EP 116

The Equipment Equation: Weighing the Costs of Hiring vs. Buying Plant for your business (EP 116)



In the studio today, we have Daniel Parker, the UK Country Manager for easyToolhire, a platform that simplifies the rental of tools, equipment and machinery. Daniel is a serial entrepreneur interested in blockchain and property and generally doing some good and is currently growing the easyToolhire here in the UK.

In this fascinating episode, Daniel explains easyToolhire’s unique business model and talks about his experience of trying to innovate and breakthrough in the construction industry. We debate whether contractors should buy or hire plant, particularly in the context of today’s economy.

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Paul Heming: Hello and welcome to episode 116 of the Own the Build podcast with me, Paul Heming. Following on from last week’s e-book share, or the ongoing e-book and template share, you can again find in the podcast description this week a free copy of two downloads just for you. We have got the template, final account statement, and a risk register as well. Thanks for everyone who’s continuing to feedback and if you guys want any other templates, just let me know. We have a whole array, which we’re very happy to share. Give me a shout on: Paul@c-link.com. And yeah, in the studio today, we have got Daniel Parker, who is the UK Country Manager for easyToolhire. EasyToolhire is a platform that simplifies the rental of tools, equipment, and machinery. And you will recognize the logo as I believe it is part of the Easy Group, Easy Jet, you’ll know. So, it’s the lovely orange logo. Daniel himself is obviously the UK country manager for easyToolhire. He’s a serial entrepreneur himself. He’s interested in blockchain, property and in his own words, generally doing some good. So, I like the sound of this. He’s currently growing easyToolhire in the UK. He’s smiling from ear to ear right now and I’m delighted to have him on the show. Daniel, how are you?

Daniel Parker: Thank you very much, Paul. I’m very well. That was a very lovely intro as well. I think that makes me seem a lot better than what I actually am.

Paul Heming: General– You know, I mean there’s a lot of interest. I’m interested in blockchain, interested in property, we’ve got our own businesses, blah, blah, blah. I’m making business– you are a serial entrepreneur yourself. The bit that actually stood out the most to me from, I’ve kind of nabbed all of that from your LinkedIn, was the ‘generally doing some good’ part that I thought that’s like, what did you mean by that?

Daniel Parker: Just trying to do things– like do things that benefit others where possible, like with this. You know, with to Tool and plant hire, I see it’s been a bit greener and things like that, so it helps the environment. Just something that’s positive and at the end of the day I can say, well, that helped in some way, shape or form, you know, however vaguely. But yeah, I get to go to home, sleeping at night and going, well, I didn’t do anything bad today.

Paul Heming: Fantastic. No, no, that’s– I mean, our mission statement as a business for C-Link and prosper. So, we kind of help property developers, main contractors and subcontractors. We cover the whole ecosystem and our mission statement is to make construction a better fairer, more profitable place for everyone. Just generally try and do some good for absolutely everyone. It’s tough enough as it is. So, that really resonated with me. Before we jump in, keen listeners of the show will know that I love an accent. Come on. That is a quite delightful accent that you’ve got. I’m jealous. Where is it from in Scotland?

Daniel Parker: So, I’m from Edinburgh in Scotland, so we don’t have– it’s not too much of a strong Scottish accent.

Paul Heming: Is that Queen’s Scottish?

Daniel Parker: Exactly. Like we can actually understand someone from Edinburgh, potentially. There’s other part– even Scotland–

Paul Heming: Glasgow can be tough, can’t it?

Daniel Parker: Glasgow can be tough. I mean there’s certain parts of Scotland I still don’t understand people’s accent, and I’m Scottish, so there you go.

Paul Heming: Well, I think you are the first Scottish accent or Scottish person that I’ve really been able to understand. So let’s see if we can sit with it, right? See if that continues as we go. I’m only joking of course, but talk to me about, you’ve had a very interesting career and I know that your background is not construction. Just talk to us about who you are, your career and why you’re doing what you’re doing now.

Daniel Parker: So, I’ve always worked in some way, shape or form in tech since I left university, and to the present day. So, easyToolhire, we see ourself as a tech business within the construction sector. So, first real job out of uni I worked for, it was a customer service software business, kind of like Zendesk, probably the one that people might have heard of listening. And then left there, set up my own thing, which was a short term hire, let business– so basically putting properties on Airbnb, booking.com, things like that. Again, heavily related to tech. We did build our own tech, but–

Paul Heming: Are you a software developer? You can code or–

Daniel Parker: I wish. I wish. Not that intelligent, unfortunately. I understand. I understand it at a very high level and can do no code stuff, but no, I’m more of the commercial end, the business end and–

Paul Heming: Business development.

Daniel Parker: Making up stuff. Yeah, that sort of thing. I want to–

Paul Heming: Charming people.

Daniel Parker: Yeah, I wish. I wish I could write code and things like that, but I don’t know why just at school, it just never– it never resonated with me. Just couldn’t do it. People that can do that sort of stuff amazed me. They’re super intelligent and good on you. But yeah, built that up, sold it during the pandemic and then told myself, I don’t fancy working for anybody again. But then saw this opportunity with easyToolhire, saw it’s a startup, but with a recognized brand also in a sector that’s got a lot of opportunity as well, construction to plant hire. It’s not been fully commercialized to my beliefs. And yeah, just thought go jump on this, going to do it.

Paul Heming: And so, you come into the construction industry after effectively kind of being in, I guess, across a few industries, but in the tech industry let’s say, I know that’s a pretty broad term. But what was your perception of construction before you joined the construction industry and what is your perception of construction now that you’ve been with us in this lovely place for a year?

Daniel Parker: Yeah, well, I guess before being with property, I would see construction more as like your DIY and maintenance and things like that. You know, properties, things like that. So, you know, plumbers, electricians, handy people is a lot of what I would get into flats to fix people. Someone who you generally do lots of–

Paul Heming: So, you are so Airbnb style.

Daniel Parker: Yeah, yeah, yeah, doing small fixes and things like that. But now, construction, you know, from working into Plant and hire, I see it’s much bigger than that. You know, construction’s anything from a little driveway or an extension, somebody’s house through to massive nuclear power plants like Hinckley Point and, you know, HS two and things like that. You know, there’s just acute construction is, you know, one of the biggest sectors of the UK economy and has a wide ranging thing from the handyman fixing a hole in the wall from a tenant through to, you know, a big massive digger, some 20 ton beast to digging a hole at Hinckley point. So, it’s a, you know, a massive wide ranging industry.

Paul Heming: What did you perceive about us before you came in? Did you think–

Daniel Parker: Construction as a whole? Dirty

Paul Heming: Honesty.

Daniel Parker: Yeah, like a, a dirty, manly sector, you know, it’s like–

Paul Heming: Really like– the trope almost, yeah.

Daniel Parker: Yeah, yeah, yeah. You know, kind of gruff, but when you look at it now, construction as a whole, it’s becoming more data driven, more tech driven. There’s a lot more women getting involved in construction. You’ve got some of the biggest to plant and hire businesses in the UK have got started and still have female CEOs, things like that. So, there is still a high percentage of men that work within construction, but it’s becoming a bit better and, you know–

Paul Heming: It’s exciting space as well, right?

Daniel Parker: Yeah, exactly. And you’re getting more women encouraged to get involved. Yeah, there’s more tech getting into construction as a whole. You know, you’re getting everything more data driven. You’re getting GPS getting used and everything so they can track where things are. They’re looking at utilization. I mean even this morning I was looking at a product of generators that can be tracked wherever they are. They can remotely be accessed from wherever in the world be a 3G connection. So, it is becoming much more technical as opposed to, you know, a dirty diesel little generator, you have to chuck some diesel in, then hope it starts. They can remotely tap into the thing and go–

Paul Heming: There’s so much opportunity, isn’t there?

Daniel Parker: Yeah, yeah, exactly.

Paul Heming: That’s the exciting thing, isn’t it? But like with construction it’s got so much opportunity for benefits and improvements, productivity, et cetera. Talk to us, because I know you now, Daniel and I know easyToolhire, say, I know easyToolhire. Obviously, I don’t. But in detail, but my perception, I guess, of what easyToolhire was before I spoke to you, it changed quite dramatically. And so, I’m interested in you just explaining like in headline about easyToolhire for those who don’t know easyToolhire, who are listening and what makes you unique in the market.

Daniel Parker: So, we operate, it’s on a franchise basis. Like to start with franchise and sometimes gets a dirty name for itself, but we work in a quite unique way. So, we take a country like the UK because we work across Europe, split it up into regions and then each region, we work with one local tool plant hire business, send all the business to them, and by the business, what I mean is e-commerce. So, we basically make it very easy to transact online and we tend to target your DIYer, your give it a goer and your small trades businesses, you know, your sole traders, your man with Van, that type of business as well, who are looking to get things easily, quickly, and transparently as well. Because everything we have has a price attached it. There’s no back and forth, you know, give me a quote on this, blah-blah-blah. The price is the price that’s–

Paul Heming: So, I want to get a scissor lift for this job that I’m starting next week. How do I use easyToolhire?

Daniel Parker: Go on the website, search scissor lift and then it’ll come up and then you put the dates on that you need it for, pay for it, that’s it. It’ll turn up on site when you want it and then they’ll come and take–

Paul Heming: It’s as simple as that.

Daniel Parker: And then they’ll come and take it away. Yeah. And we do ID verification, things like that. Things you would expect with hire, but it’s all done online. It’s very simple. It’s, to use a Scottish word, Egypt proof. You just hold your phone above your id.

Paul Heming: I thought that was an Irish word.

Daniel Parker: No, it’s a Scottish word. Egypt. That’s definitely a sco–

Paul Heming: Is it now? Let’s say it’s a Celtic word, which kind of covers us both.

Daniel Parker: There we go. Aye, there’s another Celtic word. But yeah, it’s just– it’s makes it as easy as possible as well. So, you know, even if they’re going to go and collect it from a depot, if they’ve not got their ID on them, doesn’t matter. They did it online, we’ve checked it all, we’re quite happy with them. But yeah, it really is a super straightforward process. There’s no back and forth, all that sort of stuff. It’s paid for. Done.

Paul Heming: And the idea is you don’t need to go to a depot, you don’t need to do any of that. Type it in on the app or on the website, wherever it is, and bang, it turns up.

Daniel Parker: There’s no administration, no checking account, back and forth, invoices, negotiation on the price, all the rest of it. Like the price there is the best price that can be offered that the partner can, you know, do.

Paul Heming: Okay. And so, it’s best price. You know, some– I’m a quantity surveyor so it’s all about money, money, money with us in some respects. Right? If I was using, and I understand, so it’s, you know, it’s, at the moment at least, it’s the SMEs, really the SMEs that you’re focusing on is that DIY and kind of small contractor network. Is there intention, is there focus to move up the food chain and inverted commerce to go towards the larger contractors?

Daniel Parker: No, not at all. I mean, we think that that part of the market’s very well-served through other businesses. We want to focus more on your consumer and the micro businesses because we don’t think that anybody’s particularly focusing on them at all. You’ve got a lot of businesses that try to do both. I think it’s quite hard to do both well. We would rather focus on the more consumer end and do that very well.

Paul Heming: And the smaller contractors as well.

Daniel Parker: Yeah.

Paul Heming: And so, when you talk about– first things first, have you spoken to Stelios? That’s all I know about. That’s all I know about you.

Daniel Parker: Yes.

Paul Heming: I just remember that that–

Daniel Parker: Not in person but in like a one-to-one conference, yes, I have. Surprisingly down to earth chap. Very friendly, very easy to get on. You know, for someone so wealthy, actually knows, you know, the price of a pint of milk, that sort of thing. Just down to earth, which just really surprised me. There was no bullshit, you know, no bs.

Paul Heming: That’s what you want, isn’t it?

Daniel Parker: Yeah. And he’s kindly invited us out actually to the end of April to come and meet, for all of us to come and meet him as well and the franchisees.

Paul Heming: Fantastic.

Daniel Parker: Host us for a couple days in Monaco, which will be lovely, I’m sure.

Paul Heming: That will be very nice in Monaco won’t it? Time it with the Grand Prix. So, going back to easyToolhire, what like makes it unique? One of the things that stands out to me is the franchising model. Just explain that.

Daniel Parker: So, we operate kind of as a typical franchise would. So, we have centralized marketing services, so we are doing all the marketing part for them and they own the brand in their territory as a typical franchise would. And we also do things like, you know, buying groups, lumping together all– because all of our franchises are partners, are independent businesses that work, operate independently of each other, but it’s to build up buying power for them as well from your manufacturers of, you know, everything from diggers through to the saw blades, all that sort of stuff as well. And we see it as the way that we are operating, and of course we’re going to believe this, I’m bias, I work for the company, is we’re bringing together the brand, the power of the brand, the technology, but then marrying it with local service of a family business, a limited company in that area who knows the area, knows the kit. So, bringing them together works pretty well and they’re getting really good service because it’s from a small company where, you know, the family’s still involved and they care about the business, they care about the customers as well.

Paul Heming: No, that makes perfect sense. And construction is a unique place in that it offers a huge amount of opportunity, given that yes, there’s a huge amount of innovation going on and we’ve made some big steps, but comparatively with other sectors, there is a long way for us to go to catch up, for one of a better phrase. And I sell construction technology and software to quantity surveyors, main contractors who are a skeptical bunch. And I know that because I myself am a quantity surveyor so I know it’s kind of path of the course. So, I know everyone is skeptical and change is difficult, but with construction, I think, even more so than many others. How have you guys gone about changing people’s mentalities because what you are offering is totally disruptive really to the plant art sector.

Daniel Parker: I’d agree with all the points that you’ve said there that, you know, especially to begin with, we did get a lot of pushback. Construction as a whole is more of an old school industry, not that digitized. So yeah, there is a lot of pushback. We’re looking for, to start with, you know, it’s those people that are a bit forward thinking, you’re looking to try something a bit different and understand that the world is changing because tool plant hire, subsect of construction, construction is a huge big thing. It’s not been commercialized, I would say, towards the consumer as of yet. Whereas, you know, most other sectors have, especially in retail from clothing, whereas this hasn’t yet. So, tool plant hire’s mostly made up of independent businesses, about 75%. So, it’s mostly entrepreneurs. But then you’ve got some of them who are a bit forward thinking and looking to get something early because that’s what is, they’re getting something a bit early. So, it’s finding the right people. And I think it’s when people see the opportunity as well, showing them, you know, how many people are actually looking to do this. And I think when consumers and DIYers are made aware that they actually can hire things as opposed to owning it as well, that opens up doors, because I think a lot of people, especially if they’re not keen DIY enthusiasts don’t realize that they could just hire something for the weekend. They think they have to go and buy the thing. You don’t need to, you know–

Paul Heming: Yeah, yeah, a hundred percent.

Daniel Parker: So, it’s also, you know, we are having to do that awareness to the general public as well. When they realize that, they go, oh, well, makes sense, I don’t have to maintain the thing, I don’t have to store it, pay for it for the weekend, get it back, happy days.

Paul Heming: And that’s the kind of like the perfect segue of where I want to take this conversation now is the hire of plant versus the purchase of plant. And I recognize that you are going to be quite biased when it comes to giving me an opinion on that. But we’ve talked about this before and I want to talk that through with you, particularly in the context of the economy, where we’re at and many other things. But we will do that right after this break. 

So, Daniel, you perfectly segued me there onto the topic of conversation, but I rudely suggested that we go for a break and have a drink of water. So, what I would like to talk with you now, talk with you about now is really the principles of hiring plant and buying plant. Now I come from a background where I remember, and again, this is a bit more commercial construction. So, I come from a background where I remember being told once by a contractor, oh, my USP or where I really make a lot of profit is I bought all of my lifting equipment, my cranage or whatever. And what that means is that now I can charge less than all the competition cause I’m not hiring it, but still make great profit on it. It was like something that these, that company and they were like an installer of curtain walling. So like, glazing and stuff like that. It was something that they really were almost striving for as a business, like at the outset, that’s where we wanted to get ourselves to. How does that make you feel?

Daniel Parker: I mean, obviously as you said, I’m going to be biased and argue that hiring is better, but when you look at the financials of it, it tends to be as well. So, I’ll talk– first, I’ll talk about hire businesses themselves. So, a lot of the hire businesses, they work, we work with, they don’t make a lot of their profit from the actual hire of it either or even the residual value of when they come to sell it. They might make a little bit there, but a lot of it’s from other services like the consumables that come along with items that they hire.

Paul Heming: Really?

Daniel Parker: That’s– Yeah, yeah, you’d be surprised. That’s where they make a lot of their profit. So, you know, the hires themselves keep the business ticking over, revenues coming in, pays for, you know, the machinery leases, buying new machines, paying the staff, all that sort of stuff, because like all businesses come with a lot of overheads. They’ve got engineers, they’ve got, you know, big depots to pay for, all these sorts of things, buying new machinery because they have to buy new machinery, on average, every three years. So, it’s not there for a long time. So, if you then relate that back to you, you know, you’re mentioning a builder or something that, so they’re buying it as well, they’re not actually going to make a huge amount of profit out of owning it because you’ve got maintenance on top of it. And if you think about it in the long run, like say, you mentioned a crane or something along those lines, a big bit of kit, yes, in theory, on the balance sheet, make more money because they own it for a long time. Don’t buy a new one, they’ve paid off all that sort of stuff. But in reality, right, they’ve owned that crane for five, 10 years, that’s now an obsolete piece of technology. You’ve got one that’s come out that’s much more efficient. Your competition that’s down the road from you who’s hiring a crane that’s much newer is doing the job a lot quicker. So, actually, in the long run, it’s costing you more, because it’s taking you longer to do that job. So, you can argue on that basis, I would say.

Paul Heming: That makes sense. Can I ask? I think there’s quite a few things to touch on there, and I guess one of the first things, and I was going to ask you, could you dispel one myth about the plant hire sector? One of the things that, and maybe this is a myth that I have in my head, you might have another one, was that the margins were great and you kind of just suggested that you would– you don’t make that much money on the hire, you make that money on the consumables, which are funds. There’s one myth I’ve– you’ve slapped me around the face with that.

Daniel Parker: Yes, at the front end, it might seem, you know, before you take off all of the costs involved. So, if you just look at the cost of the machine and what they’re making in terms of the hire, when you’re take into account the fact that the machinery is replaced so often and like, you know, same as a car, same as buying a bit of plant, tools and things that. As soon as you bought it, it’s immediately lost a lot of its value. They’re– so, when they’re trying to sell it on, they’ve got to pay for engineers to keep it and service it. Tends to be that, you know, hire businesses have very strict safety regulations, testing that they have to stick to, which then costs more money, and they’ve got all the overheads as well of, you know, of–

Paul Heming: Oh you’re making me feel sorry now for the–

Daniel Parker: No, but obviously–

Paul Heming: [cross talk]

Daniel Parker: They are making a, you know, a slight profit off the hires. But I don’t think as much as what people think.

Paul Heming: I think that’s the perception. Oh, that was certainly my perception was, you know, ah, they must be making fortune.

Daniel Parker: Again, it’s everything. It’s economies of skill. Yes. If you’re hiring out thousands, tens of thousands of pieces of machine, yes, it is profitable. That’s only because you’re making, you know, pennies on the pound on every hire, because they’re doing it to scale. But if you’ve got a little, a very small hire shop that’s just doing this, you know, handful of tools, we’ve got a couple of mini diggers, they’ve obviously not got that kind of economy of scale. That’s, I mean definitely that’s where they’re making more of the margin on the consumable aspects

Paul Heming: And so, if you then approach them with a franchisee option for easyToolhire and say, we’ll deal with your marketing, we’ll deal with X, Y and Z, it becomes a very attractive proposition to them, right?

Daniel Parker: Yeah, exactly. I mean, yeah, and like I said, the economy’s a skill, there’s benefits because you tip, you know. If it’s a McDonald’s, for example, you know they’re getting the burgers for pennies. Pennies. I’m sure. And the same we can get good discounts because we are not just buying as, you know, local tool hire shopper, a high street family owned Smith– you know, we hire shop, whatever you want to call it, we are buying for all of these depots in the UK and across Europe as well.

Paul Heming: Yeah, no, that makes perfect sense. One thing that going back to your previous point about why you should hire rather than purchase, interesting point that you made about, you know, five or 10 years on that bit of kit is not obsolete but it’s 20% less efficient than the latest bit of kit or whatever, right? You guys must be really close to this. So, what is the approximate almost life cycle of a piece of– like, taking that scissor lift for example, right? That I mentioned earlier. How often is a new scissor lift coming out? How often is it iteration? 2, 3, 4. So that like, is it every– well how often is it?

Daniel Parker: I mean, every year they’ve got a new model. I mean, the same as most manufacturing when it comes to carving things like, and obviously they want to put it more so, they are constantly innovating. You know, there’s lots of different shows around the world. You go to Bowman, things like that. There’s constant innovation, especially at the moment where you’ve got cross tool plant, the batteries are getting much better, so you’re now getting better electrically powered, you know, diggers and things like that. You can now even– you know, you don’t need to have a dirty diesel generator. You’ve now got battery banks as good as a diesel generator and things like that. So, the innovation is massive. Like every year, it’s getting better and better.

Paul Heming: Yeah, I think it makes a lot of sense in terms of, it sounds great doesn’t it, to buy a plant, and that each bit of kit is unique obviously and subjective, but there are many things that would promote that it is better to hire. Just contextualize all of that for me, Daniel, in today’s economy, I don’t want to say the word recession because we’re not in a technical recession, so I hear, and also everyone will tell me, stop being a misery guts, but I’m just going to say, in the context of where we are at, economically, particularly here in the UK right? Does that further impact your views with regards to hiring versus buying?

Daniel Parker: Yes, a hundred percent. I mean, obviously, bias, as we mentioned, but in the last financial crisis that we had, hire businesses did phenomenally well because of the CapEx element. You know, construction businesses are not as wanting to outlay as much onto tool plant, which makes sense when you’re in a uncertain times–

Paul Heming: How well did they do whilst we were all doing badly?

Daniel Parker: How well. I don’t know, I don’t have percentage and things like that, but as– that’s all I’m told is a lot of new tool plant hire businesses started during the last recession. They did, yeah, they start– they were one of the few sectors where they, you know, there was people actually starting new businesses, because people, yeah, during– I hate that term of, you know, uncertain times, but people don’t want to do– from businesses through to, you know, individuals like yourselves, you don’t want to make large outlays of money in case you don’t know what’s happening. You want to keep money in the bank in case something very bad happens. You know, in the next, there’ll be less people. Well, there has been less expenditure, overall and there’s been one of the– with COVID we’re still seeing issues related to that. A lot of the manufacturers obviously had to slow down their production and then there was problems when supply chain with, you know, processors, microchips, all that kind of stuff. So, all of them slowed down production and people weren’t able to buy as much machinery anyway. And that’s just kind of kept going on. It still is a challenge actually going by machinery at the moment.

Paul Heming: Is it a challenge for you guys? Appreciate you have much larger supply chains and economies, but is there still a blockage in terms of–

Daniel Parker: Not really. Not if you work with the right manufacturers. Because you’ve got always got new ones trying to enter the market, so then they prioritize certain countries when it comes to their stock availability and things like that. So, that’s something that we’ve really been looking at is, you know, looking at more emerging manufacturers and things like that who are offering something a bit different and have that availability.

Paul Heming: Yeah, it definitely makes sense in terms of, you know, tightening of the belts. It does make sense. Plant hire over purchase. Just touching on maintenance, and I’m well aware that each and every bit of kit is totally unique. But you’ve talked about, oh it’s all good and well buying it, but then how are you going to maintain it? What are you going to do with this? What are you going to do with that? There’s each bit of plant requires what it requires. How much do you spend on maintenance for plant in a year? Like, I’m thinking percentage wise. You have a bit, you buy a bit of kit, how often are you maintaining it? What’s the cost of maintaining it and why? Come on, you can surely scare us off now to not go out buying plants, and you can dominate us with your bias.

Daniel Parker: Yeah, well, I mean every single time that it’s off the terms off hired, when it’s brought back in, it’s serviced, it’s checked over, so it’s a high cost. I can’t give you exact figures, but it is, you know, every single time it comes back, it’s getting checked over, it’s getting serviced, it’s getting parts changed, all that sort of stuff. And tool plant hire is very wide ranging. So, even if you take one thing like power to access, like sizzle lifts and things like that, even that one boat is seen as category or piece of machinery, you can get multiple variations of that as well. So you’ve got electric ones, you’ve got, you know, hydraulic ones, all these kind of things which require different knowledge and engineering and fitters and all that sort of stuff. So yeah, to answer your question, a lot of money, because in it to plant hire business outside, well like a lot of businesses, their biggest cost after the kit itself is their staff. And what you tend to find in most tool plant hire businesses, most of their staff are engineers fitters. So it is a big cost and because they are, you know, rigorous in checking over this machinery, every time it comes in, goes out, you know, you’ve got an engineer, you’ve got engineers that on standby to go out, if it breaks down as well on site, you know, all these things that you have to have available.

Paul Heming: Is it a really tough market? I picture it being quite a saturated market, tool and plant hire. You know, and there’s some big players in there, but there’s also, like you said, you said 75% of SMEs’ smaller businesses. So, there’s like these big players, you know, like the HSS, people that kind of stick out in your mind and then lots of independence in all of these different cities, towns, et cetera. How difficult a market is it to–?

Daniel Parker: I don’t think it’s saturated at all, to be honest. It’s something that’s growing massively. So, if you look at the figures, tool and plant hire, but just over a decade ago across the UK was worth about a billion pounds. Now, I think this is last year, it was just over six and a half billion, so it’s growing, you know, nearly 600% in a decade. And it’s only growing more and more and more. And I think it’s the same as not just construction, but all sectors. We’re all realizing, do you know what, I want to be an expert in what I do rather than trying to do everything. So, you know, more construction businesses DIYers, because all, all types of people are going, well hire it instead. What’s the point of me owning all that kind of stuff? So it’s just going to grow and grow and grow and grow. Because you even have some, you know, large construction companies, they have their own in-house tool plant hire business. They’ve created a whole separate limited for it, for tax write-offs and things like that, I’m sure. But, you know, it is something that’s just growing and growing and construction’s always going to be around. It’s one of the largest, you know, parts of the UK economy. We have shortages of houses, we have shortages of people in construction from the figures I was reading recently, apparently in the next, I think it’s five years, we need another quarter of a million trades people across, you know, all different sectors, electricians, plumbers, laborers, all those sorts of things as well. So, you know, it can only grow from all those different aspects. If we somehow, you know, tomorrow there was another quarter of a million trades people found, then they’re all going to probably have to hire some tools and some plant as well, so there’s some instant growth right there.

Paul Heming: Yeah, there’s a housing crisis. There’s a distinct lack of houses. We’re behind every single year. We need to build more houses the next decade. I completely– it resonates with what you’re saying is we’ve done similar studies into for our business planning, et cetera, et cetera. So, it makes perfect sense. Construction is here to stay and it’s continuing to grow. I think it’s expected to grow 7% in the UK construction industry over the next four or five years. So, I guess my final question for you is you are someone who is a forward thinker and innovator. You’ve done lots of things, you’ve been focused in tech, you’re now focused in tech within construction. How do you see the future of the plant hire sector for the industry in totality, not just, you know, DIY and that SME et cetera, just thinking about the wider construction space as well.

Daniel Parker: From what I’ve seen, it’s becoming and will become much more data driven. So, you know, looking at facts and figures, looking at utilization, looking at all these sorts of aspects to make things more efficient, ultimately, you know, as much as some people might not like that and it’s kind of old school, but it is becoming much more, you know, constructive. I’m trying to watch what I’m saying here. Construction is professional but it is becoming more professionalized. You know, we work with tool and plant hire businesses that, you know, a decade ago wouldn’t have looked at, you know, data, computers and that stuff. Now they have business– BI teams and things like that and you know, more–

Paul Heming: Hundred percent.

Daniel Parker: More and more construction business, the ones that are growing, especially your larger ones, your PLCs and things like that, they have whole swaths of teams dedicated to these kind of things. And that might sound like, you know, it’s boring and it’s a little of rubbish and all the rest of it, but you’ve got to look at the data, look at the numbers to then, you know, that helps you find, you know, I’m speaking quite general things here, but you know, that helps you analyze and find where the problems are, where the things are to solve, all that sort of stuff.

Paul Heming: But with plant hire specifically, data, why do I need to know about the data?

Daniel Parker: Why do you need to know about the data? Well, there’s lots of data points in hire. I’ve mentioned the term ‘utilization’ because it’s important. You know, what’s the point in having a hundred diggers out there in your yard if they’re only getting used 25% of the time. So, you want to understand that, you want to understand seasonality, when there’s peaks and troughs, to make sure that you have enough stock available so you can preplan all these sorts of things. It’s just so important, because it is a season– like a lot of businesses, it’s a seasonal business as well. You know, there’s, you know, certain months you’ll hire out more gardening equipment when supposedly it’s sunny in the UK that one day a year in August. You know, all these sorts of things as well. So, that’s why, you know, rather than just kind of going, putting your finger in there and going, hmm, right, this is how we’re going to spend our money on capital and things like that. It needs to be driven by data, insights, analysis, all these sorts of things as well.

Paul Heming: And is that a good thing or a bad thing for the hire sector? I’m thinking about projects where I’ve been on where there’s a piece of kit there and you think, ah, we’re not using that for three days, but it’d be good to return it, but it wouldn’t be– do you see what I mean? It’s almost– that sounds like where you would want to take a project, right? You’d want them to say I’ve only got these bits of kit when I need these bits of kit. Is that the reality then? Is that how you think that the plant hire sector will be a lot more– a lot leaner because we’ll be hiring what we need to hire?

Daniel Parker: Yeah, in some regards. I mean, you can’t a hundred percent have everything pre-planned, all the rest of it. Because you know, weather. Weather heavily affects construction. So, if something’s rained off, it’s rained off. That’s no fault of anybody’s at all. So, I get with being in the UK, there is always going to be a bit of– what’s the word I’m looking for? You know, not as efficient as possible, thanks to–

Paul Heming: Especially in Scotland.

Daniel Parker: Yeah, especially in Scotland. The more north you go, the worse it gets. But I think there’s always going to be it. But you– we can only try as hard as we can to be efficient. I mean, you are always going to have those times where the, you know, a piece of equipment gets suspended on site, for example, and, you know, the hire business isn’t making money out of it, the construction’s not paying for it, but then again, it would be more expensive for them to come and collect it and then bring it back and that’s worse for the environment and all these sorts of things as well. So, it’s going to– I think it’s going to keep improving to a point until we get to the point where, you know, the weather man is a hundred percent on it.

Paul Heming: Yeah, I–

Daniel Parker: Who knows?

Paul Heming: I think– yeah, I think the point is, and perhaps you’ve seen this coming into construction as an “outsider” in inverted commas, is that there is a lot of decisions made based on hearsay, experience, one person’s opinion, a group of people’s opinions, not data. And I believe data or a lack of data focus is what is holding us back or what has held us back. And now that again, it’s that big open space for us to make huge efficiency gains is having a good strong dataset and that is across the board. So, what you are kind of saying is that the future of the plant hire sector, it will be far more data driven, is that right?

Daniel Parker: Yeah, and becoming more united and sharing data and things like that. I mean, I’ve heard been– yeah, you’ve already use hearsay, heard of projects where people try to unite multiple independent tool and plant hire business to understand, you know, how much stock they had available, how much equipment they had and things like that to make things more efficient. And I’ll just kind of, no, I don’t want you to know what I’ve got, blah-blah-blah. I think that happens a lot across construction. In time, we will understand that there’s plenty out there. We don’t need to hide things from each other. Sharing best practice is great. I mean, and it does happen. You know, I don’t want to sound I can be negative. You have lots of different alliances and clubs and subsets within construction that do share best practice and all that kind of stuff. So, it does happen, but there could be a lot more of it.

Paul Heming: No, no, I completely agree, and I can see what easyToolhire is doing for the sector. I can definitely see a space for it. I can see a space for it in the bigger projects as well. But thank you so much for coming on the show, Daniel. It’s been great to chat to you.

Daniel Parker: It’s been a pleasure.

Paul Heming: It’s been really, really interesting. I will obviously share Daniel’s details, easyToolhires’ details in the podcast description. I’m sure Daniel would love to speak to you all. And yeah, it goes without saying, Daniel, thanks for coming on the show and I very much appreciate your time.

Daniel Parker: No, not a problem at all. It’s been a pleasure. Thank you very much for having me, Paul.

Paul Heming: My pleasure. And everybody, I will speak to you as always next week. Have a good week and speak to you soon.

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