The recent pandemic caught all of us off guard. With little to no time to prepare, most businesses, including those that are part of the rental industry, have been greatly affected. The true effect won’t and can’t be calculated unless you’re monitoring key performance indicators (KPIs) so that you know where your business stands.
Monitoring your KPIs will help you rebound now and prepare your company in the event that a pandemic, recession, or other drastic event occurs again.
What KPIs should you be monitoring?
There are three key elements of your business that you should be keeping a close eye on. These are essential to knowing the health of your company, where your weak points are, and how well you are managing cash flow.
Liquidity & Debt Management:
Don’t be afraid to get rid of equipment. The fact is, if it is underperforming, you might be doing yourself a favor by selling it. Even if you don’t get top dollar for it, recognize that generating the extra cash will help you out more now than it will if you try to squeeze out a higher price on an underutilized asset later on.
And what about repairs? Prioritize repairs and maintenance on the high return on investment (ROI) items. This will make the most efficient use of your cash and labor force.
These efforts will improve your debt to sales ratio. To stay on top of debt management, calculate your debt to sales ratio in 2019 and use it as a guide going forward to decide when and how much fleet to take out of the bank and turn into cash.
Employee Efficiency & Productivity:
Labor costs often make up 50 percent of a rental company’s expenses. This is completely worth it if the labor force is delivering what it should. But if it is not, cuts may need to be made. Just as you should sell underperforming assets, you should not be afraid to cut underperforming personnel. Keep a pulse on your employee efficiency each year and use it to determine if there is any staff that might need to go.
Revenue Change Over Time:
Keeping track of revenue changes helps you determine where your company has been, where it’s at, and where it’s headed. Determine how your business numbers compare to last year and identify any trends in growth rate and revenue. That way, you can make decisions to keep your company headed in the right direction.
How Can Rental360 Help?
Keeping track of the above KPIs sounds great but can prove to be challenging with all of your business data dispersed in various systems and without a proper reporting system. That’s where Rental360 comes in. It is a complete solution designed to be the single source of truth. Keeping track of KPIs is made easy and reliable with the dashboards and reporting capabilities that it provides. Note a few key features:
- Quick access to revenue trends with the ability to drill-down to see what’s causing them
- Role-based and customizable dashboards with security measures to limit data displayed according to viewer
- Industry specific dashboards, focusing on equipment utilization and revenue recognition
Rental360 has demonstrated its trustworthiness with 100% accuracy in compliance with ARA standards and methodology for calculating and reporting performance measurements, thus earning ARA Rental Market Metrics certification.
Armed with Rental360’s reporting capabilities, you can successfully manage the key elements of your business. By focusing on KPIs and making changes where necessary, your company can emerge from this pandemic stronger and better prepared for anything that lays ahead.