One of the oldest decisions faced by owners of cleaning businesses is whether to rent or buy equipment. While there is no hard and fast answer, companies have been choosing to rent in greater numbers than ever before for a range of logistical, economical and pragmatic reasons.
Nilfisk Australia Rental Equipment Manager Stephen Garland says the ratio is currently 60 per cent buyers to 40 per cent renters, with the rental segment on the rise as companies realise its myriad benefits.
Equipment is a necessary yet costly aspect of setting up any cleaning business, and purchasing products outright can be cost-prohibitive. Renting is advantageous as it eliminates the capital outlay required. Cashflow can be difficult enough to manage, so removing the cost of purchasing expensive equipment can free up funds for wages and other mandatory overheads. When one considers the cost of purchasing an entire fleet of cleaning machines, the benefits of renting are even more evident.
QantasLink Line Maintenance has recently signed a rental contract with Nilfisk for a floor scrubber. GSE / Tooling Coordinator Tim Robinson says the organisation has always chosen to rent due to the fiscal gains. “It is better to rent this type of unit as the initial financial outlay has a lower impact,” he says.
Opting to rent equipment instead of buying it also eliminates a significant volume of responsibility and operational stress.
Nilfisk Australia provides a service to its clients that includes training, technical support and troubleshooting, which provides great reassurance day-to-day and empowers employees with the correct tools to ensure they are extracting the best from each machine.
What’s more, the rental company is responsible for maintenance and repairs (unless the damage has been caused by the operator), both of which can prove costly in both time and money. It is therefore possible to reap all the benefits of having a sophisticated piece of equipment without the unknown expense and nuisance of maintaining it. These benefits also extend to forecasting by eliminating the need for unforeseen repairs, whilst delivering transparency over the regular rental costs.
Indeed, it was this sustained approach that led QantasLink Line Maintenance to rent the machine instead of buying it outright, according to Robinson. “We decided to rent because of the ongoing support for the unit, which is simply not there when you choose to buy” he says.
Buying may seem like the natural progression after renting, but according to Garland, companies that rent often continue in the same vein. “Although some companies will go on to buy after they have rented, renters usually continue to rent. When we upgrade their machines and extend their contracts, we find a lot of people are happy with the arrangements and renew them. It just removes a lot of unnecessary stress from running a business,” he says.
Renting provides greater flexibility while companies navigate demand and familiarise themselves with the practical output of each product. As the business grows, so too may the demand for larger or different products, all of which can be remedied when rental agreements are renewed. Conversely, when a business outgrows a machine that has been purchased, a range of questions are raised; ‘What is a reasonable depreciation rate?’, ‘Where do I sell such a unique product?’, ‘Is there a market for second-hand equipment?’ and ‘What are my responsibilities as a seller?’
Defining a clear direction for the business is imperative in deciding upon the appropriate equipment and means of purchase. While many companies begin from a generic basis and eventually develop a niche offering, this can often lead to missed opportunities in the early stages. In the cleaning industry, services and products are often very unique to each industry, and failing to select a speciality can mean failure to offer the specialised equipment, training or knowledge that is required. Renting can provide a means to enter a niche industry for companies of all sizes.
Securing specialised industry equipment also allows business owners to actively form relationships with their target market, and the importance of strong business relationships can never be underestimated. “If you have the right equipment behind you, you’re able to talk to the right people,” says Garland.
In the event that companies find themselves unable to service clients due to lack of appropriate equipment, short term rental can prove the perfect solution. Nilfisk Australia rents machines that cost more than $4,000 to purchase, providing a great option for when unexpected opportunities arise. Many clients find it helpful to discuss what is new in the industry, talk about what works and ultimately know that they do not have to meet the full commitments of purchasing an expensive product.
Cleaning equipment can serve businesses in a number of ways. The most popular items that Nilfisk Australia rents are warehouse floor sweepers and scrubbers. These industrial-grade machines eliminate dirt, dust and other allergens far more thoroughly than people, which reduces labour costs and provides a superior result. These benefits also extend to cleaning employees and staff at the facility, who enjoy cleaner, healthier workplaces. For many of the cleaning companies that rent these products, purchasing them would prove too costly.
One of the largest burdens that is lifted by renting cleaning equipment is compliance, agrees Robinson. Nilfisk Australia ensures all machines are serviced regularly, environmentally compliant, in safe working order and operated by adequately trained staff. What’s more, Nilfisk Australia keeps records of testing dates and other important information for its own benefit and clients’ peace of mind.
The cleaning industry has been rooted in tradition, which Garland attributes to the slow rise in rental numbers. He believes that as more business owners and managers realise the multiple advantages of renting – better financial management, less stress, less downtime and labour, less administrative burdens – the rental segment will continue to rise.
For additional information please contact:Marketing Manager ANZ, Marian Wright, 1300 556 710, marketing.au@nilfisk.com
