Rental Center: Sedalia Rental & Supply
Double-Digit Growth
All-about-the-customer approach lets Sedalia Rental & Supply
deliver strong numbers
Sedalia Rental and Supply started with the idea to do something a little better than the competition. It was a basic concept: Serve a range of contractors in west central Missouri with the right equipment and the level of customer service that helped the contractors avoid downtime.
Execute well, and they believed they could quickly earn good market penetration. If they failed, a lot of time, money and their current excavation business were at risk. 
In May 1994, they took the leap. While it may not have been a flawless execution, it must have been close: The company has shown double-digit growth in 19 of its 20 years. It’s only no-growth year was 2009, but they bounced back quickly and with strength, setting a high-water mark for revenue in 2014.
So far, “2015 is off to a good start. I think we’ll have another good year,” explains Todd Needy, manager of the business. Todd, his wife, Molly, and his parents, Judy and Cliff, were the team that laid the plans and launched a successful enterprise. (Cliff, Judy and Todd Needy pse in the photo at right.)
Small city, broad market area
Sedalia is a community of about 22,000, but Sedalia Rental and Supply has steady customers within a 60-mile radius, covering six other communities, including Whiteman Air Force Base. It’s not unusual to have a customer working – and needing equipment – as much as a three-hour drive from the business’ sole location on busy Highway 50 west of town.
About 70 percent of the volume they do with their $4.5 million rental fleet is with contractors. “We have quite a mix – concrete, heavy, highway, residential, commercial and agricultural construction,” Todd says. Business with municipalities, factories or plants make up most of the rest. “We also handle do-it-yourselfers. While our customer base has evolved over the years, we will help anybody that walks in the door.”
Rental generates about 70 percent of the revenue, with equipment and contractor supply sales delivering about 25 percent, and service the rest. Walking around the yard on a sunny, unseasonably warm day in January, the empty spots in the rental yard are obvious. A half dozen excavators and a few skid steers remained on the lot, lined up next to the fence facing the highway. AWPs reached skyward on the west side of their building, readily seen by traffic on a main thoroughfare.
“We do have a lot of stuff gone now,” Todd says, looking around the lot, then smiling, “which is good. I’ve told people that when we look like we’re going out of business, that means we’re busy. Of course, during the recession,” he adds, “people were stopping in and saying ‘Wow! We didn’t know you had so much equipment!’ That wasn’t so good.”
Earth moving and aerial equipment are two significant segments. Compressors and hot-water pressure washers are frequently rented to local poultry grower operations, he adds. “And we do quite a bit with concrete, a lot with concrete tools and surface prep. That’s been a nice growth area for us.”
Getting started
Considering the company’s track record, they were able to turn a lot of opportunities into “nice growth areas.” Maybe because they started with one solid idea – help contractors avoid downtime.
The genesis came from Cliff’s excavation business where, occasionally, he needed to rent equipment. Too often, he and Judy say, he spent more time fixing than operating. This formed the seed of an idea, one they planted with Todd when he graduated from college, business degree in hand. “We asked what he thought and he just said ‘Let’s give it a try’,” Cliff says.
Todd had worked with his dad and always had the sense that owning and running a business would be a good fit for him. “Although I never grew up thinking I was going to run a rental store. Now, I can’t imagine doing anything else.”
Their first steps were to get some expert advice. They met “right at my kitchen table,” Judy recalls, with Allen McClelland, of McClelland Marketing, a progressive and respected manufacturer’s rep firm based in Missouri. Other rental center owners were also willing to help, offering ideas on key steps to take and the mix of equipment that might best benefit the Needys’ launch.
“We didn’t have the first clue about how to get started so we did some research with other rental companies and with manufacturers’ representatives. They helped us come up with a list of start-up items,” Todd says. “And that’s one thing I really appreciate in this industry. People are willing to help you out. I’ve always remembered that. I’ve had a number of people that have come to visit us before they decided to take the plunge into opening their own rental business. I always thought it was fair to share our knowledge with them, just as others did with us.”
Initially, their rental line included compact equipment, mostly new and a few used models, along with generators, pumps and compressors – “your typical mainstreams. But we listened, and then built our inventory based on what customers were asking for, in both rental and sales,” Todd says.
He also relied on his instincts, on what he saw going on in their expansive market area. Not that it’s always been a hit right from the start. “I looked at mini excavators, this was back in our first couple years in business, and thought it would be a good fit for our customer base. The first one I bought sat for probably four or five months and just collected dust. I thought, man, that was a mistake. And then one of our customers used one. It went out a little bit more, here and there, and then it finally started taking off.” Of the five models in his fleet, only one was on the lot when PCR visited.
Although Todd has a keen sense of the business’ financials, Judy does the daily bookkeeping, payables and receivables. While Todd reviews all the numbers, she signs the checks, he says. As the business grew, Todd continued to invest in the company’s rental fleet. “I don’t make any major decision without Mom and Dad’s input,” he emphasizes. “Although, it did take Mom a while to get over the sticker shock of the amounts on the checks you write in this business,” he laughs. And Judy takes the bait: “Oh my goodness, writing those big amounts!” To which Todd replies, “Ah, it doesn’t even phase her any more!”
Commitment to people
Given their track record of growth, it doesn’t appear as though they’ve ever over-reached. Although, Judy recalls with a laugh, one of their bankers (whom they credit for helping finance their start) did have to remind her once that their revolver wasn’t a conventional loan. Not that she didn’t know that, she says, “but as the business grew and we no longer needed it, that was kind of nice.”
What about their only down year, 2009 and a year or two after? Getting through those years did require some lean thinking and operating, Todd says. They held equipment, letting their fleet age until they felt the recovery was coming. They scrutinized every expense and watched their cash flow and cash position closely.
“Yet, throughout even that toughest year, we kept everyone employed and working 40 hours each week,” Todd explains, reflecting more than a little pride in that accomplishment. “It was important to us to be able to do that. We have very good employees and I know that if we take care of them, they take care of our customers.”
Customer care comes up frequently through the conversation, not just as a philosophy, but as the core of how Sedalia Rental and Supply operates and functions. It’s at the heart of how the company started and grew. From their very first day in business, Todd knew exactly what he had to do to kickstart rentals: “I hopped in the truck and visited job sites. Because of dad’s business, we knew a lot of contractors and I wanted to see each one, to let them know we were in business and what we could offer in terms of products and service.”
Yes, their business revolves around equipment, “but it’s really a people business,” Todd says. “The most important thing was to let people know we were serious about meeting their needs.”
One sign: His cell phone number is on his business card and is answered 24 hours a day, every day. Every phone call, he says, creates a bit of positive anxiety “because I know it’s an opportunity to help solve a customer’s problem. We treat every customer as though they are our only customer. We want them all to feel that way.”
From job site to job site, phone call to phone call, and every customer that walks in the door, Todd is constantly generating conversations and asking questions. In their nine-employee business, everyone is trained to ask how the company can best help meet a customer’s needs. “If you pay attention to what they are saying and doing, if you can
help find a solution for them, they remember that. If we can save them time and money by having more equipment here and available, or replacement equipment available and quickly delivered, which is what we do, they remember that, too.”
Which gives Sedalia Rental and Supply a competitive edge. Although a competing independent closed its doors within the past year, they have national competition 30 minutes up the highway and an equipment dealership that also has a rental business in the area. Striving to be first in customer response and service is essential to earn ongoing business, Todd states.
“We won’t get every order, and we won’t get some based on the dollar amount, but, at the end of the day, we need to earn a profit. But, we earn more business because we can take care of our customers in a quicker fashion. It helps us get our rate.
“If there’s a problem, my guys have the freedom to make a decision on the spot. If it’s the wrong decision, we deal with it later and figure out what we can do better. If a customer has a question, a need, a problem, all of us work to help them get an answer right there. We constantly show that we take care of our machinery, that we’re all about helping customers not have down time, and if they do need a replacement piece, we get it out there as fast as we can.”
Two trucks are on the road consistently with deliveries, both supplies and rental equipment. A service truck and technician are ready to roll, if needed. Todd also serves as a back-up driver. When he talks about that, it’s clear that visiting with customers on job sites remains a highlight of his workday. The opportunity to talk directly to the customer is energizing, keeping him involved not just with those customers, but in the marketplace overall. He’s constantly hearing about upcoming projects, from work at a nearby air base to plant renovations to commercial construction, that help him uncover opportunities.
Which brings him full circle to how Sedalia Rental and Supply continues to evolve and grow. “Coming out of the recession, we saw where a lot of customers didn’t want to buy equipment and maintain it. We really paid attention to what they needed. And, because our customers were also holding their equipment longer and not wanting to invest in new equipment, they leaned on us a little more for rentals.”
Customers recognized that they could access good equipment, have a known price for bidding jobs and a reliable resource for what they needed on a job site, Todd emphasizes. “That really helped us set the stage to get to a record year.”
The more business they earned, and the more conversations they had with customers, the more field intelligence he had for acquiring new equipment. “Our business evolved because we listened to our customers. We had a ton of concrete contractors coming in, for example, and saw we needed to scale back in some areas, but increase with the equipment they needed. That led us to new items, such as our concrete polishing equipment, which is going well for us.
“We’re always looking for that niche, something that gives a contractor a reason to look at what we have, to stop in our store. When we do that, when they can talk to other customers about what we have and how we work with them, that positive word-of-mouth advertising, then we know we’re doing the right things.”
So much so that by the end of 2015, it’s very likely Sedalia Rental and Supply will have logged 20 years where Todd, his parents and their team have made an impact with customers, growing their business as a result.
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