Special Events

Rental Revenues Heat Up

Like many other full-line party rental companies, Hall's Rental Service of Lincolnwood, Ill., has benefited from steady revenue growth in the last few years. Vice president Jack Luft says his company's revenue increased 10 percent, from $10 million in 1998 to more than $11 million in 1999. "We're hoping for another 10 percent increase in 2000," he says, adding, "It's a reflection of the economy."

While that may be true, rental companies also deserve credit for boosting sales through such tactics as adding new products and aggressive marketing.

NEW AND IMPROVED

One way to boost sales is to introduce new product lines. "It's important to add new products because event professionals are constantly looking for better ways to serve their clients," says Tom Gifford, president of Abbey Event Services in Burbank, Calif. "We are updating current products to more modern versions and also bringing in new products that we haven't carried before."

Adding to your inventory can get hairy when you have limited space. "As we bring in new products, we cycle out old ones, which allows us to have a variety of equipment for clients while still reducing our overall inventory," Gifford adds.

Abbey Party Rents of Dallas will introduce "hybrid-style" tents this year, according to Abbey owner John Jakob. He describes the tents as "a cross between structures and standard frame tents." The new tents feature "Kedered" channels, created by braided rope that is welded into a piece of canvas. "Instead of a frame with a whole piece of canvas, the canvas is in panels and goes up in tracks," he explains. "It goes in neater, cleaner and tighter." Even better, "You just pull out one piece if something is wrong.

"For 2000, we will continue to be different," Jakob says. "We will go on putting tents where people say we can't put tents." With a consistent revenue growth of 16 percent annually over the last 10 years, Jakob forecasts Abbey's 2000 revenues will top $5 million.

Lonny Eggleston, owner of Unique Event Resource in Bellflower, Calif., says his current inventory tops $2 million. "We are buying larger quantities of existing inventories so we can do more parties," he says. "Just on New Year's Eve alone, we were associated with parties for 19,000 people nationwide."

Eggleston says his company works solely on high-end events and weddings with budgets of no less than $100,000, which require upscale equipment. Although he declines to give a specific figure, he's expecting 20 percent revenue growth this year, he says.

Hall's Rental Service is also offering something new. "In the last year, we added rectangular china and an upscale line of crystal," says Luft. "We've also added aluminum servicing bowls and trays because people are looking for different metals. They are tired of the traditional silver.

"Our clients want to be on the cutting edge," he adds, "and they want to be able to show their customers new product lines."

Tent manufacturer and rental company Anza Tents of Carson, Calif., is adding a line of lightweight party tents. "Our new line of tents lends itself to the rental market, especially for customers who would prefer to pick up and set up the tents themselves," says owner Ralph Manuel. The lightweight tents will be offered in sizes from 10 by 10 feet up to 20 by 20 feet.

MARKETING 101

Adding new products and services is great, but customers won't know about them unless you market them.

Richard Nelson, president of Minneapolis-based Aarcee Tents, says he is combining several strategies-but primarily marketing-to boost business. "We want to stay within the market we are in, but have a little deeper penetration through aggressive marketing," he says. "We will market through personal sales calls, direct mail brochures and networking."

Direct marketing is also the answer for Gifford. "It's important to get your name out to people in the industry," he says. "They have to know who you are before they can use you and your product."

Another strategy is to help the customers find you. "We do a lot of marketing through the Internet," says Jakob, adding that Abbey Party Rents provides a "huge design function as part of our service."

THE PRICE IS RIGHT

As the overheated prices of millennium events show, even a strong economy doesn't mean that customers throw money around.

"We do competitive pricing, but not in the sense that we advertise ourselves as the 'low-cost company,'" says Gifford. "We try to lower our clients' overall expenses by putting together a package that meets their needs in an innovative, cost-effective manner. Since we own a lot of product, we can reduce our costs and pass it on to them."

"We're probably the most expensive rental house in the nation," says Eggleston, "but that's because we have unusual stuff. However, we are constantly trying to do as many jobs as cost-effectively as possible. Whenever possible, for example, we will drive our own vehicles for the entire job."

HERE WE GROW AGAIN

Many party rental companies are casting their business nets farther to catch new customers.

Eggleston says he is expanding into new markets through alliances with other rental companies, such as Be Our Guest in Boston and Tablescapes in Chicago. "Through our alliances, we can have significant inventories in other cities without the cost to operate in those cities," he explains.

Looking ahead, he adds, "We are looking for more selected alliances where there are pockets of upscale customers." He lists the Texas and Louisiana markets as first priorities.

Manuel is planning to expand his staff and his space. "We are adding a couple of salespeople and moving to a newer facility in Torrance, Calif., which will put us in a better income base." The move to the 25,000-square-foot facility should be completed this month, he says. "We will be close to some of the better commercial locations and to some studio business."

In addition, Manuel has boosted Anza's nationwide presence by adding distributors on the East Coast to increase sales.

In the past 18 months, Abbey Event Services has opened a branch in Upland, Calif., and added a theatrical entertainment lighting division in its Rancho Dominguez, Calif., branch. "My company's projected revenue for 1999 was $12 million, and I think we exceeded it," says Gifford. "That increase in revenue includes our branch expansions.

"We picked those areas because they didn't have the presence of a high-end rental company," explainsGifford. "And geographically, the new outlets are also close enough to our other stores that we can draw on each other's resources."

THE TRAIN GANG

No matter how beautiful their new inventories or slick their Internet sites, party rental companies remain labor-intensive businesses. And many party rental firms are sharpening staff skills to stay ahead.

"Over the last four or five years, we've invested in training our people and have turned the company around," Gifford says, adding, "Our main focus this year is to get even better at what we are doing. We want to clearly define what we expect from our employees and provide them with the information they need to continue to grow."

He proposes two types of training: "We will have formal training on computer skills. And we will have seminars where event professionals will train our staff in specific areas of expertise-such as the proper bar setup."

Ralph Stern, CEO of Tri-Rentals in Phoenix, says his employees are trained on the job. "There's only one way to learn," he says. "We try to send our new people out with our best employees so they learn the good habits right away."

He warns, "Don't forget that the attitude of that delivery person is what your customer sees 99 percent of the time."

BUSINESS PLUS

Beyond adding a new item here or there, some companies are bringing a new philosophy to their day-to-day business operations.

"Some of our high-volume customers use more than one party rental company," says John Moran, president of Classic Party Rentals in Los Angeles. "One of our initiatives this year is to gain greater penetration among these clients. The ultimate goal is to be their exclusive supplier."

Moran says he plans to reach his goal through three means: "We must listen to the client's needs, we must communicate and market new equipment, and we must continue to exceed expectations. Our clients often ask us to perform back flips while balancing on forks. We're pretty good at it, but the Russian judge has yet to give us a perfect score."

Resources: Aarcee Tents, 612/922-7233, www.aarcee.com; Abbey Event Services, 818/569-3838, www.abbeyrents.com; Abbey Party Rents, 214/350-5373, www.abbeyparty.com; Anza Tents, 310/637-8085, www.anza tent.com; Classic Party Rentals, 310/202-0011, www.classicpartyrentals.com; Hall's Rental Service, 847/982-9200; Tri-Rentals, 602/232-9900, www.trirentals.com; Unique Event Resource, 562/529-3632

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