Buying Equipment

[Boggy]

In regard to payment, a rule I always find useful is to divide the dollars for the gig by the hours worked. If I am being payed less per hour than the cleaner (with no disrespect intended), it shows how much I am valued.

 

As for the gear, a long term plan is needed to get what you want in the end. While I do mainly lighting, I buy gear that is suitable for a small show. I can then hire not too much gear to get me up to a good mid size show. As time goes on and I get more gear the size of the shows increases. Most importantly, this process also builds a list of clients which is what is needed to meet payments on larger gear.

[shockers]

Hi just looking through a whole load of things as I too am looking to start a hire company myself. :blink:

 

I know your initial question was how to purchase gear financially, but where do people buy from? Do you have to buy from dealers until you get so big you can supply and then become a dealer yourself, or are there some manufacturers who let you buy direct?

 

Also (2p) make sure you do a good business plan, so that 1. you know, if and how it will work, and 2. you can show other people if you trying to attract cash injection. However always try and buy on your own not with other peoples money, as it is yet another burden/worry that a) you have to give investor profit b) if work isn't coming in they are going to be asking for there money back. Just added pressure you don't need when starting a new business.

 

(another 2p) I have worked with churches/christians for a very long time my dad being an ex AOG minister. Churches have come along way, and most know they want a good sound and that people should be paid a fair wage for a fair days work. You also find that if (selling skills are needed) you manage to gain a bigger budget they are more committed to the event. ie making sure its advertised so people turn up etc.

 

All new businesses are tough at the beginning but make sure you have a market and the ability to make a profit, otherwise with the best will and idea, (especially with a family in tow) it is not worth bothering. :blink:

[bright spark]

I buy kit on the net from Stagelighting.co.uk or Terralec depandant - but Terralec will not accept my card so it tends to be LX Partners.

 

Otherwise my local sound/lighting suppliers. In person or over the phone, then pick the item up when its in.

[paulears]

If you have a supplier you know you will do a fair bit of business with, then it's sensible to open an account - normally they'll need proof you are already trading, and the proof needs to convince them your are a real trader, as opposed to a consumer trying to get a cheap price. A bank account is pretty useful to help here, but getting one is no longer as easy as it was. Places like the nationwide used to do business accounts - but getting one now needs a couple of grand in the account, and even then the number of cheques per month you can write is limited. The banks and building societies are also trying to stop money laundering - this doesn't help when you are starting out. Cash flow is a real problem - as in there is usually a dribble and never at the right time. Credit, like it or not is useful. I've got a business credit card and use this account all the time - it allows me to order kit, invoice it and even after waiting for the invoice to be paid - still pay the account before the due date and pay nothing in interest. Do this enough and you get a really decent credit limit - but never pay just a bit, if you can.Clear it each month. You need to spend time on the money side. Worst bit is when you can't use a credit card and it's an expensive order from somebody you haven't dealt with before. They will normally send you a proforma invoice - i.e. a bill which you pay, then the good arrive. downside is it is a bit longwinded, and you can end up paying for things that don't arrive for ages, and you can't get your client to pay for up front - this is a big problem.

 

Shockers wants to start up a hire company - best advice is to choose your kit VERY carefully. When starting out there are two things to consider. If you can afford it (normally by having a 'proper job' too) then you can buy kit to use yourself mainly, with the occasional hire, often with you in tow to operate and protect the kit). If you buy carefully, you might find it's posible to recoup the initial cost quickly. If you intend to hire to people as fully dry, then the kit may get abused quickly, and you'll need to set a higher rate to recover the outlay plus profit, before it gets wrecked. My first hire item for my business was a long time ago now, but was a radio mic rack - 6 channels, fixed VHF - very old hat now. It paid for itself in 6 hires and was very popular locally. I still have it, although it doesn't get much use now that technology has moved on. Make sure that your client really understand that if they break things they pay for them - I don't, as a matter of policy, repair broken kit. If they break something, they pay for a brand new one. That way reliability, long term, is better.

[Ben]

There are some big dealers out there who will deal with anyone and everyone. I know at Lightfactor we deal with anyone who comes to us and as we are the sole distributors for Light Processor and the main dealers for other brands we are able to offer very good deals and so are many others out there. Its worth looking around for quotes and go for whoever is best and that might not always be cheapest but also one who can deliver and will offer the after sales support that you might need on some items.

[bright spark]

TMB will also deal with anyone with very very good prices.

 

Prices, quality and service better than AC I think.

 

Nice bunch of guys too.

[paulears]

with 'sell to anyone' at the same price policy, it's useful for things you want yourself, but not so good when you need to add a mark-up. Especially if google has led the client to the same source and price.

[Paul J Need]

Look at your market. And look at it again and again until you completely know it.

Always realise there will be someone out there who will do anything to beat your quote or nick your clients

Do you buy cheap or used kit which pays for itself quickly but falls apart after a year or, decent equipment which takes a little longer for you to recoup your costs but last for 5+ years?

 

Always look at residual values too: What can you sell the kit for in 5 years time? We recently replaced some of our older sound consoles. we looked at the Allen & Heath ML4000 48 ch (£9000 ish +VAT) but we saw a 5 year old allen & Heath on ebay for £700. Did we really want to spend this sort of money on kit only to be able to sell it in 5 years time for £600? No! We went for the Midas Verona's instead You're paying a little more but a desk like this will hold it's value over the writing down period. So rather than selling a £9000 console for £600 we'll be selling a £13K desk for £4-5K. You do the maths.

 

Same principle as vans. Buy an LDV or Mercedes? (oh and a white van holds it price better than a Red or blue one :blink:) )In short, look at the long term view, not just the short term savings. One last point.... It;s not completely about price it's about SERVICE, SERVICE, SERVICE!

[Stutwo]

Speak to Paul! Seriously, out of all the suppliers I have ever used, 10outof10 have been the fastest and most efficient.

[gnomatron]

I'll echo that! I bought half a dozen second-hand birdies and a transformer from 10 out of 10, for a very small amount of money and purely for my own amusement. Despite being a somewhat insignificant customer, I found them helpful and friendly, and generally a pleasure to do business with.

[paulears]

Pauls comment about residual values should earn the star of the week award. Too many people look at the initial cost only and fail to do the maths. End of run models look atractive, but the final value just ruins it - buying a Strand 500 series desk, mentioned in the lighting threads currently is a good example. Currently still expensive, but if rumours are true, the second hand price is going to die when the new model comes out. Orginal Mac 250s, even ones with little use, don't fetch much on ebay any more. If products were chosen on the basis that Paul has explained, then financially this is a much better proposition.

[slim_mcslim]

So rather than selling a £9000 console for £600 we'll be selling a £13K desk for £4-5K. You do the maths.

 

How did you calculate the RV on that then?

I think that will be a slight over estimate in 5 years, but I stand to be corrected. In fact I would expect to be able to buy a second hand digico for not far off that in 5 years time.

 

Personally I am a fan of buying selective second hand equipment, which is normally ok as long as you buy good makes which are in good condition.

 

And as for your point regarding LDV vs Mercedes, yes the M will have a higher RV but not at a comparable expense, having the clutch replaced on the sprinter cost as much as we paid for our LDV!!!!

 

paul....

[Paul J Need]

How did you calculate the RV on that then? 

to be able to buy a second hand digico for not far off that in 5 years time.

 

And as for your point regarding LDV vs Mercedes, yes the M will have a higher RV but not at a comparable expense, having the clutch replaced on the sprinter cost as much as we paid for our LDV!!!!

 

paul....

<{POST_SNAPBACK}>

 

Paul,

 

This was an illustration - not a fully calculated example. Just stressing two desks which cost a similar amount will be worth two very different amounts in five years time.

 

As for replacing the clutch......... we've never had to replace anything major on any of our Merc. vans. They keep running. :unsure: