How do I determine how much to charge for permanent venue hire?

Lisa Lane-Collins

Lisa Lane-Collins

Sophomore
Dec 9, 2012
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Adelaide, Australia
I've determined how much to charge for once off hire based on competitors rates but am at a loss as to how much to charge venues who hire stuff on a semi permanent basis (ie it lives there). About to submit a quote for a place, in competition with an established hire company, want the gig, don't know what the competitor will quote, would like to quote less but only ever so slightly (as not heaps keen to undercut).
 
Re: How do I determine how much to charge for permanent venue hire?

Lisa Lane-Collins said:
I've determined how much to charge for once off hire based on competitors rates but am at a loss as to how much to charge venues who hire stuff on a semi permanent basis (ie it lives there). About to submit a quote for a place, in competition with an established hire company, want the gig, don't know what the competitor will quote, would like to quote less but only ever so slightly (as not heaps keen to undercut).
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It is not so much how much somebody else would charge-but what it is worth to you. WHo cares if they are losing money.

What could the gear be earning otherwise? How abusive is the install? ie how many repairs are you going to have to make? How are you going to handle situations when some operator blows up gear?

What about regular maintenance? cleaning amp filters etc.

How much do you have invested in the gear? Is this your only income? or just extra money?

If you can't make money at it-then why bother? So you FIRST have to figure out what the real costs are-then figure your profit needed.
 
Re: How do I determine how much to charge for permanent venue hire?

Well, if I lose this venue hire gig, it's worth $0 with the exception of occasional hire gigs that land in my lap.

If I were to market it properly for I dunno, parties, small rock gigs, speeches, that kind of thing, could probably charge between $100 and $300 for it (depending on how much of it was actually required). That's random hire though, how do people work out how much to charge when something is living in a venue? That trade of between not having access to it anymore and not having to be perpetually bumping it in and out...

Looking like the install will be the definition of tame (just functions and really quiet house music), one hopes repairs and maintenance will be at a minimum, couldn't say at this point what the cost of maintenance will be, not experienced enough. Gear is probably worth about $5000 new. Seems prudent to start saving now to replace items broken by user error.

Currently it is income (as in, the dif between paying rent and not).

Leaving maintenance and insurance out of the picture, the cost of owning it is $0.
 
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Re: How do I determine how much to charge for permanent venue hire?

There's so much more to it than what you're seeing. You can't leave out insurance and maintenance, neither can you ignore the legal aspect of whose gear it actually is should the venue shot down, for whatever reason. There have been many posts about this. Trying to get your gear back can be a nightmare.

But most of all is support. You will have to have enough back-up gear on hand to immediately replace anything that dies. So for every single piece of gear you put in there, you have to have another on the shelf or the ability to repair it RIGHT NOW.

My personal opinion on the "charge a little bit less to get the gig" is that that is absolutely the wrong way to think of it. You charge the same or a bit MORE than the competition and make SERVICE the thing that you do more of. DO NOT fall into the trap of charging less for the same thing. Yes, give more for the money, but make it how you treat the customer, not based on simple dollar value of gear.
 
Re: How do I determine how much to charge for permanent venue hire?

Many times I have actually charged more and gotten the gig. It sometimes comes down to more than just price. If I really want a particular gig I will always ask what their budget is and try to work with it if I can. Your relationship with the client is the most important factor, especially during the long term.
 
Re: How do I determine how much to charge for permanent venue hire?

No crew to operate (well, optional? Already know what the additional charge for that is).

I very much like the idea of value adding by offering better service. In regards to needing back up equipment, I was thinking perhaps dry hiring from someone else while I'm sourcing a replacement could work.

After reading through everyone's replies, I feel comfortable not going any lower than my current price (which is already pretty low).

But, I still want to know how the AV companies around me determine how much to charge for venue hire.
 
Re: How do I determine how much to charge for permanent venue hire?

Lisa Lane-Collins said:
But, I still want to know how the AV companies around me determine how much to charge for venue hire.
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I am sure it varies. For example for company A-the gear may be extra stuff just sitting around that is already written off-so they can let it go out pretty cheap-it is just extra money for them.

For company B, the gear may be part of the regular rental inventory-so while it may be making steady money on the install-how much could it be making if it was rented out?

For company C they may be looking to get into a new market and would like to use the venue as a reference may rent it for a loss-hoping to get business from other such places.

I highly doubt you will find a "standard" for pricing. At least a "formula" anyway.

Just like renting for a regular gig-different companies have different ways they go about it-and it varies with the gig.
 
Re: How do I determine how much to charge for permanent venue hire?

How long of a contract are we talking about? If it's a multi year contract, 20% per year of the cost of the equipment is pretty reasonable, plus any setup and install costs. Ongoing maintenance and warranty would depend on what kind of level of service they expect, and would increase the cost accordingly. ie, if they are going to want you on call 24X7, that's going to be an expensive service contract.

If the equipment lives there, do not charge per show. That makes no sense, as the gear is depreciating as it sits there, and what's to prevent it from being used without your knowledge?

Make sure you have a rock solid contract that states who can use the gear, and who is responsible if something breaks. And realize that if you're there sometimes operating the gear and someone blows it up the next day, they are going to blame you for the failure, even if it wasn't your fault.
 
Re: How do I determine how much to charge for permanent venue hire?

I was on a weekly verbal contract, I know that they want equipment until halfway through March so I guess some kind of 6 week written contract could be an option. (After then they are redesigning the space for functions and will probably be looking at some kind of rent to own thing, nothing complex, just some Mackies on stands, I'd like to be involved with that too but I'll cross that bridge later.)

Currently thinking maybe break it down weekly into a cost that is 1% of the total value? Or is that too low?

And realize that if you're there sometimes operating the gear and someone blows it up the next day, they are going to blame you for the failure, even if it wasn't your fault.
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I figured as much.
 
Re: How do I determine how much to charge for permanent venue hire?

Lisa Lane-Collins said:
and will probably be looking at some kind of rent to own thing, .
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Now you are talking about something completely different-than just a straight rental.

If you want to get an idea of how other businesses do it-just look at your local "rent to own" furniture/electronics stores.

Get a price from them on a couple of pieces of gear-then compare that to what it would cost to just buy the equipment. Then do some simple math. It's not hard.

What I keep seeing as a "theme" here is-" I have no idea what the equipment is worth-what I can normally get as return for it-what it would cost me to maintain the equipment" etc. Yet you want a "guess" at what you could get from it.

I will ask again-What is the VALUE of the gear to YOU. NOT somebody else-but YOU.

If you are trying to do this as a business- you HAVE to look at the business side of it. If you are looking at it from a "well I could get some extra money from this gear I have as a hobby" type of thing-then that is completely different.

HOWEVER the business you are renting it to is going to look at it as a BUSINESS-and will expect you to treat it as a business-not a casual hobby.

Having your gear there is part of them making money. In the event of a failure (let's say at 10pm on a Friday night), the failure could cost them a lot of business-probably more than the rental fee. How is that going to be handled? Who is responsible? How are you going to "make good" if that happens?

Just some things to think about.

What may be casual to you-quickly turns serious if there is a problem.
 
Re: How do I determine how much to charge for permanent venue hire?

Lisa Lane-Collins said:
I was on a weekly verbal contract, I know that they want equipment until halfway through March so I guess some kind of 6 week written contract could be an option. (After then they are redesigning the space for functions and will probably be looking at some kind of rent to own thing, nothing complex, just some Mackies on stands, I'd like to be involved with that too but I'll cross that bridge later.)

Currently thinking maybe break it down weekly into a cost that is 1% of the total value? Or is that too low?
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Perhaps I'm reading too much into this but you posted in the Installs forum and included "permanent venue hire" in the thread title so how did we get to weekly rental or maybe a couple of months at most and speakers on a stick?

Maybe there is a reason you are hesitant to share information but it might help to know:

1. What equipment is involved?

2. Is it dry hire, full production services or install?

3. What is the venue and how stable are they as a business? What is the risk the doors get closed and your equipment getting caught up in associated legal or financial battles?

4. Does the equipment represent potential income if not used in this venue?

5. Do you have a proposed formal agreement or contract and have you had a legal expert review it? There's a lot of stuff to potentially cover in regard to liability, damage, access, payment, etc.
 
Re: How do I determine how much to charge for permanent venue hire?

Perhaps I'm reading too much into this but you posted in the Installs forum and included "permanent venue hire" in the thread title so how did we get to weekly rental or maybe a couple of months at most and speakers on a stick?
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My wishful thinking plus not being completely up to date on what the new owner wanted to do.

No hesitation - just new to this.

At this point in time, they have from me 2 JBL PRX615s (and stands), JBL PRX 18 inch sub, a passive home made sub, 2 amps, 4 Mackie Thumps, hand full of mics/cables/stands, some DBX 231s and a couple of Crown amps, and an Allan and Heath GL3000 and 2 multicores. (Original objective, with the old people running the place, was to facilitate Rock music in the venue space - all done pretty informal, and cheap, in support of an aspiring original live music venue, and in sympathy to their near total lack of income. New guy, different story, I'm looking to do this more professionally now).

Dry hire I suppose although I went in and set it up.

Since the take over, I'd say the business side is more stable as the new owner has another (successful) pub and seems to know what he's doing, still, the doors closing thing remains a possibility.

Yes to income but it would be sporadic (potentially could be less sporadic if I formalise myself as a hire company and advertise properly - which is something I want to do and am now working towards).

Big fat no to 5 (last people informal, new person I want to formalise our agreement but am still waiting for him to say "yes - we are officially working with you and not the rival company"... If I might ask, for an install scenario, how do the contracts differ from the once off hire contracts?

If you want to get an idea of how other businesses do it-just look at your local "rent to own" furniture/electronics stores.
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Excellent idea, will do.

So I might be coming across as seeming to not really know what I'm doing, it's cos I don't, but dead keen to make this work and make that transition from backyarder to professional. Appreciating everyone's input so far.
 
Re: How do I determine how much to charge for permanent venue hire?

Lisa Lane-Collins said:
I was on a weekly verbal contract, I know that they want equipment until halfway through March so I guess some kind of 6 week written contract could be an option. (After then they are redesigning the space for functions and will probably be looking at some kind of rent to own thing, nothing complex, just some Mackies on stands, I'd like to be involved with that too but I'll cross that bridge later.)

Currently thinking maybe break it down weekly into a cost that is 1% of the total value? Or is that too low?
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A typical dry rental is generally 5-10% of equipment value PER DAY. You're thinking about renting the gear for 6 weeks for less than a normal one day rental might cost.
 
Re: How do I determine how much to charge for permanent venue hire?

Lisa Lane-Collins said:
So I might be coming across as seeming to not really know what I'm doing, it's cos I don't, but dead keen to make this work and make that transition from backyarder to professional. Appreciating everyone's input so far.
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Lisa.....

Don't take this too hard, but you're thinking of this bass-ackwards. You're looking at it from the point of view of sound rather than business. Your question has nothing whatsoever to do with sound. You need to be studying business and legal contracts. You seem to be caught up in your dreams and the "romance" of being involved with sound production.

This as a recipe for going broke....

Get yourself to a few business classes. Read up on small business practices. Familiarize yourself with small business finance. Talk to your banker, your lawyer and your tax accountant.

This has nothing whatsoever to do with music or PA stuff. All that is a mere coincidence. It's B U S I N E S S.
 
Re: How do I determine how much to charge for permanent venue hire?

Depending on the market and equip figure 2.5%-10%. Since you're not in the corp market, not likely competing against someone pricing things from a corp structure then you're probably closer to the 2.5-5% area on equip.

There's some weirdness involved with parking gear somewhere. Are they using it Fri-Sat only and it sits the rest of the week (to the point you could come get it and use it for other functions as long as it's back in time for the weekend)? Or will it be used all week?

The percentages above should give you an equip rate baseline... for a day. For multiple days most businesses I compete with or work with don't just multiply by the days involved. It's generally something like 1xEquip Rate for 1st day, 1.5x ER for 2 days, 2-2.5X ER for 3 days and then a generally a weekly rate that is something like 3-5x ER. OTOH, you can't really charge a weekly rate if they are only going to use it on the weekend.

That's just equip... You still have transportation to get it there and get it back. Admittedly if you're going to park it for 6 months then you could heavily discount this part. But OTOH, gas isn't cheap. Trucks aren't cheap. Don't discount the above so much that it would be crazy to discount this part.

Then you have labor to consider. Someone has to set it up and strike it. Again, if it's parked 6 months this is simply and in and an out but nobody, including yourself, should do that for free. Then there is nightly operation. Again, more labor... you don't operate the equip as part of the equip rate you are charging. You charge a line item for tech fees per use (and this could be 25-50hr.. or more...whatever the going rate is with a 4hr guarantee and that should included soundcheck, rehearsals, etc... anytime you HAVE to be there). Or it could be a flat rate for up to Xhrs and then some overtime rate. Your time shouldn't be like a buffet where they use you or your techs for as much as they want for the same price. And don't forget an allowance for time/trouble for a late night breakdown and call.

You will have plenty of expenses as far as insurance, maintenance, 'shrinkage', etc etc etc.... So be realistic with your rates above.

And as been mentioned... You need to protect yourself and equip with an air tight as possible agreement that spells out what equip is yours to the smallest detail, and that there is no rent to own happening here.... Otherwise a bank, property owner, etc is liable to chain the doors and consider everything inside now their property for back taxes, missing lease payments or whatever. And just having your contract is no guarantee you'll be able to get right in to get your stuff. You might end up with some legal expense. And of course there's the other end of the spectrum where the club burns down with your gear in it, or the owner backs up the Mayflower some Sunday morning and disappears with everything including your stuff. These situations will be down to YOUR insurance to pay...
 
Re: How do I determine how much to charge for permanent venue hire?

Weeeell, I get out of this thread that I need to plan this out more thoroughly before attempting again at a later date. In the mean time, one of the established companies in town has offered to supply them at half the rate I was doing so (which I thought was already pretty heavily discounted, like, a full band PA for the cost of a party pack). So considering my lack of insurance and back up equipment if stuff fails and the tenuous on going viability of the business, and the fact that I keep landing random hire gigs around and have to dry hire cos all my gear is in the venue, I'm gonna cut and run!
 
Re: How do I determine how much to charge for permanent venue hire?

Dick Rees said:
Lisa.....

Don't take this too hard, but you're thinking of this bass-ackwards. You're looking at it from the point of view of sound rather than business. Your question has nothing whatsoever to do with sound. You need to be studying business and legal contracts. You seem to be caught up in your dreams and the "romance" of being involved with sound production.

This as a recipe for going broke....

Get yourself to a few business classes. Read up on small business practices. Familiarize yourself with small business finance. Talk to your banker, your lawyer and your tax accountant.

This has nothing whatsoever to do with music or PA stuff. All that is a mere coincidence. It's B U S I N E S S.
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And THAT is exactly why my rental businesses failed. I was to busy "having fun" and not paying attention to the BUSINESS side of things.

It wasn't for lack of work-or not doing a good job-I just didn't properly charge for my services.

That is why I stay away from money and business issues and stick to the engineering side of things. I don't want to ruin somebody elses business.
 
Re: How do I determine how much to charge for permanent venue hire?

I know you've said you're going to cut and run, but for the future Lisa, in Australia, and this is fairly new, we have whats called the Personal Property Securities Register. All your gear (that which you ever hire to someone, or leave at someone else's premises) should be on that register. It makes it *much* easier to prove it's yours if/when someone else decides to "cut and run" with YOUR GEAR! Or a financial institution "changes the locks" on the other party's business.

Personally, I would probably only register the gear for a sale/installation in progress, or for a long-term hire (especially to a club/restaurant)

This was brought to my attention just recently in Australia when a rare guitar company went under. They were storing collectible guitars for people, and also had some on consignment... The liquidators/receivers came in and took control and seized the assets. Those people now face an uphill battle to get their guitars back. They all undoubtedly have paperwork "proving" ownership, but not being on the PPS Register... ?? who knows :(~:-(~:sad:
PPSR Aust Govt site here
 
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