pricing for a rig rental

Re: pricing for a rig rental

Let's look at the math on this. If you charged 2% on the equipment it will take 50 rentals to pay for it. It will take 50 more rentals to replace it and on the 101 rental you will start to make a profit. This is without any repairs. Multiple dates should be prized and rewarded because damage to equipment comes from it going in and out of trucks and riding on the road. If you charge 5% you have to rent the rig 20 times to pay for it, 20 times to replace it and then you will be making a profit. Take expenses (payroll, mileage, wear and tear on your trucks, hotels, etc.) and double it. However I understand the bottom feeder problem. I wish you good luck in obtaining this piece of business.

Bonnie
 
Re: pricing for a rig rental

The single greatest act of wisdom that anyone in the rental industry will ever do is read Bonnie's post over and over until understanding occurs.

The last sentence has a career worth of warning and guidance in it that will take a decade in the business to begin to appreciate.
 
Re: pricing for a rig rental

Bonnie Lackey said:
Let's look at the math on this. If you charged 2% on the equipment it will take 50 rentals to pay for it. It will take 50 more rentals to replace it and on the 101 rental you will start to make a profit. This is without any repairs. Multiple dates should be prized and rewarded because damage to equipment comes from it going in and out of trucks and riding on the road. If you charge 5% you have to rent the rig 20 times to pay for it, 20 times to replace it and then you will be making a profit. Take expenses (payroll, mileage, wear and tear on your trucks, hotels, etc.) and double it. However I understand the bottom feeder problem. I wish you good luck in obtaining this piece of business.

Bonnie
Click to expand...

+1 and Hey Bonnie ! ...Hope you are doing well... :oJ

Hammer
 
Re: pricing for a rig rental

Bonnie Lackey said:
Let's look at the math on this. If you charged 2% on the equipment it will take 50 rentals to pay for it. It will take 50 more rentals to replace it and on the 101 rental you will start to make a profit. This is without any repairs. Multiple dates should be prized and rewarded because damage to equipment comes from it going in and out of trucks and riding on the road. If you charge 5% you have to rent the rig 20 times to pay for it, 20 times to replace it and then you will be making a profit. Take expenses (payroll, mileage, wear and tear on your trucks, hotels, etc.) and double it. However I understand the bottom feeder problem. I wish you good luck in obtaining this piece of business.

Bonnie
Click to expand...

Excellent post!! Yes, it is possible to make a profit in this business, if you price your products that way. Yes, you WILL lose some jobs that are based on price alone. But so what? Personally, I budget to use any piece of gear for 100 events. I calculate my average cost of the event for gear alone based on 1% of the cost of the gear. After being used 100 times, I will sell the gear, usually getting around 50% of what I paid for it originally. That 50% generally covers the cost of any repairs that may have had to be done.

Now, there are a few exceptions to some gear that I keep longer than 100 events (e.g., truss, stands, Rack drawers, etc), but for main components, speakers, mixers, etc, I try to stay at that level of rotation. This means my gear is always in like new condition. Of course, some less used gear could be 5 or even 10 years old before selling it, but if it hasn't been on a lot of events, that happens.

No, I don't do bottom feeder jobs. The events I do, I get paid very well for. The bottom feeders around hate that for some reason I can scoop up the good paying jobs when they come along, and they are stuck working their arse off for the low paying ones. It's a whole different market segment.
 
Re: pricing for a rig rental

Brian jojade said:
Excellent post!! Yes, it is possible to make a profit in this business, if you price your products that way. Yes, you WILL lose some jobs that are based on price alone. But so what? Personally, I budget to use any piece of gear for 100 events. I calculate my average cost of the event for gear alone based on 1% of the cost of the gear. After being used 100 times, I will sell the gear, usually getting around 50% of what I paid for it originally. That 50% generally covers the cost of any repairs that may have had to be done.

Now, there are a few exceptions to some gear that I keep longer than 100 events (e.g., truss, stands, Rack drawers, etc), but for main components, speakers, mixers, etc, I try to stay at that level of rotation. This means my gear is always in like new condition. Of course, some less used gear could be 5 or even 10 years old before selling it, but if it hasn't been on a lot of events, that happens.

No, I don't do bottom feeder jobs. The events I do, I get paid very well for. The bottom feeders around hate that for some reason I can scoop up the good paying jobs when they come along, and they are stuck working their arse off for the low paying ones. It's a whole different market segment.
Click to expand...

I would suggest that you carefully re-read what you wrote..
I'll paraphrase: you bought an item for $100 and charged $1 for 100 rentals, paid $50 in repairs, then sold the item for $50
let's do the math: start at -$100+100-50+50=0 <- ZERO

either you've made an error, or your business won't turn a profit ever.. and that's not even including overhead

Jason
 
Re: pricing for a rig rental

Jason Lavoie said:
I would suggest that you carefully re-read what you wrote..
I'll paraphrase: you bought an item for $100 and charged $1 for 100 rentals, paid $50 in repairs, then sold the item for $50
let's do the math: start at -$100+100-50+50=0 <- ZERO

either you've made an error, or your business won't turn a profit ever.. and that's not even including overhead

Jason
Click to expand...

No, that is my actual COST for budgeting purposes. If I sold the rental at 1%, I would show no profit. My typical rentals are 5-10% of cost. That's where the profit comes from. And of course, labor and transport are charged separately.
 
Re: pricing for a rig rental

Tim Weaver said:
I'm pretty sure that an item having been on 100 shows would not need many repairs, if any. I'm guessing a large chunk of the sale money goes back in to the kitty. It's nice to have budgeted for the repairs though.
Click to expand...

That is correct, the actual repairs are minimal. However, that budget also includes cleaning and general maintenance labor for the rental gear as well.
 
Re: pricing for a rig rental

Jack Arnott said:
RE: 5%

Everybody reading this should be flocking to ATL and Wausau where you can pay off a sound system in 20 shows.
Click to expand...

Jack, you are spot on, if I could get 2-5 % I'd move to the moon...I would like to see a more detailed discussion on this, even someone like me who has been in business for 20 plus years has pricing issues...I do not discount labor as its a hard cost and I usually at best break even on that, I often lose on trucking....thre are corporate pricing structures and rock n roll pricing, I try to use the same matrix just steeper discounts for rock n roll....what is hurting me is I'm a Meyer house and usually lose out In a bid to a EAW, JBL or EV house, it's easy to figure out why , plus when a rider says for FOH console they will take a M7 or Digico SD8, well I don't own a M7 so I price it with the Digico....I just lost a account I've had for awhile because I have MICA and not KF730, I have Profiles and 5D and SD8's and they have M7's...so how do you compete with that..the guy with that rig does a good job, I just have more expensive gear and I feel I do better and give better service, but maybe not worth 750 worth of difference to a club.....my 02 cents....and it's getting worse out there
 
Re: pricing for a rig rental

If the gear you are providing drastically exceeds the needs of the customer, then you're going to have a hard time making a profit on that gear. Yeah, I could go out and buy better gear than I have, but that's not going to make me any additional $$$.

The trick to making a profit is buying the gear needed to do the job that you are able to rent out profitably to your customer base. Would I love to use a high end digital console for every gig? You bet. But I can get the job done with a Presonus board, and the client is happy. They wouldn't pay an extra dime for me to bring in more gear, so it's a bad investment for me to buy that high end of gear.

Now, there are times where I'll bring too much gear. For example, if I've got a basic show that just needs a small analog mixer, I might grab the Presonus board because it's easier to get to and already racked up. I won't make more money because I brought it, but I saved myself the headache of moving a bunch of boxes around.
 
Re: pricing for a rig rental

Perhaps this thread should be renamed the " Expensive Hobby" thread.

Eric Cagle said:
I already stood corrected on that figure as you go up the food chain. I think we determined in the Versarray thread that my market is considered a JV topic, even with a VCA console, so I really should have given it a little more thought and research before I posted the 5% figure. I made a couple of calls and checked the net for advertised pricing and confirmed an ADVERTISED rate of well under 2% of list for a 4888. One of my buddies quoted me around 1% for a 4887 and told me he could do a little better in the slow season and that price included a tech. Consoles are advertised even lower. Here is a copy and paste right off of a web site:

Digital Console Rental Rates

Daily Rate Weekly Rate
Yamaha M7CL-48 $200 $600
Yamaha LS9-32 $125 $375
Avid SC48 $200 $600

For my bread and butter I target a very specific market that has sometimes taken me years to even get a chance to bid on. The 5% of cost, which I use actual cost as my business guideline, is where I start for a one off. Do I get it? Often yes. Do I work for less? More often yes. Do I work for less if it is more than one event even with seperate set and strikes? Always yes.

On an interesting JV note the bottom of the food chain is even lower. I was at a show last night where the drummer rolled in with a bought new by him 4 box (2 a side) active Apogee APL-220 rig with 2 of the APL-12 powered dual 18" subs in his trailer. Yamaha MG24 console, some decent outboard gear, and Ashly EQ's on the monitors. All in like new condition. Being somewhat of an Apogee fan I struck up a conversation and asked if he ever rented out that system. He told me "Sure, I get $150-$300 per night depending on the gig." I got his card.
Click to expand...
 
Re: pricing for a rig rental

Bonnie Lackey said:
Let's look at the math on this. If you charged 2% on the equipment it will take 50 rentals to pay for it. It will take 50 more rentals to replace it and on the 101 rental you will start to make a profit.
Bonnie
Click to expand...

To my way of mathing, you are doubling up. You either have to pay for a piece, or replace it. You do not do both or you are paying for your gear twice.

At 2% a piece of gear is paid off in 50 uses. (If you are paying interest on a loan, this complicates things.)

No, I don't do bottom feeder jobs. The events I do, I get paid very well for. The bottom feeders around hate that for some reason I can scoop up the good paying jobs when they come along, and they are stuck working their arse off for the low paying ones. It's a whole different market segment.
Brian Jojade
Click to expand...

I distinguish between bottom feeding and ankle biting. Bottom feeding is doing the smaller gigs the big boys are too big for. Ankle biting is doing any job, no matter how big of small, at less than the next person, just to get the gig.

I struggle to pay off my larger systems. But my smaller stuff pays for itself multiple times.

And since I charge the same rate for my labor, no matter which size show, I like doing the smaller size gigs with less gear humping, and more getting bands on stage and playing.

I have Profiles and 5D and SD8's and they have M7's...so how do you compete with that..the guy with that rig does a good job, I just have more expensive gear and I feel I do better and give better service, but maybe not worth 750 worth of difference to a club.....my 02 cents....and it's getting worse out there Randy Frierson
Click to expand...

On the old LAB Chip Self wrote a great article on how large format sound boards and feeder cable will never pay for themselves.
I have looked at my largest sound boards as advertising, and I make much more ROI on my smaller boards. (ROI is not the only economic consideration for everything.)

I guess it depends on your situation. I have long taken into account a t-shirt I saw in 1993. "Growth for the sake of growth is the ideology of a cancer." As such, its a good time to be a bottom feeder. A lot of shows where the competition has had 48 ch boards, and huge stacks of speakers for community events are now quite content with my 16ch board, and realistic sized speaker systems. It only pays me to have customers who appreciate my service. I have heard some people bemoaning the fact that their customers don't like the look of the digital FOH. My customers like the austerity, more seats, time saving. Different strokes.

If the gear you are providing drastically exceeds the needs of the customer, then you're going to have a hard time making a profit on that gear. Yeah, I could go out and buy better gear than I have, but that's not going to make me any additional $$$.

The trick to making a profit is buying the gear needed to do the job that you are able to rent out profitably to your customer base. Would I love to use a high end digital console for every gig? You bet. But I can get the job done with a Presonus board, and the client is happy. They wouldn't pay an extra dime for me to bring in more gear, so it's a bad investment for me to buy that high end of gear.

Now, there are times where I'll bring too much gear. For example, if I've got a basic show that just needs a small analog mixer, I might grab the Presonus board because it's easier to get to and already racked up. I won't make more money because I brought it, but I saved myself the headache of moving a bunch of boxes around. Brian Jojade
Click to expand...

I don't have large digital boards, but I do find the convenience of the digital snake, and no outboard/drive a big enough difference that I will bring them to gigs that might not warrant the price.

Regards, Jack
 
Top Bottom