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Global Innovation depends on
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Imagine if the hire and rental industry did not exist on the scale that it does – would we see as much innovation?
Economists argue that innovation is a key driver for economies to emerge from recessions. If this is true, then the hire and rental industry is fundamental to facilitating this innovation.
Why because Small Business are now the engine of innovation. Before downsizing commenced in the Western world, Corporations accounted for 80% of innovation. Corporations now account for ONLY about 20%, with the bulk of innovation (as measured by patents produced) coming from small to medium sized businesses. Small Businesses can only achieve this if they are able to focus their limited resources on the things that create innovation.
It is the Hire and Rental industry that enables Small Business to focus on innovation.
Background
To appreciate the true impact, it is worth reflecting back on the 1970’s and early 80’s. During this period Corporations still had a desire to own assets rather than rent. For example a construction company would purchase and maintain its own complete fleet of plant and equipment. Or a corporation would purchase its own audio visual equipment (at the time usually a very clunky over head projector). In fact even the people to operate and maintain equipment were employees of a company.
Ludicrous situations existed where major road construction equipment could sit idle for months. The equipment worth hundred’s of thousands of dollars would still be incurring maintenance costs because it had a time based service schedule. Why did corporations and even government hold such equipment – “just in case it was needed”. There was also a market imperative relevant to the time – that the perceived size of the corporation mattered. More assets, more employees the more it mattered.
The Downsizing Impact
However during the 1980’s this attitude changed and Corporations and Government began to respond to increasing Global competition. Their response was to begin to reduce costs, hence began the downsizing period.
Downsizing over the 1980’s in the Western World not only released millions of talented people from corporations and governments it also released equipment. But the release through downsizing created opportunities because the fundamental need for equipment and services was still needed.
Validated Economic Theory
The hire and rental industry emerged to fill the needs left by downsizing, and in so doing actually validated some of the economic theory under-pinning a lot of the downsizing theory. Such as:
Created Exchange Markets
Hire and rental companies effectively created exchange markets, whereby equipment or services became available to any business (irrespective of size) or government for a price determined by the market. Market forces of supply and demand in effect ensured the efficient market allocation of resources. This is a major pillar of the economic theories that underpin the World economy.
For example, road construction plant could be made available through a rental or hire company to any organization for a period. Through the process of hiring to multiple organizations the plant could be kept in near continuous use. This increases the efficiency of the individual equipment.
Opportunity Cost
Furthermore it enabled the client hiring the equipment to avoid spending their capital on buying the “hired” equipment. This meant that they could in theory invest the saved capital in other areas of their business where they could gain a better return or competitive advantage. In economic terms it is about opportunity cost. But if the hire and rental industry did not provide this exchange market, then this opportunity for client companies to invest capital in higher return or competitive advantage areas would not exist.
The opportunity cost principal is sound, but what makes it real is that the scale of the industry actually enables choice to be made. Consider the size, range and distribution of the industry now. The ability to apply the economic opportunity cost decision for businesses and even individuals has now been extended to nearly every conceivable area. None more so than to the Small Business sector.
Competitive Advantage Depends on Rental Options
Think about businesses starting up or expanding now. Rather than invest their limited start up capital in standard (no competitive advantage) items, they can instead invest in the things that will give them a competitive advantage.
Consider the standard items now available for rent or hire, hence the range of opportunity cost decisions made available to companies:
• Office furniture, even to plants and fish tanks for the office ambiance
• Office technology, computers , printers etc
• Marketing and Sales presentation equipment and event solutions, eg Audio Visual,
• Even the clothes and handbags when dressing to impress can be rented.
The latter sounds trivial but when personal capital has been invested in this can be an important choice.
This ability to effectively choose where to apply capital only exists because the hire and rental industry enables the economic opportunity cost choice to be made. Enabling this choice to be made means that companies can invest in other areas where by they can gain a competitive or innovation advantage. Hence they can FOCUS limited resources on the key competitive areas.
So Would the World be As Innovative?
Therefore innovation and the benefits it brings is dependent on the Hire and Rental Industry.
However the global economic value of the hire and rental industry is largely un-appreciated. It is not just about the gross turnover of the sector, but its economic multiplier effect. This multiplier is through the ability to enable opportunity cost choices to be realized. Through the provision of such opportunity cost choices it facilitates the continued growth of innovation in the small to medium business sector, now the major source of global innovation.
The Hire and Rental industry enables innovation!
Footnote on Stimulus Packages
In relation to the various Government Stimulus packages, most are major investments in Infra-Structure and Construction. It will be the hire and rental industry that will ensure that equipment and related services are delivered to these projects in an economically efficient and expedient manner. Hence contributing to the more rapid delivery of these projects and the economic benefit they are planned to deliver.
About Us
Making Life Ezy are the developers of HireEzy the world’s innovation leader in hire software and rental software. HireEzy provides the flexibility and power the Global hire and rental industry needs to meet its ever expanding range of products, services and solutions.
HireEzy is the complete booking management business system for the hire and rental industry. HireEzy includes an integrated on-line store, range of web 2.0 marketing and productivity tools and social media marketing.
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Why Rental and Hire Companies need Supplier Relationship Management (SRM)
1Many Rental and Hire companies perceive relationships as just being about customers. The fact is this is a very limited view.
Successful Hire and Rental companies also recognize the importance of other vital relationships such as critical suppliers.
So what is a critical supplier?
A critical supplier is one whose loss to your business or change in business arrangements would have a significant detrimental impact on your service delivery or profitability!
Critical Suppliers can be contractors, service providers, equipment providers or even finance providers.
———————————————-
Managing Critical Suppliers
If you have such critical suppliers, then the next question is how do you manage these relationships now? And more importantly how do you manage the Supplier Performance?
Like any great relationship communication is the key – but good communication it must be founded in facts (accurate information)
Information
To effectively manage any business relationship and its related performance, you need information. What information do you need. Well imagine you were sitting opposite a major critical supplier trying to save the relationship or negotiate a new deal.
You would want to have at your finger tips:
Basic Contact Information: Including the names and roles, contact details for all relevant people within that supplier? That is you would want to know who you are dealing with in the company.
Previous Communication: You would want to be able to have reviewed all previous communication between your company and the supplier. Why, because you want to avoid the “you said” ” he said” discussions. Being able to show actual records of conversations/ meetings, email exchanges even SMS between your staff and theirs, puts you in control of the discussions.
Relationship Value: Finally you would want to have proof of all financial transactions between the company by period. Even down to which bookings, when and too whom the supplier services were used, including any feedback from customers. Demonstrating actual performance to any contractual performance agreements is essential in ensuring that the discussions remain objective and hence fruitful.
If you agree that this is the esential information you need, then the next question is – do you have ready access to such information now? Or do you need to go and find all contracts, ask staff for any emails or notes they have on converstaions with the supplier etc.
If your answers to the above questions gave you cause for concern, then consider installing HireEzy.
HireEzy comes with an inbuilt Supplier Relationship Management system, that:
- Captures all related bookings and financial transactions for that Supplier (Automatically);
- Automatically records all emails or SMS sent to the supplier from your staff;
- Allows notes from meetings, conversations etc to be entered and date time stamped;
- Enables all contracts and agreements to be store, Agreed discount terms;
- Even only allows you to capture all contact information, inc multiple contacts; and
- Even referrals made by Partners, then result in leads are captured.
HireEzy provides you with one place to capture, store, analyze and review all information you need to manage your supplier relationships.
So if you have critical supplier relationships and you dont have a rental software or hire software solution that assists you, then it may be time to consider HireEzy. The world’s most innovative rental and hire management solution.
To find out more or too book a demo, go to www.makinglifeezy.com.au
HireEzy is available in the USA, UK, Canada, Australia and New Zealand.
Updated – Is yellow pages still effective for marketing???
Increasing research in the US and Australia has found that the use of the traditional yellow pages is declining.
A survey in May 09 in Australia by Core data, identified that over half of the population DONT want yellow pages even delivered.
People are increasingly turning to the Internet to find information, even local information. Some figures suggest that this the use of on-line search can be as high as 80% of all information searches. The following citation from blognow.com.au, shows the impact:
Even Wall Street acknowledges that the days of printed directories like Yellow pages are numbered.
Dr Lynella Grant is the author of Yellow Page Smarts, she makes the points that relying on just yellow pages is now longer safe: (click any point below to be taken to the article – well worth reading)
Further proof, recently emerged that the recession may be accelerating the decline of Yellow Pages, where the Australian Yellow Page provider Sensis announced on 31 Mar 09, that it was reducing staff numbers by nearly 50 due to a large drop in print classified advertising.
So what to do?
Well the answer is to look at your marketing advertising mix. The Yellow Pages still has a role – but should it be the dominant element? There are alternatives now – the question becomes where to most effectively spend your marketing budget?
This question of balancing the marketing mix is becoming a challenge for all companies. It is no longer static. The Yellow Pages is a barometer of this change. The days of solely relying just on Yellow Pages has finishedfor some companies - we are in a different more social and connected world – where the marketing rules change almost daily.
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