From a crawl to a run

Rental operator thinks outside the box to complement business

Barry Weaymouth, a former Air Force policeman, Foreign Affairs regional security officer and a security consulting specialist, now adds rental operator to his list of titles.

The Town of Elgin in Ontario is referred to as the Hub of the Rideau Canal. Located northeast of Kingston, it is situated in the heart of a picturesque region of the province known as cottage country. The area has traditionally been a rural tourist destination; however, it also boasts a thriving agricultural industry, a strong and developing industrial base, and now an innovative rental operation.

Enter Barry Weaymouth, former Air Force policeman, Foreign Affairs regional security officer, security consulting specialist, astute entrepreneur, savvy businessman, visionary, community figure, landlord, student, and owner of Elgin Equipment Rentals and Elgin-U-Stor-It facilities, located on the town’s Main Street.

Elgin Equipment Rentals and Elgin-U-Stor-It facilities is located in Elgin, Ont., northwest of Kingston, in an area commonly referred to as cottage country.

The company started off with storage, offering climate controlled lockers, open storage and unheated lockers and then added rental tools and equipment to complement the operation.

In May 2007 the company picked up a 2,000-gallon propane distribution centre and acquired Technical Standards and Safety Authority (TSSA) licence to fill tanks. Arrangements with campground owners allow customers to swap them on site instead of driving to the pumping facility in Weaymouth’s rental yard.

Weaymouth describes the area and sums up the history of his property, “Elgin may only have a few hundred people but Rideau Lakes Township has a population of 10,000. Twenty-two kilometres in any direction from our location is where 85 per cent of those people 10,000 live. There is a good drawing card here for a very small rental business. When I bought the property in May 2004, it was an old lumberyard that hadn’t been occupied in over four years. It had lain fallow in a terrible state of disarray and there was 40 years of lumberyard debris everywhere. I spent tens of thousands of dollars to clean it up and now you can eat off the grass!”

The first thing Weaymouth did in May 2004 was look at its potential. “The previous owner had stored peoples’ things for them in this corner and that corner. Right off the bat I built lockers and opened up the Elgin-U-Stor-It facility. One of the buildings was an old office showroom which was a heated space so I put climate controlled lockers in there. Not too many locker companies have heated space unless they are in the city so that was an attractive feature for customers. The other buildings I turned into open storage and unheated lockers. I started to rent locker space right away and by the fall of 2004, I had to put up a fence and gate on our four-acre property because during that first year, I wasn’t around full time so I ran the business off of a mobile telephone. Since the lockers rented quite quickly I realized I had to staff the place.” He says he wanted to make the position full time and needed something else to keep the employee busy. That is when he first thought about renting.

“I did some research and the closest tool rental companies, which I knew nothing about at the time, were in Kingston, Brockville, Gananoque, and Smiths Falls, which are roughly 30 to 40 minutes from our location.”
Weaymouth knew right away that he was in a very central location to start a small tool rental business. “In April 2005, I opened up Elgin Equipment Rentals. I used part of the buildings I had on site as a tool shop and tool storage and the rest of the buildings were for Elgin-U-Stor-It.”

As planned, Elgin Equipment Rentals started off slowly, “Nobody knew I was here and I didn’t have a lot of equipment. I was building my inventory. However, I have slowly and steadily grown year after year.” He started marketing the business with mail-out advertising, which generated a little revenue that year but, he says, was slowly gaining momentum.

 “I still haven’t made a profit yet but I’ve only been in the rental business for almost four years. It could take five to seven years to really turn a business properly and I understand that.”

A top priority was inuring his equipment and he turned towards HED (Hayhurst Elias Dudek Inc.), the insurance company for the Canadian Rental Association (CRA). “We have a significant amount of equipment on site and I’ve been adding more since day one. It’s a sizable investment,” he says, adding that it’s important to protect your investment.

Weaymouth soon discovered there is a multitude of different equipment to service different rental markets and set about educating himself.

“Not knowing anything about the business, I did a lot of research on equipment before making any purchases. I purchased a new John Deere 3320 Tractor Backhoe which is a mid-size unit, so it is great for the rural country. Most people in this area who want a bigger backhoe already own one. I also have a Kubota mini excavator U35 zero tail swing unit that weighs approximately 8,800 pounds. This was also a good move for me because in a rural area customers don’t want little things, they want bigger equipment that can pull large rocks out of the ground. My Case 420 skidsteer is a mid-size unit that will only pick up 1,750 pounds; however, it’s still a good unit because it’s only 60 inches wide and it can get into small places such as a barn.”

Elgin Equipment Rentals also sells new Jonsered chainsaws, Honda small engines and various new Wallenstein products. “I have Wallenstein chippers and splitters in my rental fleet which all kinds of people have wanted to buy because they want something used. But then I have to replace them. I could have sold my John Deere 20 times in the last three years.” 

Elgin Equipment Rentals also offers some retail items such as new Jonsered chainsaws, Honda small engines and various new Wallenstein products.

In April of last year Weaymouth welcomed a new lumberyard store as a tenant in one of his vacant buildings, which has increased traffic flow to this property by at least 40 per cent and helped his rental business.

Weaymouth knows his clientele well, filling gaps in consumer demand with products and services that complement his rental operation. Thinking outside the box, some items may be considered outside the norm of a typical tool rental company, yet Weaymouth knows the value they have for the company in the big picture. “One item in our rental fleet that is out all the time and is very attractive to customers is our six- by 12-foot v-nosed enclosed trailer. Being in cottage country, people are moving things back and forth from the city all the time. Or people who live out here have kids that go to and from college or university. I purchased that trailer three years ago and it has paid for itself already. There is a demand for certain products not currently being offered. I try to fill that demand and it has worked well for me.”
He says he has several different types of equipment, 10 or 11 pages of documented inventory that he hands out to clients, and he is adding more regularly.

“I’m crawling to walk to run,” says Weaymouth. “I’m starting slowly. I’ve got my three biggest pieces on five year notes so in two years those pieces will be paid for. Then I will add more equipment. I will have two backhoes and maybe a tracked skidsteer instead of just a wheeled one. But that is a few years from now.  I would like to also have a scissor lift and a telehandler. But they are costly. Right now if I have call for them I will rent them from either Battlefield near Kingston or Rental Village in Smiths Falls. We’re 40 to 60 kilometres away from each other so every time I rent from either company they give me a discount so I can still make something out of the deal. In my experience, the other rental companies have been very helpful.”

He says that he has also started to purchase party rental equipment such as small quantities of wine glasses, cutlery, tables, chairs, and dishes. “If I need a large quantity, I’ll rent them from another rental company. Generally, in the cottage country, if someone is having a wedding, anniversary, birthday party or other event, they only want three or four dozen glasses. They don’t want 10 dozen. Rental Village has a big party rental inventory and they are really into tents. So if someone wants a big order, I might rent it for them or just refer them directly to Rental Village.”

Weaymouth was looking for additional ways to complement the rental business so in 2006 he started offering propane swap tanks. “We didn’t do much with them the first year. But in May 2007 an opportunity came along to pick up a big 2,000-gallon propane distribution centre. I got licensed by the Technical Standards and Safety Authority (TSSA) and I started pumping propane for all sorts of tanks from five, 10 and 20 pounders for barbecue tanks all the way up to 30, 40 and 60 and hundred pounders. It immediately started to draw more clientele to the property because people need propane in cottage country. We’ve got 10,000 residents that live here full time and in the summer it grows to 60,000. They are all scattered around lakes all over the place. But they still come to town to buy propane and groceries.”

Using a combination of logic, entrepreneurial spirit and carefully calculated risk, Weaymouth recognizes opportunities overlooked by others: “I don’t technically deliver propane but since there are a lot of lakes and campgrounds around here, I have put cages in those campgrounds with 20 and 30 pound tanks so the campground managers can swap tanks with their clientele. It doesn’t matter if you live in an apartment or a house, in the country or in the city, it has happened to everybody, there is nothing worse than barbecuing and you run out of fuel.”

He explains that the arrangement has worked well because it is a convenience for customers. “They may need a 20-pound tank of propane for their barbecue or a 30-pound tank for their RV, most swap companies do not swap or trade 30-pound tanks. I have taken the initiative to put them in campgrounds so if people run out in their RV they don’t have to get in the car and drive here to get them filled; they can swap one. So it is a little niche market that I am slowly building up. I am picking up two more campgrounds this summer for a total of six with 20- and 30-pounders in them. It is providing a needed service to the area, it is enhancing my propane business, and everybody knows that Elgin Equipment Rentals is doing this.”

Being in the rural community with limited competition has its advantages; however, as with all businesses in a global economy the company is not shielded from rising costs. As Weaymouth explains, even with prices rising, there is a lot of value to providing diversified products and services at a competitive price. “The price of propane has been going up like every other fuel. Not as much as diesel or gasoline, but it certainly has increased in value. We’ve held the price steady up until recently when I had to raise it. However, I’m still cheaper than anyone in the area. If it doesn’t go up crazy this summer I’ll be holding the price where I am right now. Propane is certainly going to permit me to be profitable in five years rather than seven years. It has drawn more people to the property. It helps cash flow turnover and it’s a product that everyone uses now. Propane was a very good thing to bring onto my property. I’m not big like the national companies, but I’m trying to carve out a niche market here and it’s working.”

Last year, some former employees of the lumberyard where Elgin Equipment Rentals is located asked Weaymouth if they could rent one of his buildings and some of his outdoor space to set up a lumberyard again. Weaymouth agreed and after performing some tenant improvements, a brand new lumberyard opened up in April 2008. “They have done very well and have exceeded their expectations for the first year. They are taking more building, yard and rental space from me as well as they are bringing in more lumber and related products, all the time.”

Weaymouth says the lumberyard has increased traffic flow to this property by at least 40 per cent, which is helping his business by about 10 per cent. “They did so well in their first 12 months, now they are a regular lumber store with a professional showroom.”

With extra room and steady traffic, Weaymouth is embarking on yet another opportunity to cross-sell to customers throughout the Rideau Lake Township. “This spring I’m bringing in annual flowers for May, June and half of July. Potted plants, geraniums, marigolds and ivy; the things people plant every year. With the cottage country people, they like to buy baskets that are already done. They put them on their decks and don’t need to worry about them. A lot of cottage properties are rocky or have thick brush and trees and don’t have a lot of gardens. We believe that we’ll see a return on our investment immediately but it will only last two and a half months. If it works, I may make it a permanent feature. I have the room to build a temporary structure and expand next year. At the end of July I can take it down and it just disappears.”

He says the people the lumberyard is drawing in will help the flower business. “I think it will add to my cash flow early in the spring. I may also consider bulk landscape material such as mushroom manure, black soil, sand and pea gravel.  I have the room so I may sell that as well.”

All of this is designed to complement the rental business. Weaymouth estimates his customers are broken down to approximately 30 per cent cottage owners, 30 per cent homeowners and 40 per cent contractors. Contractors who rent cement equipment and hydraulic breakers use propane. Cottage/homeowners who rent wood chippers and chainsaws also use propane. All of them are also customers of Elgin-U-Stor-It. “They rent my equipment and if I have these other things here, then it will certainly provide a service and enhance our ability to serve the public.”

In order to keep customers up to speed with what is happening at Elgin Equipment Rentals, Weaymouth has successfully enlisted the services of bulk mail marketing with Canada Post. “Canada Post will deliver an 8.5- by 11-inch flyer for 10 cents each. Every spring I send it out to 3,500 households. With printing, the whole thing costs me $500. We estimated that 20 to 30 per cent of the flyers would go straight in the recycling bin, but the first year I had the propane, I put a coupon on the flyer and it was amazing how many people brought them in. It worked and I’m going to do the same thing this year with the flowers.”

Weaymouth stresses the importance of offering complementary products and services, “When couples come in the men drool when they are looking at the John Deere tractor backhoe, they want to drive it. I often hear them saying to their wives, ‘we could use this for this or that.’ So if they come in to use a coupon for the flowers, I know I’m going to have some spin-off on my equipment rentals. I know I am.”

Additionally, Weaymouth reinforces his marketing efforts through strategically placed advertising in the bold print telephone directory and local vacation/leisure guides that cover seven small villages within 20 kilometres of any direction from his office. “It’s expensive but it’s working. The ads and the annual flyer really give me return on my investment.”

Weaymouth is a rookie in the rental business but he is not green when it comes to exploring new careers. Originally, he was a police officer in the Canadian Air Force and then a senior regional security officer for Foreign Affairs Canada. In 1987, Weaymouth retired from Foreign Affairs and set up his own security design and engineering firm. He travelled frequently around the world providing consulting for security design and personal safety applications on a vast assortment of high-profile projects. “Being an Air Force policeman and then going to Foreign Affairs and being in the security engineering and design business taught me how to think things through in a logical manner. And that is basically what I am trying to do with these businesses.”

“I was an international traveller and that wears you down. I’m 61 now and theoretically I should be retired,” Weaymouth chuckles. “But I am running two businesses. I’ve wound down my engineering and consulting firm. Dealing with international customers and clients in Calgary and Toronto and Montreal and Ottawa all the time, it is quite demanding and I can’t spend the time doing that if I am here growing these businesses. It was time at 60 years old to step back from the consulting world anyhow. I’m actively involved eight to 12 hours a day. To me, I’m semi-retired and enjoying it. It’s a fresh change. I’m not one to sit around.”

With 56 per cent growth in February 2009 alone, Elgin Equipment Rentals is not standing still. Last year the company grew 21 per cent over the previous year, even with sales down 50 per cent in December 2008 over December 2007, due largely to 20 days of snow and freezing rain. “I don’t think I’m going to continue that astronomical growth but if I can maintain 21 to 25 per cent increase in 2009, then I will have turned the page and made a profit within five years.”

Echoing the views of many rental companies across Canada, Weaymouth remains optimistic about the economic future of the industry. “Speaking to people in the rental business who have been around when there have been dips in the economy, my understanding of a recession and the rental industry is that it will not affect me. I’m not in the city where the contractors are slowing down.  The cottagers will still come and instead of hiring a contractor to do work for them, they will do it themselves. They are going to need the equipment and chances are they aren’t going to buy it because they are going to watch their pennies. I’m still in a growth pattern and the things I’m doing are still drawing people to my property so I’m not feeling the pinch.”

Future plans include building an office and a showroom. “I’ve got the building permit. I just haven’t acted on it yet. It’s going to be a 24- by 38-foot regular rental showroom with stuff hanging off the wall and equipment on display shelves. All our stuff right now is either in the yard or in the workshop. I will probably also sell and service more equipment when I have my showroom. I’ve been talking to the Milwaukee distributor and he would like to set up a display here but I can’t do that without a showroom.”

Weaymouth reiterates his mantra about controlled growth at a steady rate. “It’s a cash flow thing. It cost me money to prepare the space for the lumberyard to move into, but I got that back in the first year’s rent and they have another two years on their lease, but they are doing so well, they aren’t going anywhere. The lumberyard is also taking more space this April so I have to replace that space by building another structure for storing boats, motor homes and vehicles.  Either this summer or fall, maybe I’ll add on to that building.”

He says that in business priorities change all the time and rental operators need to be flexible.

“We’ve got out of the crawling stage and we’re walking now and I just want the momentum to continue. I don’t see the recession hampering that just yet. I’m new to the rental industry but we’ve taken the common sense approach to providing a valuable service to the public and it seems to be working.”

Rich Porayko is a professional writer and founding partner of Construction Creative, a marketing and communications company located in Metro Vancouver, B.C. richp@constructioncreative.com .