It’s a good idea to rent for a while to figure out if increasing your inventory of equipment is a wise — and profitable — plan
Do you purchase now or do you wait? That is the big question on everyone’s mind with any major purchase. For example, you want a new car. You think you’re getting a good price, but will the price go down later on? You think you need a new car, but do you really? Honestly, there is no perfect answer for these questions. Whether it is a new car or more toilets, we are all weighing both sides of this equation.
Over the last couple years, I have really started to think through every purchase. Not only am I limiting excess stuff, but I am also saving money at the same time. I am notorious for leaving items in my virtual shopping cart for a day or two. Instant gratification leads to things you never use and regret buying. So taking time to think through a purchase allows me to avoid buyer’s remorse. It is the best way to proceed when buying for your company, too.
At Royal Flush, we never tell a customer no. We say yes to all orders, even when it would have been smarter to say no because we were too busy or didn’t have the equipment. When the papal visit occurred in 2015, I was thrilled to get the work. That job alone was more than enough for any company. But then the auxiliary work started to file in, from local towns, government agencies and more. This is where I started to bite off more than I could chew.
I knew I didn’t have enough equipment to do all of this work. No matter how many times I counted units and rearranged jobs, I kept coming up short. So I was at a crossroads. Do I buy a couple thousand more toilets or do I borrow from competitors?
In the end we did both. We bought another 1,500 units because we knew we could filter them to other branches after the event. They would refresh our special event stock in locations that desperately needed more equipment or newer equipment. Then we rented more units from local companies. This saved us trucking costs and the time we would have spent building all of these toilets.
Obviously this event was on a huge scale, but as portable restroom operators, you face a similar question many times each season. You hate to turn work away but you don’t want to spend all of your profits on new equipment each year. What do you do? I suggest you sit on that decision.
Rent from a competitor, as your backup, for one season. At the end of the season, look at all of those rentals. Did you routinely need 50 more toilets to get through a busy weekend? Did you continuously rent an 8-foot trailer from another company? If so, you could stand to purchase those before your next season begins.
I know this sounds so easy when you are removed from the situation, and on a busy weekend it’s stressful to rent units from other companies and manage those rentals on top of all of your other work. But for some companies, there might not be a ton of profit to spend on new inventory. Waiting and thinking through your purchase is much better than a spur-of-the-moment decision you may regret.
About the author: Alexandra Townsend is co-owner of A Royal Flush, based in Philadelphia.
Did your business grow last year? How do you decide when it’s time to purchase more restrooms?