M & M Party Planning and Rental, Carol Stream Illinois With 25 years behind him as an event planner, Michael Berk decided it was time to shake things up and make his mark on the rental industry. So, in 1993, he purchased Naperville Rental, a 3,000-square-foot, family-operated general tool and party rental business. "It seemed like a natural extension to put the two businesses [event planning and party rental] together," Berk says.
In less than five months, Berk had moved his operation to a 20,000-square-foot location and renamed the company M & M Rental Center to distance itself from Naperville Rental's mom and pop image. In September1998, M & M again changed its name and logo to M & M Party Planning and Rental, reflecting the "ever-changing scope of the special event market." The company also moved to even bigger digs in Carol Stream, Illinois-a custom-built, 43,000-square-foot facility featuring a state-of-the-art showroom, distribution center and general offices.
"There is a lot of consolidation going on in the rental industry," Berk says, "and we are seeing that occur in the special event end of the business as well. We are starting to see more companies combine services so that they can be more valuable to their clients. For example, people who do props and decor are now doing flowers, rental companies are doing specialty linens, and meeting and event planners are doing everything."
M & M has found its niche as a one-stop shop that can do the job "from soup to nuts," Berksays. "We can provide the event planning, we can be the master contractor and find a location, we can plan the menu with the on-site caterer or bring in the caterer, and we can provide the entertainment, whether it is a band or a 2-ton elephant," Berk says. "We then can create the venue with our own tenting, table and room decor, and lighting and heating."
Berk likens the rental business to the retail industry. There are one-stop megastores that offer everything supplemented by small boutiques that carry specialty items. "To make it in the rental market in the next five years, as with the retail industry, a company will either have to operate at the specialty level, or provide a full gamut of products and services because of consolidation and economies of scale," Berk says.
M & M's revenue has jumped about 40 percent and profits have gone up about 20 percent in the months since moving to the new facility. "A lot of it just had to do with space," Berk says. "When we moved from the smaller building into the larger facility, we were able to offer a wider selection of inventory and turn it more efficiently."
The new facility features 10,000 square feet of office and showroom space, an in-house laundry and linen-processing facility, a maintenance shop and building area for props and decor, and a tent-washing area. It also has five docks to accommodate a fleet of 12 trucks. "Before we were running on two shifts to load at night because we weren't able to load during the day," he says. "Now we can load during the day, and it has cut our labor costs by about 15 percent."
Before one makes the move to become a one-stop shop, Berk suggests identifying a target market and developing a product line geared to that market. He is focusing on the commercial market, including caterers, hotels and country clubs. "You have to be very conscious of the market you are attracting when creating an inventory," he says.
M&M's expansion isn't over yet. Berk is looking to form a strategic alliance or acquire other rental operations within the next five years. "If we don't acquire these businesses, someone else will," he says. "And we believe that we are best positioned to exponentially grow these businesses."