Create Your Own Leasing Program
By Mike Monocello, Business Solutions magazine.
This content management VAR created its own leasing company to close deals that would have been lost. You can, too.
Regardless of the technology industry, I've heard a story like this quite a few times over the past three years: "We worked our butts off to win the business. We spent numerous hours with the potential customer learning the nuances of their business. We took that knowledge and spent time building a custom solution that fit their needs perfectly. We outworked the competition and were chosen by the customer as its partner of choice. Then, when it came time to buy the equipment, we found out the customer couldn't get financing approved by the banks. We spent all that time and wound up with nothing to show for it."
One VAR, Les Olson Company (LOC), has eliminated such situations by creating its own leasing company (named REVCO) to close deals that would have been lost. Indeed, in 2008, the ability to write its own leases became a major key to LOC's success (more on that in a bit). In talking with Jim Olson, president, and Troy Olson, executive VP of sales, it's clear that they are big believers not only in the power of having their own leasing company, but also that it's something other VARs could realistically set up for themselves.
Why Create Your Own Leasing Program?
Before we get into the steps to launch your own leasing program, it's important to understand how LOC and its sister company REVCO work together to provide in-house leases to customers: LOC finds the right solution for a customer. REVCO pays LOC for the equipment. The customer leases the equipment from REVCO. When the equipment comes back at the end of the lease, LOC will buy it back from REVCO at a discount and refurbish it. When someone wants to lease the used equipment, the cycle repeats.
Troy Olson has a few final words of caution regarding operating your own leasing program. First, keep your leases relegated to your core business. "We've had customers ask if we can lease them furniture," he recalls. "That's not our area of expertise, plus if a lease goes bad with an MFP multifunction peripheral), we can resell that equipment." Second, all the stakeholders in your company must be in it for the long haul.