Rent-to-Own

Bank Financing, Root Canals and Appendectomies by Rory Rowland

The Alchemy of RTO Human Resources by Margaret Harrist

And Now A Word From Your Employees: What They Think About RTO by Ed Winn III

 

 

 

 

 

Bank Financing, Root Canals and Appendectomies
By Rory Rowland

When your tooth hurts, you reluctantly go to the dentist. When you get sharp pains in your lower abdomen, you call the doctor. And when your business needs money, you go to the bank. While root canals and appendectomies are best left to medical professionals, this article should be able to help you get better and faster bank financing. One of the first things a banker will want to know when you sit down and ask for a loan is, why? Why do you want and/or need bank financing for your business? The second thing the banker will ask is what do you plan to do with the money?

These are two of the most important questions to which your banker will want good answers. If your answer is that your business is profitable and you want to open another shop, that is great as bankers love that kind of success. If one of your answers is oops, things haven’t gone so well this year and you need operating money, you will probably get a sympathetic look, but not a check in your hand.

Be Prepared: The Business Plan

Before you head out the door, the first thing you need to have is a solid business plan. The easiest way to create a business plan if you don’t already have one prepared is to purchase some business plan software. These programs walk you through the process and allow you to fill in the blanks. For example, Business Plan Pro from www.paloalto.com is a good planning tool to help you get your business plan started. A banker will not consider your request seriously unless you have a complete and detailed business plan.

Another good Web site for business planning is www.businessplans.org. This site gives you a variety of resources to start the process of creating a business plan. Business Plan Software is also a good site because it includes free examples, free templates, outlines and sample plans and tips for how to write a business plan. You can find these at www.brsinc. com and can even download the software from the Web site.

Again, if you don’t have a business plan and plan on visiting the bank soon, you are going to need one. You won’t get very far in your business without a business plan.

Another business plan resource is your local Small Business Administration office. You can find the SBA in your Yellow Pages or on the Internet at www.sba.gov. If you feel more comfortable formulating your business pla n with a live person who won’t cost you an arm and a leg, contact SCORE – Service Corp. of Retired Executives. You can find this organizations on the Internet as well at www.score.org. A retired executive who volunteers to serve with SCORE may help you put your business plan together.

To help you navigate the waters a bit more easily, you may want to find a mentor – someone who has been there and done that. Mentors can be other business owners from your area or rent-to-own operators in other parts of the state or region. Ask if they have obtained financing for their businesses and if they would be willing to help you. This can be a great way to get additional information about the financing process.

The Bank’s Business

Once you have your business plan prepared, your neighborhood banker will want to know what you plan to do with "their" money. Yes, they consider it their money. Bankers have three concerns when they loan you their money:

• Will they make money on the deal?
• How will it improve their bottom line?
• And yes, will they get their money back?

 

For obvious reasons, bankers are attached to their money. However, when you borrow money, these items are not really your concern. Your interests lie in how soon you can get the banker’s money and put it to good use – that and keeping the payments as low as possible so you can use it longer. In between lies the compromise between the banker and you.

Here are some of the questions the banker will want answers to before you are loaned any money:

• Is your business growing and is that why you need the money?
• Is your business cyclical? This is important for a payment structure.
• What is your credit history? If your company is new, how will it be capitalized and who is backing the company?
• Have you been successful before in this type of business?

 

Bankers love success stories, and bankruptcies in your past scare them to death. This is very important; without some success in this business, you will not get financing.

• Has the business had credit problems?
• What is your customer base and how often do they do business with you? What are the tangible assets of the business and can the bank use them as collateral?

Bankers also will want to know about the size of the down payment or your contribution to the cause. They believe that the greater the involvement on your behalf, the greater the likelihood of getting repaid.

 

How Big is Your Payroll?

If your answers meet the satisfaction of the banker, you are on your way to obtaining bank financing.

Another important thing to remember is that just because one bank doesn’t loan you the money, it does not mean anyone else won’t. Learn from the process. Harvey McKay, author of Swim with the Sharks without Being Eaten Alive, tells the story about how he obtained financing for his first business. He would get rejected, ask why and then use the information to improve his business plan. He wrote that after 18 rejections, he had a pretty good business plan.

It’s All In The Numbers

Once you have your business plan together, what other information will you need to bring with you to the bank?

Jim Jaklevic, vice president of Brotherhood Bank in Shawnee, KS, says he needs to see a copy of the company’s most recent financial statement. Jaklevic says that when a client has a business plan and orderly financials, they are off to a running start. Organized information is critical. Tax returns from the past three years are important – both personal and business tax returns. Bankers want to see the financial performance of the individual and of the business. Have them ready when you walk in the door. You will also need to have a cash flow analysis of the business. If you provide good financial data with an effective business plan, you are well on your way to receiving serious consideration for a loan, says Jaklevic.

Craig Nichols, senior vice president of First National Bank in Overland Park, KS, says he wants to see detailed projections on the numbers. "What will happen with the financing? How will it impact the future of the business? How will your financial statement look in two to three years with the new financing?"

Another important item the banker will want to see is the cash flow analysis of the business. The cash flow analysis basically consists of total income for the business, minus expenses, minus debt service and then your lifestyle. The more conservative you are, the better you will look to the banker. Questions that might be asked include: Do you have the resources to weather a rough road? Can you handle a financial setback and still repay the loan? Cash flow analysis will help determine your financial stability.

Education is a Two-Way Street

Nichols says he also looks at whether the business owner understands the business. "Someone off the street with no experience is not the type of client banks are looking for to lend money. We are looking for business relationships that will enhance the bank and help the client. We are experienced in lending money; we want the business partner to be experienced in using the money wisely," he says.

Dan DeVasto, CEO of Wolf & Co. PC, a Boston-based accounting firm, advises that before approaching a bank for financing, he makes sure he has every relevant scrap of data on his client: a mission statement, list of products and services, outlook for the industry and a description of the competition. Typically, he approaches a bank with a 15- to 25-page spiral binder detailing this information. "The key is to have the banker thoroughly understand the business," says DeVasto.

It is also just as important that you understand a little about the lending institution you go to. Do your homework before approaching a particular bank. A great source of information about a bank and how receptive it is to business loans is local accounting firms. Bankers network furiously and CPAs are among the people they court most ardently because CPAs’ clients are a promising source of new business. Thus, the first step is easy: contact your CPA or start a relationship with one. "We absolutely actively seek out CPAs," says Hattie Hamlin, a vice president at Crestar Bank, a regional institution headquartered in Richmond, VA.

Also, find out who makes loan decisions at the bank. Ideally, the local loan officer who now understands your business is the decision- maker. That leaves latitude for personal judgment. However, merger mania has grown many banks into impersonal Goliath’s. Loan decisions that once were made by individual bankers at the local level – people who knew their customers well – may now be made by computers programmed for automated credit scoring.

In other words, loans are approved or rejected based on a strict formula that takes into account factors such as a client’s income and number of years in business. In too many cases, the loan-approval process has become formulaic, anonymous and committee based. You are not going to be served well by a bank that does not take a personal interest in you, especially if you have a credit history that is less than stellar. Inquire about the bank’s lending formulas. What will the bank accept as collateral? Most banks accept a company’s inventory as collateral on a loan; some also accept real estate holdings. Determine what percentage of the collateral’s value the bank is willing to lend against. Will it advance 70 percent of the value of inventory or 80 percent? And what is the bank’s lending limit? If you represent a fast -growing client, a $50,000 loan ceiling may quickly become too small.

Personal Guarantees

Then there’s the question of personal guarantees. Many business owners balk at backing up loans with personal guarantees because it puts their homes and cars at risk should the business fail, but bankers want to see a level of commitment. For example, how much are you willing to risk before they risk too much? The banker wants to be a partner in the loan, but not the holder of the entire loan.

Alternatives to Banks

If banks seem reluctant to meet your needs, look to alternative sources of financing. As mentioned earlier, you may want to contact the Small Business Administration. The SBA’s loan regulations are immensely complicated, so you’ll need to approach a bank that has experience in this area. To find one, go to your state or district SBA office or visit the SBA Web site (www.sba.gov). You might also look to industrial finance agencies, venture capital firms or high-risk asset lenders, among others. Check with the state CPA society as some states have a committee on alternative financing sources.

Another source could be "angels" or private investors (venture capitalist firms) who back your company right from the beginning. The amount of control angels want varies. Some are very hands-on, others are not. You can combine venture capital contributions and bank financing, if necessary, to get your business off the ground. However, make sure you reveal this source of funding to your banker. Denver-based DataMerge Inc. provides a number of interesting Web links through its home page at www.datamerge.com. DataMerge’s Financing Sources Databank is a national database of alternative lenders and equity investors, including profiles of their lending policies or investment criteria. The company also offers loan proposal software.

Again, when approaching a banker, the SBA or a venture capitalist for financing, you need to be organized, prepared to answer questions. You will also need to explain what you want the money for and how you will use it. If you have a clear game plan and a track history to show you know what you are doing, then you are well on your way to obtaining the bank financing your growing business will need. And it shouldn’t require medical assistance.
 

 

The Alchemy of RTO Human Resources
By Margaret Harrist

Finding the right combination of employee benefits and programs for your company may seem a bit like modern alchemy. Add in the unwelcome catalyst of an extremely tight labor market and many rent-to-own companies across the nation are struggling to recruit and keep staff on board. Is there an elusive, secret formula that can help companies hire and retain top-notch employees? To find out, APRO hired America’s Research Group to conduct a telephone survey of current rental-purchase employees. Employees were asked 40 questions to gauge their attitudes and opinions about their jobs, their employers and the rent-to-own industry.

The survey results reflect the comments of a wide range of employees, including sales, store managers, account managers, assistant managers, delivery personnel, secretaries and others. Overall, the survey indicated that employees consider rent-to-own a good place to work, but pointed to a number of areas where improvements could be ma de. But before tweaking components of your human resources program, "It’s important to look at the overall human resources system you have in place," says Keith Carrico, owner of Innovative Insights, a consulting firm that specializes in providing human resources services to mid-sized companies.

"Employee relations is truly a balancing act," he says. "There is a chain reaction when problems take hold in human resources; each factor affects another. It really is hard to see the forest for the trees and when you keep running into the same tree, it’s tempting to just cut that tree down. But the real solution is to review your company’s human resources system regularly because employee needs and market forces change over time."

Hiring And Keeping A Great Team

Two of the biggest issues for rent-to-own companies is developing a compensation system that truly reflects job responsibilities and then putting in place a system for developing employees, Carrico says.

"Pay and training go hand in hand," he says. "If you are good at developing employees, but don’t pay enough to get the right people through the door in the first place, you won’t get the results you’re after. And if you promote employees through turnover, but don’t train them adequately, it shouldn’t be a surprise when those employees don’t do well."

Almost half of the employees surveyed said their initial training was on-the-job – a method that does not provide consistent messages across a company. "Unfortunately, training tends to get shortchanged in many instances," Carrico says. But that isn’t the case at Showplace Inc., a rent-to-own chain with 23 stores in northern Ohio. Employee development is a key component of the company’s human resources program. "We have about 150 employees and there is someone in training 60 percent or 70 percent of the time either in the corporate office, regionally or in a store location," says Gary Ferriman, company president. "We’re fairly entrenched in the management theories of FranklinCovey and have several licensed Covey trainers on staff. We invest a lot of time, money and effort in training."

Like other rent-to-own companies, Showplace struggles most with hiring and retaining entry-level employees, says Ferriman. "We’re starting to use the Covey philosophy in developing a competency management program that should help in this area. We’re asking our outstanding employees in each job category to identify the important competencies involved in their work. We’ll then design our interview questions based on that information to better gauge whether potential employees will be successful in that position. After employees are hired, we will periodically identify competency gaps and provide the resources – including training, reading materials and a mentor – to help them to imp rove." Ferriman adds that the competency management program is just getting under way and will probably take a few years to fully implement. "We don’t have a formal career path for employees, but that’s what this program is intended to do," he says.

At Rent-A-Center, a chain of 2,100 stores that employs some 12,000 people, competency tests are used at the pre-employment stage, before promotions and to help design the company’s training programs. The company provides new employees with training on the basic s of rent-to-own and subsequent training that uses the company’s actual financials. "Some 99 percent of our managers started out as hourly employees, just learning the basics," says Marty Roustio, who joined the company as an account manager in 1990 and is now manager of coworker relations. "I think the opportunities with this company are unbelievable."

Money And Advancement

Money matters ranked high on the list of surveyed employees, with 60 percent stating they’d rather have higher pay than any other benefit. In addition, more than 40 percent said that low pay or poor benefits at their company prevents them from recommending it as a good place to work. Roustio says that, according to his company’s research, Rent-ACenter is one of the highest-paying rent-to-own companies, with account managers starting at $30,000. "Our turnover still varies according to the job level, but I believe our high rate of pay helps get more people in the door. We don’t have a problem hiring, but that doesn’t guarantee a good fit," he says.

KLQ Enterprises, a 17-store chain located in Washington, has found that a holistic view of the business and its employees is a good approach. "Our philosophy is that we don’t have drivers and salespeople; we don’t put people into pegs. Everybody is being trained to learn every part of the store. We believe that the people making deliveries are extensions of the sales people; if they don’t understand the sales process, they’re a hindrance to us out in the field. We educate our people on how the industry makes money and make sure they understand how each part of the store contributes to that," says Kevin Quinn, KLQ president and former APRO president.

All but one of KLQ’s 17 current managers started out with the company as account reps and the shortest-tenure manager has been with the company for eight years. "We feel that if a person has come from within they understand our thought processes and our way of doing business," he says. "I’m very proud of the longevity in our company."

In almost 20 years in the business, Quinn says that he has changed his way of thinking about money and success. "When I started out, my goal was to make $40,000. Once I achieved that goal, I raised the amount. But then I realized that this type of goal setting is the wrong way to go. My goal is now to pay my employees really well because if I can do that, this company is doing really well," he says.

Operational Matters

In a large chain such as Rent-A-Center, there is the risk that store-level employees feel detached from upper management. In the APRO survey, one in three delivery people and one in four sales people don’t trust the corporate office or the owners of the company. Recognizing that risk, Rent-A-Center designed its corporate structure to ensure a solid connection between the stores and corporate headquarters. Each store manager reports to a market manager, who is in charge of six to eight stores. The market managers are able to visit each of their stores on a regular basis and get to know each manager and the employees on a more personal level.

"Our market managers assist the store managers in managing the business and the employees, including helping with training, recruiting and coaching," Roustio says. "Although my door is always open and the home office is accessible by all employees, the market manager can also serve as a connection between the home office and each store." Mike Tissot, vice president of the Countryside Rentals chain of stores in Ohio and Kentucky, finds that there’s no substitute for getting out in the field himself. His company includes 12 stores; he can be found in one of them two to three days of each week. "I ride with my delivery people on the trucks and work in the stores. It’s absolutely invaluable because it’s the only way to find out what’s really going on," he says. "Access to leadership in a company is very important. And my employees know that I care and that I’m not just ruling from an ivory tower."

Recognition Scores High

A large number of rent-to-own companies offer employees periodic bonuses or incentives to recognize performance. For example, KLQ Enterprises has a number of bonus programs designed to acknowledge the accomplishments of individual stores and employees. Quarterly bonuses are paid to employees when their store meets certain operational goals. The company also names a "store of the quarter" and honors those employees and their spouses with dinner and a cash bonus. And any manager whose store records $1 million in revenue receives a one-time net bonus of $10,000.

KLQ also awards trips to its manager of the year (with spouse) and, if the company as a whole meets its budget, any manager who hits his budget also gets a trip (along with his spouse). In September, KLQ is taking 30 people to Hawaii. Although these big recognition programs are popular, KLQ’s Quinn also makes sure that recognition happens on a daily basis – and at a very personal level. "When you have more than 100 employees, you get to where you don’t know who the new hires are. So we have the names and pictures of each of our employees in a book at the home office. We study that book before walking into each store," he says.

Countryside Rentals also recognizes top performers and stores on a monthly, quarterly and/or annual basis, but the company takes employee recognition a bit further. "I send an e-mail to all of our stores every Monday recognizing the top performer the previous week. If that e-mail doesn’t go out on time, I hear about it," Countryside’s Tissot says with a laugh.

Employee Empowerment

In the APRO survey, one in eight employees are not sure or don’t think they make a difference in their company’s success. Only 25 percent of delivery and sales people feel that they make a difference for the company.

One of the pieces missing in many instances, says Carrico, is that employees don’t have a full understanding of how the company or the industry works. As a member of APRO’s Education Committee, he is helping to develop a variety of e-learning programs to help in this area, including courses on the rent-to-own industry, delivery and safety, account management, customer communication and salesmanship.

"It’s important to educate employees about the rent-to-own industry, but then each company has to make the link to what that means on a daily basis," he says. "E-learning is a tool, but cannot in itself fix these problems."

Showplace’s Ferriman noticed long ago that employees who feel connected to the success of the store benefit the business significantly. "We had some employees who were really good at displaying an ownership attitude and saw that the customers took to them very well. So we started wondering how to get employees to take ownership and feel like they had a greater stake in the business."

First, Ferriman and his business partner (who has since left the company) started sharing information with employees – including annual planning documents, monthly P and L statements and corporate P and L statements. Next, they introduced an employee incentive/bonus program for nearly every department in the company so employees could share in the profits on a monthly or quarterly basis. Ten years ago, Showplace introduced a profit-sharing retirement program so employees had a stake in the long-term profits of the company. And six years ago, Showplace became an employee-owned company.

"My partner sold his shares and I sold one percent, so the company is now 51 percent employee-owned. I am peer-reviewed by my staff on my performance as president and everyone has a quarterly performance review so that we all understand what’s expected of us and how we’re doing," he says.

Ferriman thinks the move to employee-ownership has had very positive effects on the company. "Turnover is almost non-existent at the manager level and has decreased significantly company-wide since making this change. Another benefit is that employeeowners tend to speak up when they see opportunities for improvement because they feel connected to the business," he says.

Sharing information on the business with employees is also the policy at Countryside Rentals. "We practice total open-book management with all of our employees so they can see how the company is performing. Every employee gets a share of the profits twice a year and that goes a long way toward making store-level employees conscious of how their store performs," Tissot says.

Opportunities Ahead

The bottom line to any human resources program is consistency, Carrico says. "When reality doesn’t jibe with what was presented in the interview, employees get frustrated pretty quickly. A company has to be consistent in thought, word and deed."

His best advice? Review your overall human resources program to make sure there aren’t contradictions or policies that undermine your business goals.

And finally, Carrico encourages business owners to get out there in the field and see what is working. A policy in practice may not always have the effect that was intended, he says. Margaret Harrist is a free-lance writer.

 

And Now A Word From Your Employees
By Ed Winn III

There is good news and bad news from the latest APROsponsored survey of employee attitudes and opinions about their jobs, their employers and their industry. The Association hired America’s Research Group to conduct a random-dial telephone survey of current rental-purchase employees. The survey asked 40 questions of 525 rentalpurchase employees and got answers with a 4 percent margin of error. The survey tabulated the raw results and then cross-tabulated the findings by company size, region of the country, size of market, job title, age, sex, educational level and gender.

The survey requested the employees who were interviewed to put themselves in one of the following categories: sales (32 percent), store manager (30 percent), account manager (14 percent), assistant manager (10 percent), delivery (7 percent), secretary (2 percent) and other (6 percent). First the good news. Ninety-five percent of rental-purchase employees feel appreciated at work. That is a high percentage and a good one. If that percentage ever falls to 80 percent in a company, the business will self destruct.

Who’s Telling Your Story To The Public?

Among the few who feel unappreciated, most are in delivery and sales positions. Over half of those dissatisfied cited pay as the cause of their dissatisfaction. When cross-referenced by store size, the larger the company, the less appreciated the employee feels. The survey drew the general conclusion that the industry is not paying enough attention to delivery people who are the most dissatisfied employees and also are likely to have the most unsupervised contact with customers when delivering and picking up merchandise.

It is not unusual for customers to ask delivery people about the truth and honesty of the transaction. "Is this really a good sofa?" "How does this company treat its other customers?" "Are they as hard on other customers as they are being with me?" The survey indicates that a certain percentage of delivery people, the dissatisfied ones, might not be answering these customer questions with the company’s best interests in mind.

More than 90 percent of store employees indicated a good working relationship with the home office overall. However, one-third of delivery personnel and one-fourth of the sales personnel said that they did not have a good relationship with the home office.

Over 95 percent of store employees feel that rental-purchase stores offer a valid service to customers and 90 percent feel that their store offers quality products to customers. Also, more than 90 percent feel that the store offers competitive pricing compared to the services offered. These findings dispel the idea that store employees secretly harbor feelings that the business is ripping off its customers. Almost half of rental store employees have been rental store customers in the past.

The High Cost of High Relationship Businesses

Now for the other news. It is an old saw by now that rental-purchase is a relationship business, not a product-driven business, which distinguishes it from traditional retail selling. The best location, the best products and the lowest rental rates in town will not grow BOR without the right kind of people in the store. Except perhaps for some senior citizens and their pharmacists, no other American customers have more regular contact with employees than do rental customers with rental store employees. At the same time, no other industry except for fast food has a higher turnover rate than rental purchase.

The relationship established with customers is entirely dependent upon the employees. Of course, high turnover has a corrosive effect on establishing these good relationships with customers.

The customer relationship begins immediately. Somebody in the store first meets the customer and quickly gets to know the customer’s personal references – friends, neighbors, relatives – learning about the customer’s life in far more detail than in another store setting. Somebody in the store will see where the customer lives when the unit is delivered. If it is a successful delivery, the customer and the employee will spend time together learning the features of the product and exactly how it works. Then, for many customers, somebody in the store will see them at least 4.3 times a month and will often talk to them more often than that, discussing the account, taking a commitment, cajoling, wheedling, leaving door hangers, leaving phone messages and making a trips to the house for a payment.

All this contact is creating a relationship, a good one or a bad one, with the customer. It is not being written down anywhere, this history, nothing more than the wisp of a note from time to time in the customer’s file. Instead, this complex evolving relationship with the customer is being carried around in the heads of one or more employees in the store. That history, which is the basis for the relationship that the customer has with the store, is also the key to dealing with the customer and with keeping that customer a happy, paying one. That history, as it develops, informs the store employee how to treat the customer. When the employee leaves, the history is lost, the relationship is ended and a new one must be created.

A new employee will not know that mama, who has been loaning the customer some money to get caught up on a few payments from last summer because the boyfriend got drunk and stole all the customer’s money, had to raise bail money for another child two weeks ago. The new employee also will not know that the customer got a new job last week and is going to be getting paid on Saturdays instead of Wednesdays now, so that the paychecks and payments are now going to run a week behind. He also does not know that the customer’s dog died over the weekend, causing great sadness throughout the neighborhood. This customer, a gregarious sort, was also responsible for bringing in four new customers on her street during the past three months, which are all still good, paying accounts. Finally, the new employee does not realize that now is not the best time to be pressing too hard if the store wants a customer and not a pick-up.

The employee who left with the story in his head knows that the store early on took a chance and gave this customer a break. The payment card is spotty, but this customer is loyal beyond all measure because somebody at the rental store took the time to listen to her story and cut her a little slack when the going was especially rough.

The new employee will only see an account in arrears and a chance to clean up a little credit and impress the boss. Just that quick, the history, the relationship and the account are all lost forever and probably the other accounts in the neighborhood as well before too long, because that is how the business works.

Turnover Costs RTO More

Turnover costs the industry an incalculable amount. In retail, according to Beemer, one replaced salesperson on the floor costs an average of $18,000 in lost sales, not counting the additional expense of training the new person. Nordstrom’s, a major retail chain with a reputation for personal service, calculates the loss from turnover at $36,000 per employee.

Can it be much less in a rental store? Might it not be even higher?

Turnover also affects morale among the employees who stay. One-half of rental store employees surveyed recognized that turnover is high in the store. What turnover means for the employees who are left is more work. There is always a gap between losing an employee and finding a replacement and then the new person must be trained. During this time, the other employees must pick up the slack and do the job for the missing employee and then the new one, until he or she gets up to speed. All of this is often done without extra compensation or recognition.

The survey showed that two-thirds of rental store employees have been with their current rental company less than two years. Fewer than 18 percent have been with the company for five years or more. The main reasons cited for leaving rental companies were the lack of opportunity for advancement and pay and benefits. A full 25 percent of current rental store employees have some level of job dissatisfaction. Ideally, this percentage should be 10 percent or less.

Are You Paying Enough?

Among store employees, store managers were the happiest; delivery and sales people the least satisfied. Among dissatisfied employees, one-half cited pay as the reason for their dissatisfaction. Rental-purchase employees feel they should be paid more than their retail counterparts. This is because they have more contact with customers and inevitably that means more confrontations with customers. Compared to retail, rental-purchase store locations are often sub-par, giving rise to personal safety and security issues. Rental-purchase stores are also often understaffed due to the high turnover, which means more work for the employees who are on the job.

When asked whether they thought their opinions could make a difference in the company, only 45 percent answered positively. Ideally, that percentage should be two-thirds or higher. The Beemer employee survey drew the general conclusion that the industry as a whole is not paying enough attention to delivery people who are the most dissatisfied employees in the industry and who are likely to have the most unsupervised contac t with customers.

Training Issues

Training is an issue in rental companies. Only one-third of employees reported definable training. One half of employees cited "on-the-job" training, which most often means following another employee around for a few days watching what is done. Management experts decry on-the-job training as not really being training at all. Real, definable training involves classroom instruction, assignments, role-playing, evaluation, testing and feedback.

Employees in the survey generally did not talk about their company’s manuals and policies when discussing training. This absence raises the question whether rental employees know the rules and procedures of the organization. The survey shows that the industry is doing some things well insofar as its employees are concerned and there is room for considerable improvement in other areas. The survey includes an executive summary, key marketing recommendations, data analysis, observations and a marketing plan. Copies of the complete survey are available to APRO member companies through the home office.

Ed Winn III is APRO’s legal counsel. His e-mail address is edwinn@e-bylaw.com.