discovered “we would need a building because it is cold during the New England winter months,” Colcord says with a laugh.

Today, the two are renting property on a busy industry road in Brentwood, N.H. “There are other OEM [original equipment manufacturers] dealers up and down the street. We operate out of a 3,200-sq.-ft. building with two large service bays to take care of our equipment. We are currently looking at a piece of property down the road to purchase and build our own facility,” Swartz adds.

In addition to having a physical location, they feel fortunate that “everyone has been receptive to us,” Swartz says. “It is beneficial that we are a smaller outfit. We are ‘go-with-the-flow’ people and are here to help our contractor clients get their jobs done efficiently and make a profit at the end.”

Their years of experience in the industry before branching out on their own also has helped them “become fairly good with seizing opportunities,” Colcord adds. “If we see we can help a customer and make a profit at it and build a relationship with a customer, it is a win-win.”

Being in Canada, summer is prime rental time for Makris’ customers. If last summer is any indication, he knows “this summer my dad and I will need an extra set of hands. We love to have a lean operation where we keep our expenses at a bare minimum, but we realize that we have to have help to keep running at the pace we have been going,” he says, adding that this is a good problem to have.

Right now he is renting a corner of a yard on which to store his equipment. “We are lucky to have this yard and this space. We work out of a container and are able to store our equipment in greenhouses on the yard. We are looking to have a nicer office space in the near future. That is part of our plan,” he says.

Makris also thanks ARA for helping him achieve his goals. “With ARA, we could see what our contract was missing. The service with James Waite Law allowed us to adjust our contract to make it more secure. Also, ARA offers so many tools to help new businesses. Shannon [Dinwiddie, ARA senior member support specialist] has been great, giving pointers and help, including helping us with insurance. There are a whole lot of laws in Quebec for insurance with our trailer. ARA has been such a great support system for us to help me learn before we make a mistake,” he says.

Advice sought. If they had an opportunity to talk with more veteran equipment rental operators, all would have plenty of questions to ask.

“We would ask a whole lot of questions. Basically, we don’t want to/can’t afford to waste time and resources on things that don’t work. It would be a great asset to us if a veteran equipment rental operator could suggest roads to follow as far as types of machines, manufacturers to go with and maybe what to avoid in relation to helping gain financing for our customers,” Colcord says.

When Makris went to The ARA Show™ 2023 in Orlando, he had a chance to talk with more veteran equipment rental operations. “One of the things I hadn’t put into consideration was how to manage the offseason. I had one gentleman say that he focuses payments on when he is making money. I would like to see how others fare during the offseason or in a recession when you have so many monthly payments,” he says.

Kavleski, who is just getting started, would like to ask “what to branch out into as far as equipment. Also, I would like to know how other rental operators’ processes are working for them. What can I learn from their business model? I am still crawling, but I am on the way to walking,” she says with a laugh.

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