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Use the financial and inventory data generated by tent rental software to maximize profit.
By Jamie Swedberg
The right software—and the right use of it—can make all the difference in today’s economy.
“Some companies use software that’s not really aimed at tent and event rental, but they try to make it work,” says Jack Shea, CPA, chief executive officer of Solutions by Computer, a Springfield, Mass.-based software firm. “It’s not as smooth as software that’s designed to handle this kind of activity.”
Software that is tailored to the tent and event industry provides tent rental and event companies with invaluable financial and inventory management data. Using that data to its fullest helps to maximize profit.
Past, present and future
The key to profitability is good reporting. Shea explains that this comes down to looking at the revenue generated by various types of tents and other equipment in a rental company’s inventory. Some get rented more often than others; some are booked as part of more profitable events than others.
For a rental business, one of the most important metrics is utilization—days out on rent as a fraction of days in inventory, says Bob Shaffer, president of software firm Point-of-Rental Systems, Grand Prairie, Texas.
“Print these [reports] to evaluate what is renting, how often and how much revenue it’s generating,” he says. “Are your 40-foot tents more popular than your 30-footers? Are your keder tents more popular than your pole tents? Does popularity equate to increased revenue? It is amazing how many companies don’t know these details. Review these reports quarterly to determine what to buy and what to liquidate.”
Rob Ross, president of Alert Management Systems Corp., a Colorado Springs, Colo.-based software provider, says it’s important to use reports to predict future income. Alert software includes a real-time infinite calendar that can be adjusted to show rental activity for any time frame—such as a Wednesday-through-Tuesday period, which is more useful to a tent renter than a standard Sunday-through-Saturday week.
“A very critical measurement is forecasting revenue for a time frame based on what’s reserved, what’s been paid, what’s remaining due and so forth,” he explains. “[The software] lets you see where you stand for all the work that’s going to go out and come back for the next six or seven days—how much has been paid and not paid and so forth.”
Speed up sales
One of Ross’s customers asked him to mine her company’s data and answer a niggling question: Had lead time dropped for tent rentals? Indeed, it was true—it had decreased by more than 20 days on average. The same was true to a lesser degree for other large companies whose data Ross examined.
Fortunately, there’s an antidote. Many events recur every year, so good tent rental software is designed to allow users to “clone” clients’ previous orders and adjust them to reflect current prices. The rental firm can add photos and video to create a slicker sales package.
“Then you attach it to the contract in your system,” Ross says. “When it’s time to start planning the new event, the system prompts you via Outlook®. You can easily retrieve the beautiful photos and multimedia pitches to get the customer excited and get them in the mood for the next year’s cycle sooner.”
Cloned orders not only proactively generate revenue, but can be instrumental in making sure a rental company doesn’t lose existing clients, Shea says.
“With a lot of these things, like Kiwanis outings and so on, the committee chairman rotates each year,” he says. “So when the new chairman starts thinking about how he’s going to handle this event, he may go to a rental store that he deals with. Even though you did the thing last year, you lose out if they don’t know who you are. So the clone feature allows you to call the person you dealt with last year, find out who’s handling it this year, and get your oar in the water before anybody else.”
Lead time influences revenue, but so do last-minute changes. Another of Ross’s data-mining experiments showed that of 100,000 equipment reservations over a several-year period, more than 70,000 required switcheroos during the “pull period”—the time when the warehouse is already pulling and loading the equipment. That’s a problem: time, as they say, is money.
The solution? Confirming reservation details down to the minutiae.
“What our system does is automatically document every change with a confirmation based on the customer’s preference,” Ross says. “The customer’s preference might be email, so it goes right to their BlackBerry® or iPhone when they make a change. What we found is this not only helps avoid the changes, but it also is really inspiring to professional renters, who increasingly live out of their cars. It builds loyalty. They don’t want to deal with companies that aren’t providing that level of service.”
Same inventory, more revenue
Good inventory management is another requisite to tent rental profitability. Well-designed tent rental software recognizes four key dates for each transaction: the actual in-use dates (when the event starts and ends) and the delivery and pickup dates. It knows the in-use dates are clad in iron, but it allows renters to tweak the delivery and pickup slightly if there’s a chance of renting that equipment to another customer just before or after.
“Let’s say the event ends Sunday night, so you’re going to take Monday to break it down,” Shea explains. “Normally, the inventory’s not going to be available again until Tuesday. But if I can get another setup for Monday afternoon for another customer, the system needs to tell me that that’s a possibility. That way, there’s less time that the equipment is unavailable but not producing revenue. That’s the key: increasing the revenue without buying more inventory.”
Then there’s the challenge of overbooking specific tent components. Tent rental software tracks all the parts needed to build all of the setups that are rented at the same time.
“Suppose for a 15-by-40-foot marquee tent, you specify four 19-foot-by-3-inch poles, twelve 9-foot-by-3-inch poles, and four 5-foot poles,” Shaffer says. “If you reserve or rent two of the tents, the system is smart enough to multiply the kit items required by two. More importantly, because these same components are used for other tent configurations, the system automatically checks other reservations to ascertain the availability status of each component.”
If a component is causing an overbook for a specific tent, the rental company has several options: purchasing, subrenting, using alternate components or substituting a different product. Good tent rental software can track any of these possibilities, making sure no booking comes up short.
“We’ve integrated subrental and purchasing in a color-coded matrix,” Ross says. “If you’ve got a Dec. 24 rental and some items are overbooked, [the items are] going to show up in red on all the tickets that the item’s overbooked on. If it’s an item that you have a subrental or planned purchase in place for, it’s going to show up in yellow, so you’re going to know that you don’t have enough coverage for that day for that category, but you’ve got a plan in place.”
The beauty of having a subrental system integrated with purchasing is that it prevents you from having to subrent when you don’t have to, he explains. Maybe as the event grows closer, availability clears up; the system will alert you that you don’t need the subrental. Those dollars you save go right to the bottom line.
Tent rental software packages aren’t intended for general ledger. What they do is integrate with common accounting packages so you can increase profitability. Ensure that whatever package you use is compatible with your preferred accounting software, and then generate and exploit those invaluable financial and inventory reports. In this economy, you can’t afford not to.