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JANUARY 2014 issue of
Rental Management

Cover story: Paul Phelon, ARAs 52nd president
Cover story: Paul Phelon, ARA's 52nd president
01/03/2014

Seeing the value of membership

Editor’s note: Paul Phelon, president of Timp Rental with locations in Orem and American Fork, Utah, will become the American Rental Association’s (ARA) 52nd president at the conclusion of The Rental Show 2014 scheduled for Feb. 9-12 in Orlando, Fla. Growing up on a farm in Massachusetts, he once had the dream of playing professional baseball for his favorite team, the Boston Red Sox. When the family sold the farm and moved to Utah in 1973, his father eventually decided to open a Taylor Rental franchise in 1979, which then went independent in 1982 as Timp Rental. Phelon worked at the rental store during his high school and college years. He left the business to pursue a career with Delta Airlines and then returned in 1994. He became president of the company after his father passed away in 1995. After attending a seminar in Seattle, he was asked by ARA to join the General Tool Shared Interest Group (SIG) in 2007, later becoming chairman of the committee and joining the ARA board of directors in that position before being elected ARA president-elect in 2012. Phelon recently spoke with Rental Management about the development of his family’s rental business, the outlook for the industry and the future of the association. An edited version of that conversation follows.

RM: How did you become involved in the rental industry?

Paul Phelon: I was a sophomore in high school when my dad sold the family farm in Massachusetts and eventually put the money into opening a rental store in Orem, Utah, in 1979. My second oldest brother had muscular dystrophy and the places where he could have the best care were Houston and Salt Lake City. My mom is originally from Salt Lake City and she met my dad at Brigham Young University, so it was a no-brainer decision to move here. He didn’t know what he was going to do, occupation-wise, and farming wasn’t going to work out here, but he also had an interest in farm equipment, which led him to the rental industry. He wanted to have a business where the kids could be involved. He started the business as a Taylor Rental. We were initially in an industrial park and learned about the old saying of the three most important things in business: location, location, location. In 1982, Taylor Rental allowed us to go independent and we named the company Timp Rental. I worked in the business through high school and college. When the economy had a downturn here in the early 1980s and the steel mill closed, we opened a branch location in Vernal, Utah, which is in the oil and gas area. That lasted about five or six years and I managed that store for a summer. In the mid-1980s, business started picking up in the valley in Orem. Technology companies started moving here and the economy diversified from a blue-collar steel mill area
with universities to a high-tech area that had better jobs and better wages.

 

RM: Was the company always a member of the American Rental Association (ARA)?

Phelon: My dad would go to The Rental Show and we would take turns going with him. It was a bit sporadic in the 1980s because of the economy, but we’ve been an ARA member and going to The Rental Show consecutively each year since 1992. The Rental Show was the reason we became an ARA member. Like a lot of people, we would go there, buy equipment, talk to people and network.

 

RM: Did you always work at Timp Rental?

Phelon: After college, I lived in New York City for three years working at Delta Airlines. I was working toward a management position. I wanted to get away from the family business and work for someone else, which I thought would be useful for me. I think for the next generation in the industry, it is good to work for someone else, so that you don’t have blinders on. You can get a different perspective. We are trying to instill that in the next generation coming up. You want to have them working somewhere else first, so that they have respect for management. I came back to the business in 1994 and my dad passed away in 1995. I was thrown into a situation we were not expecting. We were in the process of expanding. We had purchased the property for a location in American Fork. Trying to run the business and expand the business were trying times.

 

RM: How did you get more involved in ARA leadership?

Phelon: In 1997, we opened the American Fork branch. At that point, my brother, Joe, worked with the ARA of Utah as a board member. We had a local meeting here with a Bil-Jax manufacturing representative doing a scaffolding safety training seminar. I saw the value of that education and how much knowledge I gained. Then, when industry consolidation happened, the ARA of Utah went inactive. I wanted to find a way to get back involved with ARA and The Rental Show, but it’s hard to find the time to work on your business and not just in the business. I still work in the business, taking care of customers, but with the economy here growing in the 1990s and expanding our business to two branches, today we can have more flexibility to work on the business. In the 2000s, I started to look for more educational opportunities to work on our business. I found an ARA seminar in Seattle about how to value your business with Skip Evans.

I wanted to learn the best way to evaluate our business, so I would know how to focus on how to make our business more valuable and have an exit strategy, so that we’ve done it right. While I was there, I met Kathy Johnson, who was ARA’s chief financial officer. I like to ask questions and Kathy saw that I was more proactive in the discussion and willing to share. The next thing I knew she had my name, called me and asked if I would be on ARA’s General Tool Shared Interest Group (SIG). That’s how I got involved.

With the committee experience, I became more involved with what ARA is all about and what the association has to offer. One of the challenges we have as leadership is helping our members see how much there is at ARA that can help grow our businesses. Some members are just trying to keep up with answering the phone and having money in the till. It’s hard for them to get away from their business. With ARA and the educational products we have, we are going more online. I hope we can get the message to them that they can get all this information and use it to help their businesses to grow. ARA can give you the resources to educate yourself and grow your business.

 

RM: What have you learned as president-elect?

Phelon: I have been observing Mike Blaisdell (ARA’s president) and Mike Flesher (ARA’s chairman of the board). They have been involved with ARA for a long time. I’ve only been involved in a committee since 2007. I can have a different set of eyes and a different perspective. In our family business, we have struggled to survive, fighting fires every day, which is what a lot of ARA members do. We have now grown enough to where I can see the difference between how regionals and national stores operate. The national companies have made us all better rental people and we are more professional now. If you can’t stay up with the times and you don’t have an up-to-date computer system, you are not going to last long. It is ARA that can help everyone get the tools they need to succeed. We are in an industry that is growing and vibrant. There are a lot of positives out there.

 

RM: How are you able to make the time to be an officer of ARA when you also have a business to run?

Phelon: When you have committee experience, you get your feet wet. The time commitment is once a year for the committee meeting. Then I had to ask the question, “How much responsibility can I take?” The first thing was to make sure my family would not be affected and they are behind me. I also have two brothers, Dan and Joe, who were willing to step up and carry the load when I said I wanted to be more involved in ARA. It also comes back to timing. In the 1990s, I would have said, “No.” Today, our business has a better foundation and we are stronger. I can do more when the business is in a growing mode.

 

RM: How has Timp Rental evolved?

Phelon: In 1997, we went from one store to two. My dad bought a computer system in the 1990s, but didn’t implement it. When we added the second location, we knew we had to track equipment and accounts receivable. We couldn’t wait 30 to 45 days to find out how much somebody owed us. Our valley here has gone from 250,000 people to 500,000 within the last 10 to 15 years. It definitely helps to have a business in a growing local economy.

 

RM: What do you see as the biggest challenges for your business in the next year or two?

Phelon: Government regulation and uncertainty. We have health care changes coming up and new taxes to deal with. The concern is what government is doing to small business to keep us from wanting to grow our businesses. Also, in the past, you could look at historical figures and trends to predict the future. With the recession we’ve been through, that’s no longer the case. The new norm is volatility and there is no gauging of historical trends because it changes so quickly. An advantage for independent companies is that
we can make faster decisions. If someone needs a different piece of equipment, we can act today. The Internet also has done so much to change things in a variety of ways, particularly related to advertising and marketing. In 2007, about 80 percent of the people on our general tool committee saw great value in the use of Yellow Pages. Last year, that number was down to 10 percent.

Another thing about 2014 is Tier 4 regulations start to go into effect. A track loader, for example, could cost $5,000 more with a Tier 4 final engine. As rental owners, we have the challenge of higher costs to buy equipment, but can’t push our rental rates up as fast.

 

RM: You mentioned government regulations as a concern. What do you see as the value of ARA’s government affairs program?

Phelon: I think many business owners might feel like they don’t have a voice, but if you sit back and don’t do anything, then you certainly don’t have a voice. ARA has made a lot of progress with the government affairs program and effectively represents our interests in Washington, D.C., and at the state level. We consistently have 80 to 100 people attending ARA’s National Legislative Caucus in Washington, D.C., each year from our state associations to get our message across. ARA’s political action committee, ARAPAC, is an important part of our program that members need to join and contribute to. ARA uses strategic partnerships with organizations like the National Federation of Independent Businesses (NFIB) and the U.S. Chamber of Commerce. Mike Flesher, when he was ARA president, testified before Congress, so that is a testament to our effectiveness in this area. I’m also involved in maintaining and keeping in contact with my legislators. It’s not a one-time deal. I see them at local Chamber of Commerce meetings, town hall meetings and more when they are in Utah. You have to make that visual contact so that they recognize you and listen to your concerns.

 

RM: What makes ARA membership valuable and what more can the association do for members and to attract more members?

Phelon: The association is extremely valuable for those who use the resources ARA has to offer. For me, I did use some of the business management education resources in the past. Then I went to ARA headquarters in Moline for the committee meeting and saw all that there is available from ARA. It’s like when you buy a certain model of a car and suddenly notice how many are out there on the road. It’s the same with ARA. Our biggest challenge as an association is to get the message out so that members take advantage of the value. We, as an association, continue to make it easier for members to access the products and services. For example, the Lending Library is now online as is Rental U, and you have access to everything at your fingertips, 24/7. Then there is the ARA Rental Market Monitor™, the Cost of Doing Business Report and the ARA Professional Driver Education Program. These are great tools to help you run your business and we need more people to use them.

 

RM: How can this be accomplished?

Phelon: On the general tool committee, we stressed and talked about how we would like ARA information to be more smartphone accessible and have information that you can find without having to search for it. ARA staff members are working in this direction with products and services. I would like to see us have a website that is vibrant and tech-friendly to smartphones and tablets, so members can get to things more quickly and easily.

 

RM: What do you see as the value of the ARA Foundation?

Phelon: I’ve learned much more about the ARA Foundation by being involved in ARA. My brother, Joe, applied for and was awarded an ARA Foundation scholarship when he was working toward earning his MBA. That scholarship helped him. Now that I’m on the other end, in a position to help others, I get involved. I participate in the ARA Foundation charity auction at The Rental Show and now it’s easy to donate to the ARA Foundation when you renew your ARA membership. I would challenge ARA members to donate to the ARA Foundation at renewal time and to get involved in the auction where our associate members donate equipment, sponsorships, events and more. The ARA Foundation is working with ARA’s Young Professionals Network, administering scholarships and helping those hit by disasters. If you want to give back to the industry, you can do it through the association and the ARA Foundation.

 

RM: You mentioned The Rental Show. Why is the trade show and convention important for your business and for ARA members?

Phelon: I always try to maximize my time by experiencing everything at the show, including the seminars, Lunch With ARA, the Keynote Session, regional receptions and any networking opportunities. Networking is important because you are meeting people in the industry who can give you advice and information. Then there is the excitement of the show floor, the equipment and seeing what’s new. It’s the best buying time of the year with the best deals. Attendees know that from their experience.

 

RM: What will make this coming year as ARA president a success for you?

Phelon: ARA recently went through 18 months of membership growth. You have the economy as a factor. A tough economy brings out the leadership role, because you have to make tough decisions. ARA officers in the last few years have had to make tough decisions and were doing it for the benefit of ARA and because it will help membership in the long run. Members understand making decisions as board members and officers for ARA’s future is the same as we do for our own businesses. We have to watch out for what the members need and continue our growth. ARA has developed several tools, including the ARA Rental Penetration Index™ and ARA Rental Market Metrics™ so that independents can be looked at in the same way as the national companies for valuing our businesses and rating the performance of our companies. Those are all important things because best practices and standards in our industry are critical for our future. I want ARA to continue in this direction and see these products be used more. I want our membership to see the value and importance of ARA Insurance and realize that they are the owners of ARA Insurance. It exists for us to have a rental business insurance source available to us and to provide stability in the insurance market. My focus also is on education and having members see the value in ARA’s products and services. Engaging with members is critical. You, as a member, have to turn on your computer to access the website and make the time to go to a seminar or training session and attend a state meeting or The Rental Show. I want people to realize how they can grow their businesses using the assets ARA provides.

From seminar to leadership

From seminar to leadership

After surviving some difficult times in the late 1980s and early 1990s, Paul Phelon, president of Timp Rental, always wanted to learn more about the industry. He attended several seminars each year at The Rental Show, but when he heard about an American Rental Association (ARA) seminar happening in Seattle about how to value your business, he had to go.

“After my dad passed away, I saw the importance of things like financial planning, estate planning, exit strategies and buy-sell agreements. These are all things I felt needed to be done,” Phelon says.

“I like the education side of ARA and I was learning as much as I could. Once we had everything in place, so that the business could continue on and not fail, then I wanted more education to be working on our business and not just in our business,” he says.

“I saw that Skip Evans and Sarah Waite were offering an ARA seminar in Seattle about how to value your business. I wanted to learn the best way to evaluate our business, so I would know how to focus on how to grow the business, make it more valuable and have an exit strategy and make sure that we had done it right,” Phelon says.

At the seminar, Phelon met Kathy Johnson, who was ARA’s chief financial officer. “You could tell Paul was a good rental operator. He was interested in the business and asked questions. After seeing him at the seminar, I thought he would be a good choice to be asked to join the General Tool Shared Interest Group (SIG),” Johnson says.

“I remember talking to Kathy during the lunch breaks and the next thing I know, she has my name and I was called to be on the General Tool SIG. I like to ask questions and I think Kathy saw that I was more proactive in the discussion and willing to share information. That’s how I got involved in ARA leadership,” Phelon says.

That was in 2007. Phelon later became chairman of the General Tool SIG, joining the ARA board of directors in that position, before running for office to become ARA president-elect in 2012.

Page 2

STORE PROFILE

Timp Rental, Orem and American Fork, Utah, timprental.com

Inventory: Air compressors, backhoes, excavators, landscape tractors, skid-steer loaders, concrete equipment, generators, lawn and garden equipment, plumbing tools, floor care equipment, painting and wallpaper equipment, power tools, trailers, towing equipment,
tow-behind grills, tables, chairs, saws, scaffolding and more.

Sister company: Move-It Rental has a fleet of moving rental trucks ranging from 12 ft. to 26 ft. and is an authorized truck rental dealer for Penske Truck Leasing Corp. In addition, the company offers moving equipment rentals and supplies, including wardrobe, mirror, dishpack and file boxes as well as packing tape, newsprint, bubble wrap and furniture dollies.

History: The company was founded in 1979 as a Taylor Rental franchise. In 1982, the company became an independent business and was renamed Timp Rental. In the 1980s, the company also had an additional location in Vernal, Utah, for about six years. In 1995, Paul Phelon took over as president after his father passed away. In 1997, the company opened a second location in American Fork, Utah. In addition to Paul, several family members are involved in the business, including his brothers and co-owners, Dan and Joe.

Target customers: Homeowners and small to mid-size contractors, including plumbers, landscapers, carpenters and more. The company also subrents equipment to national rental companies on demand.


Origins of a name

In 1982, when the Phelons ended the company’s affiliation with Taylor Rental, a decision had to be made about a new name. The choice was Timp Rental Center, using the informal “Timp” name of nearby Mount Timpanogos, which is very visible from the store in Orem, Utah.

Mount Timpanogos is the second highest mountain in Utah’s Wasatch Range at an elevation of 11,752 ft. The word “Timpanogos” comes from the native Timpanogos tribe who once lived in the surrounding valleys.

The mountain is thought to be named after Princess Timpanogos because of the outline of a woman laying down and sleeping that can be seen in the peaks if you look for it at the right angle.

Page 3

Baseball and family

Paul Phelon grew up with eight brothers and one sister on a farm in Massachusetts. One of the two-story barns was painted green to serve as their own version of the “Green Monster” left-field wall at Fenway Park, the home of baseball’s Boston Red Sox, when they played whiffle ball.

“My dream was to play for the Boston Red Sox,” Phelon says. “I’ve always been involved in sports and I am a big Boston sports fan from the Red Sox to the Patriots and Bruins.”

He also played baseball in a senior men’s league in Utah until he turned 44. “It was time to focus on our kids and the fun became more of a job. That’s when I knew it was time to retire,” he says.

His children are following his footsteps. Makenna, 13, and Kaitlyn, 11, play fast-pitch softball and Phelon is the coach. Phelon also wrestled when he was young and his son, Easton, 7, now is involved in wrestling as well as baseball. Phelon and his wife, Inger, also have another daughter, Hannah, 9, and Inger coaches the volleyball teams for all three girls.

Phelon also has become more involved in his community’s schools, winning a volunteer award last year from the local parent teachers association (PTA).

“What I cherish most is my family, friendships and the relationships I have with people,” he says.

Outside of work, he also likes to travel and says he has been in 47 of the 50 United States thanks to the time he worked for Delta Airlines.

“I’m only missing Oklahoma, North Dakota and South Dakota, but I’ve been to many places, which helps me relate to ARA [American Rental Association] members and understand what they may be dealing with in their state or town. We can have a connection because we have something in common,” Phelon says.

 

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