Mike Miller is known in Northeast Ohio as “the guy who buys rental stores.” At a time when many have retrenched or even gone out of business, Miller, who owns Handy Rents and Aladdin Rents for Special Events in Eastlake, Ohio, continues to build an impressive equipment rental empire.
In 2010, he purchased three more businesses and closed one location in Kent after two years of trying to make it work. He is now in the process of opening a new store in another city and could decide at any time to add another business if the right opportunity presents itself.
“My goal has always been to keep expanding, to not ever stop. A business is a journey. It’s not a destination. You’re never through with it,” Miller says with a grin.
The company currently has eight locations, including Handy Rents in Chagrin Falls, Cleveland Heights, Eastlake, Elyria, Euclid and Painesville; Aladdin Rents for Special Events in Eastlake; and Parties-to-Go in Lorain. The company plans to open another store in Mayfield Heights soon.
Miller’s simple secrets are working hard and doing his “homework” to purchase and set up rental stores where he sees potential growth.
This isn’t a particularly easy task in Northeast Ohio, where an economic downturn started as long as a decade ago. The last three years in particular have not been easy, but Miller keeps seeing opportunity where others are ready to quit.
“Rental is a great industry to be in. There are a lot of hardworking individuals and a lot of smart people out there. I don’t claim to be any smarter than any of them. I’m just a hard worker. There are lots more opportunities out there. You have to turn the pages a lot more today. People have approached me numerous times the past five or six years about buying their business and it doesn’t work out for lots of different reasons. Either I can’t make it work because the rent is too high or I can see the person doesn’t really want to sell. When it works, it works. I’m glad I get the opportunity to go in front of people and talk about it,” he says.
Miller figures he knows about 95 percent of the people in the rental business in his area, partially because of his penchant for networking and having served for many years as an officer, including president, of the Northeast Ohio Rental Association.
“I’ve loved talking to the old timers because I could learn so much. I was soaking up all this information like a sponge. Then guys would approach me and say, ‘Hey, Miller. You bought the last guy’s store. How about buying my store?’” he says.
Miller is modest about his accomplishments, but his story is one of a shrewd self-taught businessman who persevered to put himself through night school while working at the original Handy Rents. He initially attended Lakeland Community College where he met his wife, Terrie. “The best thing that happened out of the whole thing is that I met my wife at an ‘Introduction to Business’ class at college,” he says.
The couple bought an old home in Willoughby, which they remodeled over eight years before selling it and buying a new home in Mentor, Ohio. They have three children — Christopher, Patrick and Amanda — all of whom work for the company.
Christopher, their oldest son, was born in 1981 with Down Syndrome, which has led to the company’s participation in job training programs for those with special needs (Rental Management, January 2011, page 12.)
It took 10 years, but Miller eventually earned his degree in marketing management and industrial management from Lake Erie College in Painesville, Ohio. The lesson he says he has learned throughout his life is to not be afraid to take a risk. “I started with nothing — a wife, child, small home and no money. Now we have eight stores and 45 employees. You have to constantly look for every angle and everything you can do,” he says.
In 1983, 20 years after the company was founded, Handy Rents lost its lease and the two owners decided it was time to close the business. Miller was laid off, but there was an opportunity to buy the rental store for $80,000.
His dentist recognized his hard work and had previously offered to back Miller in any venture he might choose. However, his wife convinced him to forego the partnership with the dentist. Instead, they borrowed some money from each of their parents — with a promise to make monthly payments plus interest.
“We had $20,000, so we could pay the first owner half of
what he wanted. We said we would pay him another $10,000 in
30 days and the final $10,000 in 60 days. The other owner financed $40,000 over four years for his half. It worked out,” Miller says.
“I found a location and got the owner of the building to work with me so that we didn’t pay much rent for a month or two and then accelerated our payments. People worked with me and I was able to get that first store,” he says.
Then came a surprise bonus. His accountant explained that a capital purchase tax credit of 10 percent had been passed by Congress and he received $8,000 back from the $80,000 purchase. “That was like a windfall. We were able to go to The Rental Show and buy all sorts of equipment, pump some money into the business and go in the direction I thought we should be going in,” he says.
Next, he bought out a competitor in Euclid so that the company had two locations. They eventually added more party and event inventory and then Miller started Aladdin Rents for Special Events in 1988. A string of other deals followed with Handy Rents buying, selling, opening and closing several locations over the last 20 years.
Miller says 1993 was a big year and that he was approached to buy an A to Z Rental in Mayfield Heights, one of the more upscale suburbs of Cleveland.
“The owner was tired of putting up tents by himself and he wanted to move to Albuquerque. It was a big store, about 12,500 sq. ft. Most of my buildings were 3,000 to 4,000 sq. ft. I met the landlord and did a quick financial analysis. I found out they were paying way too much rent. I renegotiated the rent and thought this was the chance to get Aladdin Rents off the ground. We moved all of our party stuff up there,” he says.
“With party rentals, I’ve found it is labor intensive and you have to control that cost. You can work on labor cost and mechanize as much as possible. Trucks with lift gates and buildings with some docks make a difference. As you grow, you have to make a decision about whether you stay small or go for it,” he says.
That’s when another A to Z Rental owner wanted to sell his store in Eastlake. Miller was able to buy the building over 10 years and purchased the inventory with some bank financing and loans. Now with six locations, he hired his first general manager.
While attending The Rental Show in Miami in 1994, Miller then ran into a new obstacle. He experienced chest pains and at the age of 40 had to have an atherectomy to open a blocked artery in his heart. “I thought I was a goner, but I survived that. I took a month off and as I got my strength back, we proceeded to try to operate all these stores,” he says.
In 1996, the company opened a store in Chagrin Falls. In 1997, an owner who had rebuilt his store after a fire didn’t think the business could survive. Miller ended up buying the operation — including 11.5 acres, an 8,200-sq.-ft. building and new equipment that had to be paid for — after changing banks, getting a consolidation loan and a line of credit.
“The whole 1990s was a time of great growth and these acquisitions really paid off,” Miller says. However, in 2000, the economy in Cleveland started to slip. “In August of 2000, I could see it across the board with all of our stores that the month was not as good as compared to the year before or the year before that. The downtown in the whole area had started and more contractors were going bankrupt and sticking us with their bills. The last five years have been very tough.”
That hasn’t stopped him from finding opportunities and taking a chance on expansion by acquiring three different companies in 2010. However, he says a key problem facing the industry involves rental rates.
“Cutting rates, to me, is the biggest threat to the rental industry right now. Right now, rates are at least 20 percent lower than they should be, but there is a mentality out there to sell your soul and rent things at half price. Every transaction is ‘Let’s Make A Deal.’ It’s very frustrating,” he says.
“We’ve seen an uptick in 2010 and I’m optimistic that 2011 will be a few percent better to keep on a slow climb out of this hole. There is too much negative thinking out there. If we don’t solve the rate issue, more places will go out of business,” he says.
Miller also has done more than just talk about the rate problem. Despite having already purchased a store in Lorain, he also made a deal early last year to buy Parties-to-Go, a rental store in the same area, because of rumors that someone else planned to buy it, reopen and cut rates.
“I decided I couldn’t let it happen,” Miller says. He eventually contacted the store’s manager who put him touch with the owners.
“The kicker is that I wanted to do it, but I also told them, ‘I’m out of money.’ We were looking at doing this in the winter. We settled on a price and I said I would start paying them June through December to buy the whole thing. They said, “OK. We trust you. We know who you are and we remember you.’ The owners, the Brands brothers, had been members of the Northeast Ohio Rental Association,” Miller says.
“I leased the place from them and we are back in business. I invested a ton of money in inventory, filled both those stores on that side of town and we’ve had a great year,” he says.
Miller’s formula to survive and thrive, he says, is to have equipment ready to rent. “Customers are important and employees are important, but nothing is more important in the rental industry than the single concept of being ready to rent. If stuff is not ready to go and you rent it, it will come back with complaint after complaint. The same is true for party rentals. If you want to be successful, this is the one concept that has to be drilled into the brains of everyone,” he says.
In 2003, the Lake County Captains, a Class A affiliate baseball team of the Cleveland Indians, opened Classic Park in Eastlake, Ohio.
“It’s been a cool thing. They have people in costume and do all sorts of promotions,” says Mike Miller, owner of Handy Rents and Aladdin Rents for Special Events in Eastlake.
The team won the 2010 Midwest League championship, but they’ve also helped turn the area of Eastlake into a booming area for business and redevelopment.
“Since the stadium was built, we sold some of our property to someone who built a new doughnut shop. There’s a new Walgreen’s going in right now and there’s more that’s happened. When things get going like that, it’s huge for an area like Eastlake and Cleveland. One thing leads to another,” Miller says.
Among those “other” things has been more business for Aladdin Rents for Special Events, which has a deal to supply tents and other rental equipment for a variety of events at the stadium.