Rental Management recognizes the equipment rental industry’s 2023 Market Movers
By Alexis Sheprak, contributing author
June 20, 2023
After years of uncertainty following the COVID-19 pandemic, supply chain disruptions and higher than normal prices, there’s a sense of optimism — small as it might be — flowing throughout the equipment rental industry.
Optimism that, despite challenges such as inflation and labor shortages, reflects the growth still infiltrating the rental market. In fact, in its most recent forecast, the American Rental Association (ARA) indicates that the U.S. equipment rental industry’s growth will soften but still grow.
Earlier in 2023, the year-over-year growth was expected to be just 4.7 percent in 2023 and 2.1 percent in 2024. The most current projections, however, indicate 7.6 percent growth in 2023 totaling $60.4 billion in construction and general tool rental revenue. And 2024 now expects a 3.1 percent revenue increase.
“After talking with many manufacturers and operators at CONEXPO-CON/AGG, and in the weeks after, it’s clear the headwinds are still there,” says Tom Doyle, ARA vice president of program development. “Inflation is still high, interest rates are still high and they may continue to rise, while issues remain with labor shortages and supply. However, investment in the construction industry and construction employment approaches a record high.”
In Canada, equipment rental revenue growth is also higher in 2023 compared to last quarter’s data. At the end of 2022,
the Canadian equipment rental revenue forecast for 2023 was -0.3 percent and 4.7 percent for 2024. Now, Canadian equipment rental revenue growth (construction and general tool combined) is projected to be 2.9 percent in 2023 and 4.3 percent in 2024, totaling $4.6 billion and $4.8 billion, respectively.
All of this goes to show why the 2023 word for the equipment rental industry just may be “adapt.” Over the last year or so, rental companies’ ability to strategically sustain and grow their businesses despite what’s going on around them shows exactly how adaptability can equal success.
Doyle agrees. “I continue to marvel at the adaptability of our members. They have found ways to overcome these headwinds and provide solutions for their customers,” he says.
That’s why this year’s Rental Management Market Movers list features incredible and resilient equipment rental companies of all sizes that have adapted to challenges and made a mark on their respective markets.
In our category of smaller independent rental companies with annual revenue of less than $10 million, seven of our Market Movers reported rental revenue growth of more than 100 percent. And how did they achieve such tremendous growth? Several attribute it to their relationships, whether that’s striving to be responsive, resourceful and dependable with their customers, or by creating a solid team of hardworking, considerate and friendly employees.
While relationships was the top answer, many companies attribute their revenue success to branching out and adding new types of equipment to their fleet. But regardless of whether it’s people or products, success simply lies in adapting one’s business to the industry, customers and community surrounding it.
This year’s article features a look at the fastest-growing independent rental businesses with an annual revenue of less than $10 million and those with rental revenue greater than $10 million. In addition, we’ll spotlight some of our Market Movers and get to know them a little bit better.
Market Movers with under $10 million in annual revenue
Durante Equipment, Hollywood, Fla., is setting the tone for rental companies across the country. Led by John Durante, no other company has seen the type of growth achieved by the equipment rental business. The company reported $2.1 million in revenue for 2020 and finished 2022 with a revenue of $7.2 million — a 243 percent increase.
Keith Beggs has been in the industry for 45 years, and his company, New West Equipment Services, Calgary, Alberta, Canada, has been around for almost 30 of those years. With a 113 percent increase in revenue from 2020 to 2022, jumping from $3.8 million to $8.1 million, Beggs attributes much of his success to his team.
“My success is due to my team (from the bottom to the top) seeing and buying into my vision of customer service and consistently delivering on that for the past almost 30 years,” Beggs says.
“For 30 years, we’ve provided consistent, quality customer service. It’s our corporate culture. This translates into a total customer care package from helping with equipment choice, setting up equipment, maintaining and servicing the equipment, and breaking down and returning equipment,” he adds.
Another relationship-driven company, Nor-Cal Equipment Rentals located in Sacramento, Calif., saw a 95 percent increase in revenue in the last three years. Starting around $4.3 million in 2020, the company accelerated all the way to $8.4 million to finish out 2022.
“We pride ourselves on customer service and a friendly experience, thrown in with old school hot rod style,” says Tom Butts, Nor-Cal owner. “We have continued to grow and expand our business even during COVID and all the supply chain issues in the last few years. We’re expecting to continue this success in 2023 with our long-term relationships and as we welcome new ones.”
Focusing on their team and customers, NC Rents in Lodi, Calif., saw a revenue growth of 85 percent, starting off around $1.3 million and ending 2022 at $3.4 million.
“Our goal is to be the best at what we do and provide honest and genuine customer service,” says Tad Bowers, NC Rents owner. “Our ongoing growth is a result of the trust our team has built with our customers and with one another. Their efforts and hard work earn new business each day and are responsible for our ability to continue growing into the future.”
Leaning into the theme of adaptability, Bowers adds, “We plan to continue to grow by remaining nimble and quick to adjust to changing market demands and by growing our bench strength of talented teammates.”
Buffalo Equipment Rental, Weatherford, Texas, is this year’s well-deserved honorable mention. Owner Zack Smith started the company two years ago, in the midst of the COVID-19 pandemic, and transformed the company into a $2.4-million family business.
“Having worked at another locally owned rental business for 10 years, I gained the knowledge of how to grow wisely and quickly from some of the best,” he says. “Our numbers show debt decreasing (no new loans since I started the business), and the growth of our fleet doubling since the start just two years ago. We’ve poured all of our time and money into this business, nurturing it to become what it is today and what it will be in the next few years.”
Market Movers with more than $10 million in annual rental revenue
In this year’s list, there’s no shortage of larger independent equipment rental companies growing quickly due to acquisitions and added locations. Several companies, including Cooper Equipment Rentals, Mississauga, Ontario, Canada, have seen unprecedented growth in revenue due to expanding their operations. Cooper jumped 75 percent in annual revenue, starting out at a cool $157 million and ending 2022 at $275 million.
The company expanded operations in six provinces across Canada, both through acquisition and greenfield, to bring their location count to 62 branches.
Another Canadian company making moves throughout the industry through acquisition is All Choice Rentals, Drayton Valley, Alberta, Canada. Starting 2020 at a revenue of $6.7 million, the company profited a 170 percent increase by expanding their footprint and closing out 2022 at $18.1 million.
“In 2021, there was a strategic opportunity emerging where independent operators were exiting the rental industry,” says Michael Doerksen, All Choice owner.
“All Choice Rentals was able to close a number of transactions in a short period of time knowing that the economic outlook for our industry and local economy looked favorable.”
That decision paid off for Doerksen with rapid growth in both revenue and profitability, but he says that it’s been a full team effort to achieve this success.
“From our field staff providing the level of service that our customers have come to expect, to our administrative teams working long hours behind the scenes to make the rapid expansion possible, each member of our team is a critical cog in its success and we are so grateful,” he says.
Nor-Val Rentals, located in Armstrong, British Columbia, Canada, has grown from an annual revenue of $12 million to around $21.5 million, an increase of 79 percent. Owner Jim Clipperton says that the Nor-Val team achieved this success with strategic purchases of competition and greenfield starts against national players, solidifying their market share without sacrificing customer service.
But it’s also nontraditional ways of business that helped them make a name for themselves. “Our support of local charities, youth groups, sports teams and nonprofits helps put our name out in thank you responses on social media and a ton of word of mouth marketing,” says Clipperton.
Topping off our list of companies with more than $10 million in revenue is Rental Equipment Center of Denver. The fastest-growing Colorado independent rental company is completely customer-focused. And with an annual revenue growth of 457 percent, they’re doing something right. The company, led by Jerry Morin, started 2020 with $3.5 million in sales and ended 2022 with $19.5 million. Their success is a true testament to what a customer-focused business plan can do.