Help with research about equipment hire for schools & colleges

[indyld]

... It's hard to make money hiring out 15A cables; trust me on that one.

 

Years ago, I idly pondered if you could build a business dealing in nothing but lighting and power cable hire, maybe data/sound too. Gigs I was working at the time used a shedfull, and I mean UK main player lighting company shed, of cable of all flavours. This meant that entire stocks of cable were being sub-hired in additionally. And it was happening during busy periods on smaller scale shows too, when smaller providers simply ran out of stock.

 

Of course, cable doesn't go at much of a rate to the end client, often for free with the "real" kit, and the price of copper and connectors all added up. Then there was the storage and admin and the distinct possibility that it might not come back coiled properly, be bust or lost. Despite the fact that I figured that maintenance costs in terms of skill and materials were kinder than some equipment items, I thought that time spent might be factor. The good news was that cables were relatively hard wearing and didn't go out of fashion.

 

Looking at the market, these "freelance" cables were only going to be needed when everyone had everything else off the shelf and still needed - hopefully rarely if they sized their inventory according with their own market.

 

About half an hour later and without the aid of a calculator, I came to the conclusion that there was a reason why such service providers didn't exist and that, no, you couldn't run a business hiring out cable alone.

 

I'd echo the sentiments above, both in terms of the opportunities for particular business models at the moment and the identification of a market niche not known for it's regularity of business or profit margins.

[Derek Tallent]

 

A quick calculation shows that on £2000/37 gives about 54 - so based on the old rule of thumb of hire price being 1/70th of cost, you can see it works. So based over three years, means that if it works every other week for the 3 years then he'll be quids in.

 

Is that really an old rule of thumb, Pete. I've been in the AV hire business 25 years and the rate of return has never been that low. At worst it's 10 weeks/30 days return.

 

Mind you, AV has always had better returns than Sound and Lighting, especially in the "corporate" sector, but I wouldn't start up another hire company again either. Too much like hard work these days

[Pete McCrea]

It's a rule of thumb that I've heard banded around by several audio companies I know, and one of the directors here has used in the past in other PA hire businesses he's operated (both in the Uk and Zimbabwe). You are right in that generally the video kit we own and operate has a higher rate, but it does feel that it's being eroded.

[Domski]

I think this thread really goes to show the value of doing some research before jumping in at the deep end!

 

There's lots of great advice and feedback but the main response seems to be that it is not currently a good climate to start a hire business. On top of that, even if I did, it seems to be extremely competitive and a lot of hard work for not much return financially.

The other alternative is the model of the North West company putting gear out at peanuts but building a good base of customers - this is obviously not popular in the industry and I think maybe puts short term gain at the expense of a good reputation.

 

That said I'm not afraid of hard work or to throw my time and effort into something that I wish to achieve or make a success. Having been freelance for a number of years I'm used to the unknown of not sometimes knowing where the next paycheck is coming from. I think though this particular venture needs some more detailed research and analysis of cost vs profit etc and then I can make a decision based on all the information I have.

 

Thank you all once again for your time and effort in your replies. It's very much appreciated.

 

Cheers.

[Pete McCrea]

Hard work yeap. This is the third evening in a row I've been sat at the table working on quotes, financial planning etc, before hitting the road tomorrow at 07:00. If I wasn't out at friends for dinner tomorrow night I'd be doing the same.

 

The issue is if you choose to invest through finance, then YOU personally will become liable for the finance - doesn't matter if it's a limited company, as the finance companies will take either directors guarantees, or security against your home. So it's not a matter of not knowing where the pay check's coming from, it's also worrying about where the money to pay the finance will come from, and ensuring that you've kept the 20% VAT from your invoices separate to pay them every quarter. Then if you have employees there is PAYE and NICs to deal with, as well as the burden of ensuring that accounts are upto scratch should HMRC decide to do an inspection.

 

So when you first have that thought of "ooooh I could by a Mac500 for £2k and make £60/week on it, I'll be rich!!", it's then tempered by the real world elements, that a lot of people aren't aware of, until you are actually in the thick of it. I certainly didn't know 7 years ago...

[Wuddy]

We've been doing wet and dry hire to this market place for forty years.

 

What I would suggest, rather than polling BR Members is to get out and go and watch a lot of varied productions by your target group in your area.

 

Under the guise of a possible member or interested technical geek find out what they kit own, what they hire in - wet or dry, who they hire it from.

 

The venues used by this market vary enormously in rigging, some will have a full rig, some a partial rig and some no rig at all. If all the groups in your catchment area are using fully or partially rigged venues then there is not much scope for major hire.

 

Also work is seasonal, Sept. to Jan. is panto with all the effects stuff. Jan. to June/July musicals and plays and then pretty quiet July to Sept, Schools closed and Am. Dramers off on Hols.

 

Most of the venues we work are partially rigged so we're usually providing suplementary kit to reinforce FOH, Profiles for gobo projection & specials, follow spots, special effetcs - snow - smoke - UV etc etc, Oh and radio mics, everyone wants a shed load of radio mics.

 

Like others have said I would think it a very difficult time to start a hire business unless you have a serious personal fortune sat in the bank earning nothing, £50,000 in kit out on regular hire is going to earn considerably more than bank interest.

 

Hope this helps

[ojc123]

Thanks very much for your help! questions are as follows:

 

1. How many times a year do you hire equipment for your shows?

Once or twice at the most.

 

2. Where do you hire the equipment from?

 

Futurist Leeds. Good Guys and plenty kit.

 

3. When hiring, what's more important to you apart from safety? (please put 'Y' next to ones that you'd select)

- Age of gear

- Top industry brands

- Appearance of gear

- Presentation of gear

- Price

- Speed of delivery

- Technical support if needed

- Hirer local to you

- Any other?

Price, local supplier

 

4. Which kinds of equipment do you hire? (pars, movers, mics, decks etc)

 

Usually specialist lanterns. We're ok for sound and basic lanterns.

 

5. Would a service offering lighting / sound design for your shows be of interest to you?

No, couldn't afford it and it's about a learning experience for the students.

 

Any other comments

In the face of well-meaning advice from much of the Blue-Room I prefer to buy stuff so that it's available for the students to practise on. Hiring is a nuisance in terms of the time scale of getting it in, training the kids and getting it out again. I'd only hire for very specialised kit and that would be risky for you if I am typical of your market. My hire bills for the last two years would not come to £200, and £140 of that was only because someone had organised an event and hadn't told me so I needed extra kit at the last minute. So, I'm sorry but you aren't going to make a living from me.

 

Edit to add: I'd reconsider whether I REALLY needed it if I was thinking of hiring it. I tend to see hiring as dead money. I'd rather spend the money on something I can use next time.

[Trav400]

What about hiring Party and Disco lighting aimed at Weddings and private partys? I've been thinking about getting into that myself.

[paulears]

The snag is that users tend to think £50 is expensive, and being one-off users, there's very little repeat business. High budget weddings and events tend to get put out to specialists who do complete packages. If you offer a small limited range, then it's difficult to make money out of hire. Twice now, I've been just about to order a new HD camera, top replace the SD ones I had, and each time, just before doing it, I read something on one of the forums where somebody said "did you know it doesn't .... " or a new model was being talked about. I was so close that I actually added one (a dead cert) to my web site where I do some video hire. I didn't buy the camera, but left the camera on the list. People carried on hiring the SD ones, and only 3 times did I get asked for the HD one - and each time I sub-hired, from a friend with one, who finds his sitting around far too much. There is now such a huge range of available kit, it only makes sense to be big. If you have a small number of items available, you really can't be effective. I'm also seeing hire requests wanting assurance that you have spares available. If you hire your kit and two out of ten fail, do you even have a spare? It's no good saying you won't charge for it, they NEED the light. I like the dragons den questions - they totally ignore the product, and just look at the figures. Will it make money? If it's a great product, a great idea or concept, but is not a money maker,they're out. If we ignore this, then we're not doing it as a business, just a hobby - and that is a very different thing!