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EARNS IN TURNS
THE ART OF PERFECT INVENTORY
In the tent rental business, understanding the phrase “earns in turns” is essential. For most tent rental business owners, there are times during the year when you make most of your money, and times when income only trickles in. But it makes sense. People are more apt to throw outside celebrations in warmer weather than in cold, which means tent rentals are more commonly needed during the warmer seasons of the year. However, one often overlooked aspect of earns and turns is inventory. Great businesses all have one thing in common: great management. And part of great management is the ability to successfully manage your inventory. During the busy times of the year when cash seems to flow in endlessly, you often feel as though there is no space in your storehouse. People are coming and going, equipment is out and ready for use, and your tents come in and out faster than you can blink.
If your shelves are empty, you know your tents are out making money. You also notice, then, that you are in need of more tents for your growing number of customers. Not having enough inventory can hurt your bottom line and your reputation. Your inventory should be large enough that you don’t run out of tents during your busy season. But what is much worse, in my opinion, is when tent rental businesses have inventories that are too big. When you have too much product, you have made a terrible investment. The only ways you can buy inventory as a business owner are as personal, out-of-pocket investments in the company, or with company funds. Money is hard earned, and when unused tents are sitting on your shelf, you know the money you’ve spent has been wasted. The key, then, is to find the balance between too much and not enough inventory. This can be tricky, and not many have mastered the art. I firmly believe that in the tent rental world, the time between when a tent is rented out and when it is back on the shelf and ready for the next customer determines the amount of inventory you need in your storehouse. Think about it. When a tent comes back from a job, it often needs maintenance, cleaning, and an inspection before it is ready to go out again. When you can minimize the time your tent spends in repairs before it is back on the shelf, you will maximize your profits. The quicker you can get your tent through the cleaning process, the faster you can use your inventory, and the less tents you need. I’ve found that the companies who can get their tents ready for rent within 10–24 hours of them being returned to the storehouse have the smallest inventories and largest profits for their customer base. Fast turnaround means more money for you and less money wasted on poor investments.
–Steve Arendt
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