Rental Center -- Strategic startup
Evcon Rentals takes a well-planned path to launch a business that serves the greater Hot Springs, Arkansas area.
Mike Evans began his career in construction. His first projects were very small, but soon he was working on projects at industrial paper mills and larger commercial projects. In hindsight, it was a natural segway for him to get into the equipment rental business.
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| Meredith LaRue (left) and Mike Evans (right) started Evcon Rentals in 2019. |
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Evcon Rentals utilizes Hilti’s Fleet program to have $40,000 worth of tool inventory for about $1,400 a month. It recently added Hilti’s Nuron Li-ion-powered tools to tool its inventory. |
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Telehandlers and mini excavators are popular rental items for Evcon Rentals customers. |
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As Evcon Rentals grows, it is completing more repairs internally. |
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From big to small, Evcon Rentals rents them all. They have even rented items as small as screwdrivers. |
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Evcon Rentals supplies area contractors with aerial lifts. |
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| Maintenance technicians have access to online tools to help them make equipment repairs. |
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Meredith LaRue and Mike Evans teamed up to start Evcon Rentals in 2019; they are breaking ground for a new 8,000 square-foot facility that should open late 2022. |
“I have a background of general contracting, all the way from very small construction jobs to industrial paper mills and larger commercial projects. As a contractor, I found that a certain piece of equipment would have come in handy on certain jobs. As we’ve opened this business, we’ve tried to get equipment that would be very helpful in certain situations. It may not be a highly utilized piece, but it would be something that could have a great ROI and help a customer. I want the customer to think, ‘Hey man, they had that. Let me check to see what else they have that could help me out.’”
Evans, the company president, and Meredith LaRue, COO, opened the business in September 2019. Like Evans, LaRue is no newcomer to construction, as her father is a contractor; she’s also spent several years working for a national chain of equipment rental centers. “We started the company in January of 2019 and during the time from January to September we developed our own market strategy. We went out and gathered the business intel to see where we needed to take this thing,” says Evans.
“We rent practically anything,” says LaRue, “The smallest thing we’ve probably rented is a screwdriver; we have even rented bolt cutters.” In contrast, Evcon Rentals also rents telehandlers and boom lifts and heavier earthmoving equipment, such as a Case 750 dozer and 18,000-pound excavators. They also have excavators as small as 2,000-pound models in the fleet.
It also has a wide variety of sizes of skid steers and compact track loaders as well as attachments that go with them. “Hammers and augers are the most popular attachments for mini skid steers, compact track loaders and excavators,” says Evans.
LaRue and Evans are hard-pressed to segment their users into any dominant group. “Some days, it’s 40 percent construction contractors and 60 percent DIYers; other days it’s 60 percent contractors and 40 percent DIYers,” says Evans.
“It’s really a great mix of customers,” says LaRue.
Expansion-minded
Evans says that Evcon Rentals’ customer base is in a 100-mile radius of Hot Springs in northern Arkansas, but the majority are located close to Hot Springs.
“We recently opened a satellite branch about 20 miles north of here at Hot Springs Village, which is the largest gated community in the United States,” says Evans. “We just opened that branch in February of 2022. It’s a densely populated area that’s sure to grow as the main highway from Hot Springs to Little Rock gets upgraded. It’s a big road project that started in 1990 and is scheduled to be finished this year. We had many customers coming to our main branch from the Village to rent tools and equipment, and with the new highway opening, we are sure that area will grow even more, so it made sense to get a satellite established there,” Evans says.
While the satellite store stocks a wide variety of tools and equipment, larger pieces of rental equipment are sourced out of the Hot Springs location. “We only stock equipment less than 8,000 pounds at the satellite store that can be towed to the job with a pickup,” says Evans.
Evcon Rentals’ next expansion involves building a new rental center that will nearly triple its shop, showroom and office area in Hot Springs. “When we started in 2019, we operated out of Mike’s construction office and a few storage units. When someone wanted to rent something, we would get it out of the storage unit,” recalls LaRue.
Their present facility is approximately 3,000 square feet and is a bit off the beaten path; the new 8,000 square-foot facility will be on a busy road that goes past the Hot Springs airport. LaRue’s father, a longtime area general contractor, is building the facility.
Power tool power play
Part of the reason Evans wanted to get into the world of equipment rental is because he had amassed quite a variety of smaller equipment and power tools from his contracting days.
“Meredith and I joked about it at her previous job about how much equipment I had, but one day, we got into a conversation and we got serious about opening an independent rental store,” Evans says.
While getting into equipment rental is capital-intensive, Evans and LaRue have found a way to build a rental power tool offering with Hilti’s Fleet program.
Under this program, Evcon Rentals rents the power tools from Hilti. “We have approximately 30 Hilti tools that are valued at $40,000, but only pay about $1,400 a month for them. If a tool comes back damaged, we send it to Hilti – it gets fixed or replaced within three to five days including shipping time and they even pay for the shipping,” says Evans. “If a renter puts improper fuel mix in a concrete saw, we simply send it back to Hilti and it’s repaired or replaced, no questions asked. We have also adopted Hilti’s new Nuron battery powered jackhammers, hammer drills and concrete saws, which will eliminate all fuel concerns and cord issues for both the client and the Evcon Rentals staff,” says Evans.
“From day one, when we found out about Hilti’s fleet program, it was attractive to us. When we started, we didn’t have a huge staff. We didn’t have people that knew how to hands-on fix everything that needed to be repaired. We were still in re-rental mode for the most part. We were trying to figure out how to diversify our portfolio without killing our cash flow,” explains Evans. “With the Fleet program, it’s as if we gained new tools to rent and a service tech without adding a person on staff.”
“Instead of having older tools that need to be maintained or repaired, we have nice, new equipment for pennies on the dollar,” adds LaRue.
The ROI on the Hilti Fleet program tools has been phenomenal. “We are seeing a 6x or 7x return on our investment in the fleet tools, and the repair policy is almost like an insurance policy on top of it,” says Evans.
Secret sauce ingredients
Evans and LaRue believe their backgrounds in construction separate them from other rental centers in the area. “I think it’s the personal involvement that we show our customers. If they need something extra that we might not supply, we’ll go the extra mile and find supplies they need or find another contractor they might need to help finish a job,” says LaRue.
In today’s job market, one would believe it would be nearly impossible to build a bench of employees to fill the wide variety of roles in a rental center operation. However, Evans says that hasn’t been an issue. “Meredith is the only employee here with direct rental experience. We have not been going the typical rental route of stealing people from another entity with more pay. We’ve hired people off the street who have the work ethic and meticulous nature we need to keep the equipment up and running. We have been able to mold them into what we want. For example, our shop supervisor was a cabinet maker before he came here,” Evans says.
“It’s resulted in us building a very diverse group of employees. They each bring their own essence to the table and it’s worked out well,” adds LaRue.
“We really operate as a team. We’re not a family; we’re a team, because if you’re not pulling your weight, as on any team, then you’re going to get cut. We work together well. We’re a unit and we’re trying to build a really, really great team,” Evans says.”
“We probably have more people on staff than we really need, but it has helped with the process of getting customers in and out of here fast instead of skeleton crew that would be more like walking into a Walmart and you can’t get checked out because there’s only three checkers even though there’s 47 lanes. We’ll sell you what you want, but we can get you out of here very fast,” Evans says.
“It’s part of our personal relationship we are building with our clients. We are trying to go that extra mile and respect their time of them coming in here and getting them out quickly, not making a long process of picking up or returning equipment or tools. Even though we’re renting out tens of thousands of dollars of equipment to a person who is spending pennies on the dollar to use it, there’s still a process that must be done, but we don’t want to make it uncomfortable and time consuming,” says Evans.
“We’ve also been hiring to get the cream of the crop employees. We may hire a person who we may or may not need right away, we can use that time to grow them into positions that we expect to need from future growth,” Evans concludes.
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This article originally appeared in the May-June 2022 issue of Pro Contractor Rentals magazine. ©Urbain Communications LLC. All rights reserved.
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