When working with a new client that has a rental fleet, the question will inevitably surface “How hard is the fleet actually working?” Most owners and fleet managers can’t answer that question. They are measuring rental revenues; they might be measuring financial utilization (annual fleet revenue / original fleet cost) or they might be measuring gross profit from the rental department. Having sold two rental companies in my experience and working on a couple of due diligence teams, the question that a prospective buyer wants to know, “Could we get more revenue from the same fleet of equipment?”. Then they want to know how sustainable is the revenue stream being created by the rental fleet before
we need to make reinvestment?”
You should be able to answer those two questions as well. You are the investor. Don’t get caught up in measurements that are not true indicators of how your portfolio of rental equipment is really doing. Some measurements are appropriate for daily and weekly performance indicators, some are more appropriate for monthly or annual evaluation and others speak to investment performance.