Here are some of the words and phrases being used about the leasing industry today:
· Jeopardy
· Bloodbath
· Cherry picking
· Fund your own deals
· Razor-thin margins
· Desperate for revenue
· Higher losses
It is an easy time right now in our business? No. Are some leasing companies thriving? YES! How can you keep a positive outlook in the face of all this negativity? Take a look at the following:
1. The Equipment Leasing Association, www.elaonline.org, forecasts that 2001 business investments in equipment will be 882 billion dollars. Up from 820 billion in 2000 and 738 billion in 1999. Equipment leasing volume is also predicted to be 280 billion dollars up from 260 in 2000 and 234 billion in 1999.
2. There were a lot of irrational players (funding sources) that are either gone or are having significant problems. They were trying to buy market share with low rates. I’m glad they’re gone. They had bad business strategies. The good guys who know what they're doing are still doing well.
3. Dun & Bradstreet stated that in the years 1997 through 1999 a record number of new businesses were started. Those businesses are now becoming two to four years old which are the standard credit requirements most funders require.
4. Rates are low and may come down further.
5. Most experts are projecting that we are not headed towards a recession, but rather continued growth at a slower pace. According to The National Federation of Independent Business web site, www.nfib.com, there will still be economic growth in the coming year, just slower in 2001 than it was last year. They are predicting that gross domestic product will rise 1 to 4 percent this year.
Stop whining! It doesn’t help anyone. Also, when you whine in an on-line format, remember that investors in our business also read those industry postings. So, when you talk about a “bloodbath,” you may just be creating a self-fulfilling prophecy.
Why are we whining so much? Maybe it’s because worrying is less work than taking action to fix the worry. This is especially true if we’re careful to pick the biggest possible problems to worry about. Everybody wants looser credit standards--nobody wants to make 50 prospect calls. Now is the time to show that you’re a sales professional and not just an order taker.
Remember… happiness does not come from doing easy work, but from the afterglow of satisfaction that comes from the achievement of a difficult task which demands your best.
I’ve been thinking about writing this article since August of last year when a Broker who read the third quarter issue of Practical Leasing said, “I think your newsletter is a little naive given the state of our industry.” This hurt my feelings because I think of this newsletter as practical tips for sales and marketing. However, I decided to read as much as I could about small ticket leasing trends, and one of the best articles I read was written by Adrian Bulman, in www.leasingnews.org. I’m sorry to hear about Adrian’s untimely death.
Summing it up, there are more small businesses out there getting more equipment and looking for leases. It may not be growing as fast as it has over the past five years, but with more irrational players leaving the market and rates as low as they are, you too can thrive in these times.