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Explaining Marquee Hire Prices

For Organisers & Rental Companies

"Marquee Hire Prices and Cost Comparison."

Like with any business price model, marquee hire prices can be concluded as a factor of the costs of start-up and ongoing up-keep.

Operating profits keeps the business ticking over and with healthy future prospects. OP, as known in abbreviated fashion, primarily contribute to the paying of staff salaries (including the owner), plus funding future re-investment into operational infrastructure, as well as saving up a capital sum for facilitating a future exit from ownership.

The rate of profitable return in trade will depend greatly on the price point offered for delivering the hire service of event marquees. Too low a price and there will simply not be enough (profit) margin involved to make it worthwhile in the long-run and also if the price is too high, it might well be a discouragement to prospective customers who retreat at the stage of 'window shopping'.

Trialling or 'floating' various prices is one approach to settling with your chosen final hire prices, but otherwise a more faithful manner of determining prices is doing your home work & isolating a single price for each service element, which you then simply hold for a substantial duration (minimum 12 months at a time) only be reviewed at cyclical intervals, like tax year end.

The costs of running a marquee business clearly can be affected by many contributing factors, each of them having a cumulative impact on the ability to hold your marquee hire prices. The management of financial governance within a hire business comes with careful consideration, attention to detail and indeed patience to ensure that real service excellence prevails to all customers above all other goals, yet also planning for long term profitability, for sustaining for commercial viability.

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5 Important Considerations When Determining Marquee Hire Prices

1. Cost of Starting Up

The cost of acquiring equipment and commencing operations all have to be accounted for in order to ensure a profitable return is achieved. Operating profit margins, which contribute to the pricing therefore ought to be considered in light of incrementally returning back to the owner the original cost of setting up.

Once price is decided, the operation profit component of that figure, whether a percentage or outright sum, will dictate the rate of return as contributed by every sale made.

2. Cost of Delivering A Hire Job

The 'cost of delivering a marquee hire job' - no two jobs being alike - will affect marquee hire prices. Where the costs incurred of delivering certain more complex or longer duration jobs will naturally be higher, higher price points will apply accordingly to ensure profitability is achieved on every type of job.

3. Cost of Cancelling A Hire Job

Where tightly controlled capacity planning leads to maximum yield of available profit, any occurance of untutilised hire service capacity is effectively a failure to make potential profit. Such cases of underutilised profit can occur where there is a cancellation of marquee hire bookings, which are not recovered with a replacement booking, thus presenting the opportunity cost of losing that available service slot.

Such cost of cancellation ought also to be factored into the runnings of the business, or at least minimised perhaps by perhaps security deposits being taken against reservations.

4. Ways To Reduce Hire Cost (Cost Efficiencies)

Hire cost contributors can be tweaked or in some cases entirely avoided in order to reduce overall cost of hire, which can then be transferred to marquee hire customers as savings against current list price, if adjusted.

Such efficiencies could be in cheaper travel arrangements, for example, in finding a route to the venue which bypasses a toll charge or even in buying a van versus incurring increasing hire charges on every delivery.

5. Having Single Prices Per Service/Product & Not Altering Your Prices Depending On Customer

Being variable on price erodes trust in commercial interactions as it shows partiality depending on opportunity and is really therefore stealing from customers with dishonesty.

It will pay off to always remain transparent and honest in your commercial interactions. Attaching spurious premium charges which cannot be substantiated truthfully, is one sure way to damage commercial relationships. Name your price and stick with it to the keeping of your conscience in interacting with customers.

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14 Main Cost Drivers Of Marquee Hire Prices

1. Equipment Purchase

The purchase of equipment is a key capital cost in the start up, maintaining and growth of a marquee hire business. Acquiring the most advantageous array of hire equipment, at a feasilble price and affordable according to budget is a major feature of beginning such a hire operation.

The repair and replacement of kit is also key to delivering satisfactory services consitently to customers and end users. Such repair can incur both labour and parts costs periodically to keep up the standards.

Growing the service capacity could also involve buying new or used marquee stock in order to achieve a greater reach, range or turnover of jobs simultaneously.

2. Transport & Vehicles

The transport for equipment and labourers is a key factor in either deriving cost projections for starting a marquee business as well as the ongoing, profitble continuance of an existing marquee hire business.

A vehicle for hauling the structures is a long term investment and the getting the right one for the job in every regard is of great importance achievement.

The marquee hire van is going to be a heavily used vehicle, and one ideally which should accommodate a team of labourers with kit together.

3. Branding & Start Up

Making a sound start to any business takes considerable planning and a decided strategy.

Branding and business identity will make a difference to how well the core marketing messages are communicated with the customer audiences. The commercial appearance of a marquee hire operation can either be undersold or overlooked to the detriment of ongoing performance.

Sound start-up business planning and advice is a valuable investment before getting out there. Especially in the case where new business owners lack the experience or confidence, getting a little extra guidance with some computer based spreadsheets or marquee hire business planning templates could be just what you need to get off to a flying start.

4. Marketing

Reaching audiences of potential customers for marquee hire services takes time, patience, determination and of course available budget.

The DIY marketing approach for many can be a hit and miss experience, with disappointment and loss of time involved if targets are not met. Where various sub-disciplines of marketing offer their pros and cons for growing a marquee business, such as SEO for example, the option of hiring a marketing consultant, or outsourcing marketing services can seem a better or more sure investment as the campaigns would handled by more experienced hands.

However, there are risks involved in yielding a favourable return on investment with a marketing service. Such risks include being misaligned on profiling the types of customer enquiries are desired.

5. Recruitment

The most critical type of recruitment need is in the area of labourers. Getting experienced and expedient rigging crew members on your books for fulfilling marquee hire jobs will be worth it's weight in gold, to coin a phrase.

Keeping rigging crews occupied during off season months maybe tough if there are fewer outdoor event hire opportunities available in the winter, so alternative off peak duties must be identified.

6. Training & Regulations

With the risks involved in temporary demountable structure installation, it is prudent to make provision for comprehensive operational training, both for new recruits and existing staff members to ensure minimum level competency. The costs of external rigging training will be varied, depending on provider.

Where competency and availability of internal training resources are possible, a marquee hire company could find it cost effective to handle this in-house.

With the added factor of a transient labour culture due to the apparent seasonality of event marquee bookings, by enlarge the peak season months are April to October, many marquee companies find it hard to retain staff consistently.

However, even those firms who are able to keep rigging staff all year round, are still short of ideas for keeping them busy - November through to March.

7. Labour

Marquee rigging and seamstress jobs are the most hands-on practical disciplines within a marquee manufacturer company. The latter job being in year round demand, yet often hired on a temp/part-time basis. This expertise is required in the main part for handling routine and emergency tent canopy repairs.

Reveune cost for such staff is budgeted for in advance of the year ahead and paid for by operational profits.

8. Office

Office clerks are needed in larger marquee hire businesses for handling day to day administrative functions, like submitting invoices, handling inbound telephone enquiries and stock pick notes for installation.

Some companies may utilise remote PA services for answering phones etc. at affordable rates. But for on-site paperwork an in-house office admin, on salary will be more favourable.

9. Travel

Travel costs commonly would entail fuel and other vehicle related variable and fixed costs.

When travelling along roads with toll or congestion charges, your marquee hire job can accumulate additioanal planned or sometimes in the case of traffic fines, unforeseen charges.

Your marquee hire price for delivering the job should absorb the costs of anticipated traffic or travel charges.

10. Parking

The issue of parking the van to fulfil either a job or site visit, particularly with strict inner-city parking restrictions & scarcity of spaces, this can lead to costly mistakes at times. Such mistakes will of course have an impact upon the bottom line profit of a marquee hire business.

11. Depreciation

An accounting principle which helps businesses account for the loss of value of capital assets over a fixed duration of time can be used to apply prudence to financial asset planning.

Where marquee hire equipment and other capital pieces of equipment, like vans and vehicles, are held by marquee hire companies throughout the duration of their use - there is a depreciation of their marketable value, due to wear, tear and aging.

This depreciation can be accounted for and absorbed as a cost within the budgetary modelling of the business to ensure at the replacement of the asset will take place before it's value descends beneath an acceptable figure.

This cost of depreciation therefore must be withdrawn from the operation profitability of the business - thus having an upward pressure on the price of hiring a marquee.

12. Generator Fuel

If a particular marquee hire event booking, carries with it the need for a power generator to provide the electrical demand of associated equipment like, lighting and heating, there also comes a cost for fuel.

Generator fuel is a foreseable cost for marquee hire jobs and is factored into the cost of sale for accounting purposes. This likewise will affect the overall booking hire price.

13. Hire Equipment Storage

Marquee hire equipment needs to be stored somewhere by the hire company when it is not on the road in transit or on-site pitched up at an event.

Storage will come at a cost to the marquee hire company. Either the company has an in-house facility where it holds kit , in which case the associated costs of internal storage like, ground rent etc. will be passed on to the hire prices of marquees, or an external facility will be hired which carries direct costs, paid for by fees.

14. Cleaning

Cleaning and maintaining marquee hire equipment is a necessity for delivering consistent quality to end users, planners and organisers alike.

To ensure a strict adherence to health and safety measures for marquee hire, equipment must be inventorised, audited and assessed regularly. Records will be kept on each item of equipment declaring it's worthiness to be used again.

If any kit is decommissed for missing the mark, it must be sepreated out from among the currently available marquee stock and quarantined until repaired or replaced before returning to occupy it's place among available stock.

Repair or replacement of equipment comes at cost, whether purchased new or used, and will be accounted for in the budgeting of price of marquee hire jobs.