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ASK party rental operations, “How's business?” and you may have to wait for an answer. Why? They're too busy to reply.

At Atlas Party Rentals in Boynton Beach, Fla., “Revenue has increased 400 percent in the last seven years and 75 percent in the last two years,” explains vice president and chief operating officer Eric Wechsler. “We've also seen that the jobs and the events themselves are getting bigger as more people and businesses move into the area.”

Mark Clawson agrees. The head of Salt Lake City-based Diamond Rental says he has seen a 25 percent boost in revenue from his three party rental stores this year over last.


And this business bubbles up from “across the board,” says Michael Miner, vice president of sales and marketing for Los Angeles-based Classic Party Rentals. “It's coming from event planners, caterers, wedding planners — all the segments that we work with.”

“Weddings are a huge portion of our business and continue to grow each year,” notes Randee Wechsler, Atlas Party Rentals president and CEO. “We've also seen corporate parties on the rise again since the fallout from 9/11. Life cycle events such as weddings and bar/bat mitzvahs always seem to be recession-proof and somewhat immune to what's going on in the larger world.”

To serve the bigger bashes, party rental operators are beefing up their own capabilities. “We have increased our staff as well as our truck fleet,” Eric Wechsler says. “We've also increased basic inventory, settings for larger events, and our selection of both new and specialty items. Ours is not just a drop-off and pickup service, and it's crucial to our business and our customers' satisfaction that we respond to these needs.”

Classic Party Rentals is in a unique position to service the boom in business. In the last year, the company has nearly doubled its revenue, to $185 million annually, due in part to its acquisition of 11 new rental outlets. Thanks to its network, “We are able to share products and team members from other locations that may not be experiencing a spike in activity,” Miner explains. Even so, the company has expanded its truck fleet — both purchased and leased — by about 10 percent in the last year, Miner estimates, all the better to move inventory between its outlets in California and Phoenix.

This ability to shift inventory and personnel to where it's needed has meant Classic has not had to turn down any business. “We've been able to work around schedules and accommodate our clients by working with other locations,” Miner says. For example, for the Oct. 29 gala celebrating the reopening of L.A.'s landmark Griffith Park Observatory, Classic will pull in equipment and staff from three of its outlets to ensure a gorgeous gala.

To service the boom in business, Diamond has taken the “luxury,” as Clawson puts it, of stashing a reserve crew and truck in the warehouse to jump in if needed. “In the morning, you don't really know what will happen,” he says. “A driver may be scheduled to get to four deliveries by 5 p.m., but then you find out at 2 p.m. that he's still on the first delivery. You are in a world of hurt!” While an extra cost, the heavier staff level enables Diamond to “throw our forces at the problem,” Clawson says.

Even so, Diamond has “absolutely” had to turn down business, he notes. “We can only do at peak times what our inventory allows. There were many times this year that customers would have liked us to do more.”

Atlas Party Rentals has used the boom to cherry-pick business. “We have been able to pick and choose events and jobs to an extent,” Randee Wechsler says. “We are looking at what is more profit-driven rather than revenue-driven. We've formed alliances with the smaller rental companies that represent significant profit for them but not necessarily for us. That has been a real win-win because they in turn give us larger events that they are unable to handle in-house.”


For all the good news that good times bring, business booms bring their own set of headaches. For one, the strong economy means other industries are growing, too, and competing for employees.

“The pressure is on for semiskilled labor,” Clawson notes. “People who are just starting out and need to make enough money to support a family and have some toys are getting really compelling offers from other businesses. Tent installer or tile installer? If someone can make $5 more an hour installing granite countertops, we lose good people.”

The fact that some employees are drawn to the whirlwind pace of events keeps them in the party rental fold, Clawson notes. But others forego the chance for overtime pay in exchange for a more predictable work schedule. Diamond, which also owns 14 tool rental outlets, was able to transfer a truck driver who was beginning to feel burned out by the pace of party rental delivery to its tool side. “He made less money in overtime pay, but as a guy with a young family, he decided he'd rather spend more time with his child,” Clawson explains.


Although he was only a teenager then, Clawson remembers the economic doldrums of the mid-1980s and the toll they took on his family's business. “It was just awful,” he recalls. “There were layoffs all around, and people weren't building homes.” The experience taught him to avoid growing too fast. “It's very possible to ‘grow’ your business into bankruptcy, not realizing how much working capital you have tied up in your business,” he cautions. When the economic cycle heads south, “Your receivables get extended, then you have to extend your payables. You thought you had a great relationship with your bank, but then they don't return your calls!”

But these are lessons lost on many managers under age 40, who — with the exception of the lull felt in many places after 9/11 — have “never been through a down economy,” he notes. “They think the customers always come and always give you money.” Business booms may seem to promise unlimited growth for everyone, but, “In an uptime I'd want to buy 100 chiavaris, but in a downtime, those 100 chairs will make it difficult for me to make next week's payroll,” he says.

And when will the business cycle head south? If only we knew.

“Perhaps after the {U.S. 2008} elections, we may see some slowdown,” Eric Wechsler says. But party rental can always count on business from the perennially well-to-do. In his turf of Palm Beach County, Fla., “People come down here, hide behind private gates, and throw extravagant parties and events whenever they wish,” he notes. “To an extent, this level of wealth rarely if ever experiences slowdowns.”


Atlas Party Rentals, 561/547-6565; Classic Party Rentals, 310/535-3660; Diamond Rental, 801/262-2229


Business moves in cycles, so it's important to remember during busy times that slow times will show up sooner or later. Here are some smart moves to make now:

  • It's great to reward hardworking staff, but consider giving them incentive bonuses or paid time off rather than salary increases. This way, you are rewarding their productivity but aren't locked into high pay scales if sales drop.

  • Make your suppliers safeguard your working capital. If good times mean you are purchasing plenty of inventory, ask for volume discounts.

  • Even though it may seem the money is flowing in, stay on top of your receivables. It's easy to develop sloppy habits when times are good.

  • If you have clients that you have to chase to collect from, considering “firing” them.

Managing the big three — debtors, creditors and inventory — is vital not only when times are slow but also when times are good.

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