Buying Equipment

[Mr.Si]

Hi there,

 

Was reading the Fundraising topic, but that was slightly different to that of which I want to ask. - If this sort of question is allowed!

 

 

I was wondering how people buy their expensive equipment? - Big Speaker systems, Large Format Mixing Consoles etc...

 

Do people get business loans? or save up for 20 years? what do you do?

 

Only there's a severe lack of sound companies able to provide decent systems down here in Sussex and I really need to setup my company properly and take my share of the market.

 

Si

[colourwatt]

I seem to remember a few years ago, Brit Row Productions were involved with Venture Capitalists for funding the replacement of the TMS 3 systems.

[paulears]

The best way is to get an accountant, and take their advice. My one, when prodded, comes up with great advice. Best thing he ever said to me was, never use your ow money when you can use other peoples! Banks will loan you money, based on a sound business plan, but they want security (as in a big hook to my house). Worth the risk on solid projects, not so hot on speculation. I built up a reasonable float, sitting in a building society account to use for major purchases where you have to spend first and recoup later. Without this, I couldn't do business as if I borrowed the money, the mark up gets eaten away by interest payments. I have some regular clients I supply kit for who, in return for good prices and service, are willing to pay the account before the goods arrive. Most clients won't do this for obvious reasons, and this really stretches your cash flow. I've noticed you want to buy some fairly expensive kit - your accountant may well advise against taking big loans for electronic kit, as by the time you have paid it off, the item has been worthless for ages. Resist the temptation to buy things just to have them - My favourite scheme is buy equipment when available at special prices, then recover the money on a few high earning jobs where some equipment charged for has already been paid for and is essentially 'spare' - what I mean is that I charge enough to buy the new piece of kit over a project, the things already paid for get charged out, the income subsidising the new stuff. If you can do this regularly, it works really well.

[SparkySteve]

I believe alot of hire companies 'lease' their moving heads... I'm not sure if this works for sound kit but it might be worth looking at.

[paulears]

The snag with leasing at the moment is that it isn't as tax efficient as it was, and the big problem is the life span and value. High value, long lifetime products can usually be leased and as long as you don't tie yourself up for too long, can be good deals. The problem is that as a smaller business, getting someone to lease the kit to you can be very difficult.

[Mr.Si]

Thanks for the replies so far.

 

Yes - it's the old catch 22 thing!

 

in order to provide a good and professional service, one needs the gear to supply and use - sub hiring gets way too expensive.

 

But in order to get it, you need to be able to afford it!

[strandgsx]

my company has never had a loan, its all about good money management. we started off with a pair of home made speakers and now hold the largest stock of HK systems for hire in the uk (100 actor systems), (60 projector systems), (60 deacons), and more.

 

Its all about using your money and making it work for you, a good reputation and sound knoledge and skills will ensure trust and get the well paid jobs which fund buisness development.

 

start a buisness plan and set targets, you will have to adapt your buisness to your prevailing environment.

 

Many people go wrong when they start their companies as they randomly buy things thinking (its a good deal) and it will sit on a shelf forever.

 

Look at your catchment area, what do people want, check other prices from other companies and go in and take them on.

 

Sub hire at first then manage profits to pay for growth.

 

I love to waffle

 

Mark

[timmath]

in order to provide a good and professional service, one needs the gear to supply and use - sub hiring gets way too expensive

 

If this is true then you are either pricing your jobs too cheaply or have suppliers which are too expensive!

 

 

In the Mid 90's 'leasing' moving lights was popular, before people realised that at the end of the lease they would have by buy them or lose them.

 

Regards

 

Tim

[Mr.Si]

Probably that I'm charging too little

 

is there a sensible rate? - I do alot of work in Chrsitian circles and "feel" as though I should be charitible as I am a Christian too, etc.

But then, I am a business too!

 

I don't think I'd be able to talk to much about money - as the rules of the forum probably restrict this, but I might be able to.

 

It's bee na while since I've seen the t&c's

[SparkySteve]

in order to provide a good and professional service, one needs the gear to supply and use - sub hiring gets way too expensive

 

If this is true then you are either pricing your jobs too cheaply or have suppliers which are too expensive!

 

 

In the Mid 90's 'leasing' moving lights was popular, before people realised that at the end of the lease they would have by buy them or lose them.

 

Regards

 

Tim

<{POST_SNAPBACK}>

 

good point, but if you look at the life span of something like a mac500 (again, talking lighting, not sure about sound kit) alot of the big hire companies leased them and are now sending them back and 'upgrading' to the newer models. this is an example which fits perfectly... I'm sure there's lots of bad examples out there

[david.elsbury]

Probably that I'm charging too little

 

is there a sensible rate? - I do alot of work in Chrsitian circles and "feel" as though I should be charitible as I am a Christian too, etc.

But then, I am a business too!

 

I don't think I'd be able to talk to much about money - as the rules of the forum probably restrict this, but I might be able to.

 

It's bee na while since I've seen the t&c's

<{POST_SNAPBACK}>

 

Terms & Conditions.

And I know what you mean about being in Christian circles- but at the end of the day, you're a business, and your business is what keeps food on the table and the bills paid. Sure, they may not be able to afford full price, but try and be firm (in a nice way) about your fees, and don't do anything for free (or failing that get them to give you a donation.) Having said that, I'm lending a bit of lighting kit to my church for a gig next wednesday, but the intention is that they see what we have got & (what I) can do, and we can hopefully pick up some work from it in the future.

(my 2c)

David

[gareth]

is there a sensible rate? - I do alot of work in Chrsitian circles and "feel" as though I should be charitible as I am a Christian too, etc.

But then, I am a business too!

Given that the Church Of England is one of the biggest and richest (and apparently a long way from the most ethical) businesses in the country, perhaps you're worrying unnecessarily about the 'unchristian' nature of being in business to maximise profit ....?

 

(Anyone who remembers the episode of the Mark Thomas Comedy Product which looked at the arms industry in the UK, and the background behind the major players, will know what I'm talking about ...)

[J Pearce]

If you want to look at a model of a sound company with christian ethics at heart have a look at wigwam acoustics. IIRC They started out as a small christian company but now do mainstream stuff as well as all the big christian festivals like soul survivor and new wine.

[Mr.Si]

Yeah, I know of 'em - was working as a technician at SS 2003 - the first year they got volunteers to help out in the other venues. I might have to have a chat with Charlie at New wine this year - if I can!

 

Wigwam are a great company - as are Sound Foundation.

 

It just costs soooo much money to own equipment!

[djw1981]

It all depands if you are doing it as a business. There are some Christian organisation who run themselves as a mission, ie, they are funded by churches / individuals to provide high quality sound/tech to people who cannot afford it.

 

IE, church A wants to run an event but cannot afford hire costs, only 65% of it, but church B can afford full price. Church A pays 65% and B pays full price. The difference is put in by tithe, church / charitable donation etc by people who wnat these types of events to continue.