Interview: Don’s Rental on the struggle of the independents

If you ask Dave Dworschak how business is going, he’ll tell you it’s not like the corporate quarterly reports say, or how the leading trade associations make it sound - at least in his neck of the woods.

Dave Dworschak, president and owner of Don’s Rental in Saint Helens, Oregon, in the US, talks about the challenges of running an independent rental company. (Photo: Don’s Rental)

Dworschak is the second-generation owner of Don’s Rental in Saint Helens, Oregon, in the US, an independent “mom and pop” equipment rental company located about 30 miles outside of the Portland metro area. Dworschak wants the record to show it’s not all cupcakes and rainbows for the smaller companies out there.

We chatted with the lifelong rental veteran in New Orleans while attending The ARA Show, Feb. 19-21. Following is his candid account of the things keeping him up at night and his vision for the future.

Rental Briefing: What is your rental company’s story?

Dworschak: My dad [Don Dworschak] started Don’s Rental in 1967. I’m the only child and now president of the company. Things have generally been good; we’ve been through a lot - a recession, a pandemic, the housing explosion and subsequent crash... it’s been a ride.

Through the 90s we changed gears from being construction focused in a mill town, to now being a homeowner store, since the contractors and the mills either went away or went bankrupt.

I’m used to changing gears, but this last time snuck up on me. All of 2023 seemed rather slow; then this winter was a lot more down than I expected. Reading the media here and there, I’ve seen reports of record-breaking corporate numbers. I started asking around, and nobody in my region - nobody that I’ve talked to - is having a good year. And after being at the Northwest Rental Conference, nobody I talked to in Washington state was having a good year either.

Our income is down – only 10% - but that’s just one part of the equation. Equipment is a lot more expensive right now than it was a few years ago. I’ve been raising my prices some but I’m trying to figure out how far up I can go.

I’m using Rouse Analytics to try to figure how my rates stack up. I go out and check all of my friends’ stores in the Portland metro region to see where they’re at. And when I look at Rouse, I’m at the bottom of their maps, but I’m not exactly the lowest one among all of my friends. Sometimes I’m the highest and I’m still at the bottom of the barrel, according to Rouse.

Rental Briefing: How are your customers receiving your higher rates?

Dworschak: I’ve not had any major pushback or complaints about my pricing. But as I compare myself to the Portland market, I’m in the middle of the pack, or maybe a smidge high on some of my equipment, in comparison. I’m not trying to gouge my customer base by any stretch of the imagination, but it always feels weird, me being the quote-unquote price leader.

Rental Briefing: How much data analysis and digitalization are you doing at your company?

Dworschak: I’m reasonably tech savvy, but to say that I’m going out every month and analyzing what my utilization is... no.

Rental Briefing: What other issues concern you?

Dworschak: I’m just trying to keep my equipment from wandering away. I’m still working on training my new or front counter staff to ask questions: “Why are you renting this from us when you’ve driven by three other rental stores to get here?”

We’ve had people come in and rent a couple of generators on a Friday afternoon at closing, for example. They’re 40 miles from home, they’ve clearly driven by rental stores on the way here. It doesn’t make sense. Sometimes they just don’t show back up and then their phone gets disconnected.

Rental Briefing: What do you think are the solutions to the challenges you’re facing?

Dworschak: There are only two things you can work on - cutting expenses and increasing revenue. It’s going to take a combination of both, so I’m raising my prices some, and I’m cutting out the stuff that I don’t need. My buying this year at ARA was slim to nothing.

I might analyze staffing again and it could be that I’ll be putting in more hours myself. And my paycheck may just have to get cut. I just need to get through until spring, but in the Pacific Northwest, that could be next week or it could be June.

Rental Briefing: What are the most critical issues for independent rental businesses?

Dworschak: Finding trained help is not possible, not in the rental business. You have to train anybody and everybody, and that takes time and investment. The old business buzzwords of getting lean and getting mean apply.

My closest competitor is 20 to 25 miles away in either direction. That said, there was a guy who just put a sign up on the side of his fence about seven miles away saying, “Rent Me” and had some excavators and loaders sitting out there.

That took a huge chunk of my business away. That particular person had no storefront, just a sign on a barbed wire fence; no prices listed anywhere. You had to call him to find out what the pricing was, and he would deliver to you and pick it up from you. When he stopped doing that, for a while, my business increased 15% to 20%.

We don’t have any Home Depots, United only deals with big contractors. There are some independents but there are just not a whole lot of them out there.

Part of the challenge is the economy of my area. I’m in my own little pond, but we lost another manufacturing plant last summer that provided probably 100 jobs. There goes another 80 to

Don Dworschak opened a vacuum cleaner sales and service business in the 1950s and by 1967, it had evolved into Don’s Rental. (Photo: Don’s Rental)

100 homes and customers.

I’m trying to figure out which way to pivot next. I went from construction and contractors to homeowners. And the homeowner rentals have been pretty good.

I’m also a U-Haul dealer. It’s one way of getting a feel for what’s happening in the market, but my income on U-Haul was down probably 5% or 6% last year.

Rental Briefing: How do you age your larger pieces of equipment? Are you keeping them longer than you used to?

Dworschak: At one point, it was like we were using bubble gum and baling wire just to try to keep stuff going. If you can’t get new stuff, you gotta keep the older stuff running. I was dropping all sorts of money and keeping some stuff that I should have let go, but there was nothing to replace it with.

We’re starting to get new machines now without too much difficulty. But the lag kind of bollixed up my normal spending rotation and interest rates are stupefying.

Normally, after three years I should be at about 1,500-ish hours on equipment - that’s about 500 hours a year. If I’m getting only a couple hundred hours in a year on two or three machines, either my staff haven’t been rotating them enough, or I’ve got too much equipment and I need to sell.

The national chains have a team of well-paid people who are into numbers, so they’re much better at number crunching than I am. Market analysis of this and that and everything else ... at a certain point, it’s all just voodoo.

Rental Briefing: Do you sell used equipment?

Dworschak: Slim to none. With me being in such a small area, my market is probably about 25,000 people. I don’t want to sell breakers and excavators and dilute my market in the process. So I’m sending stuff to auction, away from my area. Otherwise, I’m effectively putting a piece of equipment in somebody’s hands who might have rented from me.

Rental Briefing: Is the traditional way of doing business just changing?

Dworschak: Possibly. One of my friends is significantly younger, he’s probably in his late 30s. The business that he’s running was passed down from his grandparents to his parents, and uncles, and now to him and his cousins. He’s doing more number crunching than I am, by far, and doing some very creative stuff. But at the end of the day, you’re still making stuff out of old cloth sometimes.

Rental Briefing: How is your staff? Do you see much turnover?

Dworschak: I’m running around nine to 10 full-time employees, and I’m probably losing about one person a year and then replacing. It’s fairly stable.

Rental Briefing: What do you see for the future?

Dworschak: We’re going to wait and see how 2024 shapes up. If it’s another tough year, we’re going to have a “come to Jesus” moment somewhere, some way.

I don’t want to make a ton of changes willy-nilly; I don’t want to be reactionary. But, I’d like to take a look around and just see how things are going. Something’s going to have to change if things don’t turn around somewhat.