The story of Equipment Rental Profiles Building a Stronger Rental Business often begins with a company recognizing that its core market is shifting and that survival depends on strategic diversification. Precision Rebuilders, based in Lexington, Tennessee, provides an instructive case study in how a business can successfully transition from specialized rebuilding services into profitable equipment rental operations. What started 27 years ago as a shop rebuilding alternators, starters, and hydraulic cylinders has evolved into a thriving rental enterprise with a diverse fleet serving construction contractors across the region. This article examines the key decisions, partnerships, and operational principles that enabled that transformation.
From Rebuilding to Rental: A Strategic Business Pivot
Recognizing the Need for Change
Keith Garner, owner of Precision Rebuilders, saw early signs that the rebuilding industry was evolving in ways that could threaten the long-term viability of his business. Rather than waiting to see how the market would reshape the company, Garner took a proactive approach. “As we noticed that the rebuilding industry was evolving, we got a little concerned about the future,” Garner recalls. “We decided to diversify. About 15 years ago we purchased a single trencher and we started renting it.”
That first trencher represented a modest beginning, but it opened the door to an entirely new revenue stream. The decision to enter the rental market was not a dramatic pivot but a gradual, measured expansion that allowed Precision Rebuilders to learn the rental business while still maintaining its core rebuilding operation.
Building the Fleet One Machine at a Time
Precision Rebuilders did not attempt to build a full rental fleet overnight. The company followed a deliberate growth strategy that Garner describes simply: “We just started to buy a piece of equipment here, a piece of equipment there.” This incremental approach allowed the business to test demand for different equipment types, manage cash flow carefully, and develop rental expertise without overextending resources.
Over time, this patient accumulation strategy produced a substantial and diversified rental fleet. The current inventory includes:
- Nine excavators ranging from compact to midsize models
- Six skid steer loaders for general site work
- Compact track loaders including the KATO CL-35
- Boom lifts and scissor lifts for elevated work
- Telehandlers for material handling on job sites
- Concrete mixers for small to medium pours
- Forklifts for warehousing and construction logistics
- Light towers for nighttime and low-light operations
- Equipment trailers for transport between job sites
- Trenchers for utility and excavation work
- A large assortment of attachments for specialized tasks
This broad equipment mix enables Precision Rebuilders to serve a wide range of contractor needs, from excavation and grading to material handling and finishing work. The diversity of the fleet also spreads risk across multiple equipment categories, reducing the impact of seasonal fluctuations in any single segment.
Why Equipment Reliability Defines Rental Business Success
The True Cost of Equipment Downtime
Every rental operator understands that equipment availability is the foundation of the business. Each hour a machine sits idle represents not only lost rental revenue but also potential damage to customer relationships and reputation. Contractors depend on rental equipment to meet project deadlines, and a machine that fails or becomes unavailable undermines trust in the rental provider.
Precision Rebuilders learned this lesson the hard way. Garner had been loyal to a particular equipment supplier for years, but parts availability became a persistent problem. “I would wait up to four days to get parts,” Garner explains. When a critical issue arose with a new excavator model, the situation escalated dramatically. Within the first year of ownership, the machine required three engine replacements. While the supplier covered the work under warranty, the operational impact was devastating.
“I lost my whole rental season that year,” Garner says. “I did not get to make a bit of revenue off that piece of equipment the whole year because the supplier had to take that piece of equipment in, diagnose it, and it was a process to get the engine and install it.” The financial loss from a single unreliable machine was severe enough to force a fundamental reassessment of Precision Rebuilders’ equipment sourcing strategy.
What Precision Rebuilders Learned to Look For
The experience pushed Garner to evaluate equipment suppliers based on criteria that go beyond initial purchase price. The key factors that emerged from this reassessment included:
- Parts availability and proximity — Having a local or regional parts warehouse can reduce downtime from days to hours. A supplier with a nearby distribution center provides a critical operational advantage.
- Reliability claims backed by reputation — Talk to other rental operators and contractors who have actual experience with the equipment and the manufacturer support system.
- Ease of maintenance — Machines designed with accessible service points reduce the time and labor cost of routine maintenance and emergency repairs.
- Responsiveness to customer concerns — A manufacturer or distributor that listens to feedback and acts on it is far more valuable than one that treats customers as account numbers.
Partnering with KATO Compact Equipment for Long-Term Growth
Discovery at the ARA Show
After the costly experience with his previous equipment supplier, Garner attended the American Rental Association show specifically looking for alternatives. He noticed significant activity around the IHI Compact Excavator Sales booth. Ara Rental Industry Forecast 2022 What Equipment Rental trends pointed to growing demand for reliable compact equipment, and the crowd at the IHI booth suggested that other rental operators were reaching similar conclusions. Garner began making inquiries and heard a consistent message: IHI equipment was durable, easy to maintain, and supported by readily available parts from a warehouse in Elizabethtown, Kentucky.
The location of the parts facility proved to be a decisive advantage. “If you are in the central United States, you pretty much have one-day service and every part they have is warehoused in Elizabethtown,” Garner notes. For a rental business where every hour of downtime matters, having parts within one-day shipping range was a major competitive benefit.
Evaluating Equipment: KATO vs. Competitor Offerings
When comparing compact equipment options for his fleet, Garner focused on specific, measurable attributes that directly affect rental operations. The table below summarizes the key comparison factors that drove the decision toward KATO equipment.
| Evaluation Factor | Previous Supplier | KATO Compact Equipment |
|---|---|---|
| Parts delivery time (central US) | Up to 4 days | 1 day (from Elizabethtown, KY) |
| Engine brand | Various | Kubota (widely recognized) |
| Machine complexity | Complicated touchscreen controls | Simple, user-friendly operation |
| Maintenance accessibility | Difficult access to service points | Better component accessibility |
| Manufacturer responsiveness | Slow, warranty-only support | Open to feedback and suggestions |
| Customer relationship | Treats customers as numbers | Personal, family-run approach |
A Partnership That Listens and Adapts
IHI had been distributing Japanese-built machinery in the United States since 1994, offering crawler carriers, mini excavators, skid steers, track loaders, and concrete buggies. The company was family-run by Mike and Markie Smith, who built a reputation for responsive customer service. In November 2016, KATO Works, a Japanese manufacturer of large hydraulic excavators and cranes, acquired IHI to expand into the compact equipment range. The U.S. distributor changed its name to KATO Compact Excavator Sales, but the ownership transition did not affect the customer-focused culture that had attracted Precision Rebuilders.
“The people do not treat you like a number, they treat you like they care about you,” Garner says. “If we run into any issues, they are very accessible with information. They will take any suggestions that I might offer. We have been in business for 27 years, so if there is something we are struggling with and we want to make a suggestion, they are always open to that.”
This collaborative relationship has produced tangible improvements. When Precision Rebuilders purchased a new Tier 4-compliant CL35 track loader, Garner noticed that KATO had improved the bucket quick-attach lever operation based on user feedback. “They have improved the way the bucket quick attach pins and levers operate,” he notes. The joystick controls on the new machine also drew praise: “Everyone says the controls are really responsive. It is powered well for the size of the machine.”
Practical Lessons for Rental Fleet Operators
Ease of Use Reduces Training Burden
For a rental business, the ease with which operators can learn a machine directly affects administrative costs and customer satisfaction. “A user-friendly machine is much easier for us from an administrative standpoint because it does not take as much time to train operators,” Garner explains. “If it is a real complicated touch screen, it is a real learning curve. We like simplicity better than we do a complicated touch screen.” The lesson for fleet managers is clear: equipment with intuitive controls and straightforward operation reduces the time spent on customer training and lowers the barrier to rental for less experienced operators.
Maintenance Accessibility Drives Long-Term Costs
Ease of maintenance ranks equally high in Garner evaluation criteria. Machines that require significant disassembly to access routine service points increase labor costs and extend downtime. “That is very important to us,” Garner says. “It was one of the things that persuaded me to look toward KATO. The people I talked to said the accessibility on the KATO equipment was much better than competitor models.” For rental operators evaluating new equipment, examining service point accessibility before purchase can prevent years of frustration and excess maintenance expense.
Building a Reputation That Sells Itself
One surprising outcome of Precision Rebuilders disciplined approach to equipment maintenance is that the company often sells its rental machines sooner than planned. “I usually sell my machines before I want to sell them because we have a reputation of maintaining our equipment very adequately,” Garner says. While Precision Rebuilders aims to keep machines until they reach 2,500 to 3,000 hours, customers frequently make purchase offers during the rental period. A recent example involved a CL35 compact track loader with less than 1,500 hours. “A customer picked it up last week,” Garner recalls. “He paid one month rent on it and then called back to negotiate a sale price.”
This pattern demonstrates that meticulous equipment maintenance and strong customer relationships create value beyond rental income. Point of Rental Conference 2022 Rental Software Insights highlight how modern rental management tools can support this kind of customer engagement, and Evaluating Rental Equipment At the Rental Show 2010 offers additional perspective on how trade shows help fleet managers identify the right partners for their operations.
Precision Rebuilders journey from a rebuilding shop to a successful rental operation offers practical guidance for any equipment business considering diversification. The keys to the company success include starting small and scaling deliberately, prioritizing equipment reliability and parts availability above initial purchase price, choosing manufacturers that treat customers as partners, selecting machines that are easy to operate and maintain, and maintaining equipment to a standard that builds a reputation worth more than marketing spend. For contractors and rental operators looking to strengthen their position in the equipment market, these principles provide a proven foundation for sustainable growth.