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November 10, 2015 | by admin
Last month I met with a customer of mine who sells and installs artificial turf. At my church we are looking at improving some of the sports areas on campus and I thought it was worth a few minutes to see if artificial turf might make sense.
By the time the meeting was over, I had been offered 3 products: turf, lighting and solar panels. As I left our meeting, I realized that offering multiple products or services can dilute an otherwise professional presentation- we will plant grass.
It's a good thing for us to focus on companion businesses and how they might fit with your current business. Many NPSA members have multiple businesses and I observe that most of you started renting containers as a companion business to an already profitable business.
Even I did that for the first five years of Container Solutions' existence. I sold containers across the U.S. and had a great time. At some point, I saw the wisdom in shifting from trading to rental. The change was gradual and, in the end,
the right move. Soon enough, I stopped the trading. While I loved my customers, I saw that to build the rental business I needed to be wholly in it.
I am generally not in favor of operating more than one business.
Here are my 4 reasons that you should not have a companion business:
Don't Dilute Your Passion
Last month I received a personal note from my banker who remarked at my passion for our business and how that passion contributed to our financial success. The fact is, my passion is limited. I can
only handle so much; after that, I start to lose track of details and miss commitments made to customers. If you have a rental fleet today and it's working well for you, leave well enough alone. If you have an employee or family member who is a self-starter and can take on a potential companion business, give it a shot - but keep it separate.
factor in building your business;
don't let it take a back seat to
You Only Have So Much Time
Maybe I am getting old, but I don't have a desire to add another hour to my work week! I like being able to work through my day without too many surprises or things left undone. Fifteen years
ago when I was just starting, there were regular times where I had to take a Saturday and just
clean up the office. Thankfully, those days are gone. Adding another business to my workload would not only cut into my time for the rental business but also require me to work more hours! Not in my plan.
Jack of All Trades and Master of None
There was a time when the guy at the auto parts store could hold a car part in his hand, identify it and offer up a replacement before you could explain what you needed. Today if you can't provide the make, model, year and engine size, the typical counter guy can't begin to help you. It takes a computer to get the right part for a vehicle. I miss the knowledgeable guy. In my rental business we make it a point to demonstrate knowledge. Not just about portable storage but about our delivery trucks, the customer's geographic area, our invoicing system and what other customers have experienced. I would challenge the notion that we could effectively offer the same level of knowledge and support if we were offering storage rental, lumber sales, and landscaping all in the same office. Your product knowledge is a big factor in building your business; don't let it take a back seat to another venture.
Confused Financial Picture
Right now we have a pretty simple financial picture - we purchase equipment and some of it becomes rental and some is sold. Slow and busy times are pretty predictable and we don't need three paragraphs to explain our Balance Sheet. Adding a companion business would upset that picture. Even now with our trucking, modification, dry sales, dry rental, reefer sales and reefer rental, it takes some work to determine if each function is contributing to our overall profitability. Another risk is that an additional business could keep you from having needed capital for rental fleet expansion. Imagine a chance to gain significant rental fleet growth and not be able to because of limited capital!
I don't mean to sound like a wet blanket and I truly see how many of you had portable storage as a companion business in the past. But I would strongly caution anyone looking to expand through adding a companion business. With that said, I realize there are smaller markets where portable storage rental cannot be large enough to stand alone. Regardless, don't let yourself be enticed by a potential opportunity that could negatively impact your core business.
Phil Herndon - Container Solutions/Portable Cold Storage - www.containersolutions.net -800 506-7368- Fax: 925 363-5062
Categories: Business Management
November 10, 2015
November 10, 2015
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