Rental Center
All In The Family
Six Brothers Team Up To Grow 13-Location Business
By David Wolff
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The six brothers – (left to right) David, Mark, Ken, Dale, Ron and Terry – work with single-minded focus: operate smartly, pay attention to customers and the local market conditions, and grow accordingly. |
Coming from a large family, it only stands to reason that the six Arlinghaus brothers would treat their business the same way they were raised. They agree to disagree, find common ground, and never lose sight that the goal is to care about each other and grow the company as a family unit.
Ever since their father, Art Arlinghaus, started Art’s Rental Equipment & Supply in the greater Cincinnati area in the late 1960s, the focus has been to build a successful rental business by treating employees and customers like blood relatives.
The success of this approach is self-evident. Art’s Rental has 13 locations in a two-hour radius with more than 160 employees.
“We never grew beyond our means,” vice president Mark Arlinghaus says. “We stayed within what we could afford to do, adding equipment piece by piece. We listen to our customers; we go into the field to find out what customers need and want.”
Controlled growth
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Mark and David Arlinghouse and their four brothers helped guide the family business for steady growth. |
Art and Rita Arlinghouse started their company in the late 1960s at a small facility in Newport, Ky. Two years later, the building burned down, and their dreams appeared to be over. However, the couple’s two oldest sons, Ron and Ken, talked their parents into starting again. While Art has passed away, their other sons, Terry, Dale, Mark and David, joined their brothers in the business. A sister, Mary Jean, and their mother do not work for the company.
Art’s Rental began as a small equipment rental store targeting homeowners. Shortly after the first store opened, a second location was added in nearby Florence, Ky.
“Dad had the insight for multiple locations,” Mark says. “He had the vision that one location wouldn’t work. Housing was booming. Florence was farmland and residential construction was moving in that direction.”
At that time there was not a strong rental company in Cincinnati; most equipment dealers didn’t rent. Skid steers were added to the rental offerings in the late 1970s, followed by rubber-tracked excavators, dump trucks, trailers and small dozers. The brothers were reluctant to take on aerial lifts, but as they watched this product category boom, they decided to add them to the inventory.
“In the early 90s we were buying bigger, more expensive equipment,” Mark says. “Dad asked if we knew what we were doing. It was more risky than he would have wanted, but he eventually realized we were on a path bigger than he ever dreamed about. He took a step back and turned over the business to us.”
The rental cycle determined when new locations were added. When the economy ran strong, the company bought equipment. When business slowed and equipment was idle, the brothers decided it was a good time to expand.
“All we needed was a new location,” Mark says. “We had the equipment, so when there was a slowdown we expanded into other locations.”
David adds, “We never wanted to get far away from Cincinnati. We always wanted to be within reach of what we could handle, always keeping our hand on the pulse of the industry. Our first four locations were within a 20-mile radius of Newport. Today, we’re within two hours of our farthest store, and we visit each
location frequently.”
When the economy dipped in 2008, the brothers held on to the equipment they had. “We weren’t in a position where we needed to sell off equipment to make payroll,” Mark says.
“While other companies were dumping equipment, we stayed afloat by watching overtime hours. We ran as tight as possible and focused on cutting any waste,” David adds. “We made a commitment not to lay off employees and to keep everyone working at least 40 hours.”
Service is key
Today, large contractors involved in road and bridge building and commercial projects bolster the customer base. But this also creates a more competitive landscape, with Art’s and national rental chains striving to earn more business. “It’s a constant battle with them, mostly on price,” David says. “But we compete based on our service. We’ve always prided ourselves on having good, newer equipment, as well as service trucks and technicians to get to the job site. Our customers get 100 percent service when they rent from us.”
The brothers say the economy is rebounding well, and the company’s performance the last two years has been very good. They’re considering hiring more people to handle increased business. “We’re a company that doesn’t like to say no,” Mark says. “When a customer calls needing a piece of equipment, it really hurts us to turn them away. So we’ll do everything
we can to get them the equipment they need.”
Art’s carries a wide variety of equipment, everything from rug scrubbers to large dozers and 150-foot lifts. Every new piece is delivered to the Newport headquarters and logged into the company’s computer system so pieces can be tracked and moved wherever they are needed. Among the 13 stores are two major repair facilities.
The sales staff works with customers as soon as projects begin. They want to see the job from beginning to end, how dirt will be moved, footers are to be dug, concrete walls put up, and glass installed. They constantly follow the job and let customers know what rental equipment they may require before next phase begins.
“We explain to customers how rental equipment can benefit them to make their job go easier,” Mark says. Discussions with customers focus on the specific tasks, needs and length of the job, while working to factor in productivity and efficiency gains from renting the right equipment for the right amount of time. “We work with the contractor to give them the right piece of equipment for the best price.”
The future of the rental industry looks very strong to the Arlinghaus brothers, particularly because during the downturn a lot of contractors sold their equipment and now turn to rental for their equipment needs. There are two key factors helping
drive the increased use of rental equipment, the brothers suggest. In part, it’s because contractors are reluctant to invest money in a hard asset, only to have it sit idle if another downturn occurs. They also believe it is easier, and likely more accurate, for contractors to bid on projects when they know exactly what their equipment costs will be. If they’ve bought a piece of equipment, it’s not always easy to calculate all of the costs involved in owning and using that equipment. When renting equipment, they have a line item in front of them that is easier to factor in.
Plus, “when they’re on the job they have to be ready to go,” Mark says. “If machines break down they have to deal with that instead of completing the work they were planning on. On the other hand, if they’re renting and it’s our equipment, all they do is make a phone call and get us to the job site.”
All in the family
Mark and David admit they are constantly asked the same question. How do six brothers get along and make the business prosper and grow?
“All I can say is that we are the most laid back group of guys you have ever met,” Mark says. “Yes, sometimes feathers get ruffled, but the next day we walk in and it’s a new day. We just don’t let these issues bother us. Our father was a very laid back man, and that attitude must have rubbed off on us.”
David says it’s important to keep the business moving forward and growing. “If we stop, we’re done,” he says. “If the opportunity arises, we’ll consider another location, but we’re very satisfied with where we are today. We’re not looking to go three or four hours away. We want any new locations to stay within reach. It would be easy for us to expand, but we need the right people and the right location. We’re always looking for another market area that needs a good rental company.”
The key, according to David, is having the right people, and that is the hardest part of the job. “We have many great people who have been with us for years and years, some more than 25 years,” he says. “We’re a family business, and they are part of our family. One of our biggest challenges is the number of employees we need to keep the company successfully running and growing, and getting quality people. When we see a diamond in the rough, we grab them. Many of our new people come from employee referrals or are their family members. We have fathers, sons and daughters working for us.”
Originally published in the May/June 2014 issue of Pro Contractor Rentals. Copyright 2014 Direct Business Media.
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