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The tipping point

June 1st, 2013 / By: / Event Production, Feature, Tools & Equipment

Equipment Matters Part 2: Tent rental companies weigh factors when making equipment investments.

People rent tents because they don’t need them all the time, and even frequent renters don’t want to deal with maintenance, installation/takedown and storage. The same factors come into play for tent rental companies in regard to equipment: companies rent equipment rather than purchase it because they don’t need a particular piece of equipment all the time, and transportation and maintenance are often better left to someone else.

“We feel that if we rent a piece of equipment three times through our season, then we need to purchase it,” says Kurt Goeman, president of JK Rentals Inc., Kewaskum, Wis. “Do we have a replacement schedule set up? No, we don’t. Has it been talked about? A million times. We identify the need and then try to fill it—not with the cheapest piece of equipment out there, but with the best.”

Kathy Schaefer, owner of Glawe Awnings and Tents, Fairborn, Ohio, says she doesn’t maintain a purchasing schedule “because there are so many unforeseen things [that can happen].”
For example, one year, Glawe lost $50,000 worth of tents in 90-mile-per-hour winds.

“I had to go back to ‘What do I really need?’” she says, adding that she may be persuaded to make a purchase at trade shows. “You can see, ‘Oh, they’re coming out with this,’” she says. “I got a good deal on a tent washer [at a trade show].

“When I start renting something much more than three or four times a year, I really look
for a way to buy it,” Schaefer continues. And she uses renting as a shopping tool, like test-driving cars.

“We’ve rented things to see if we are going to buy, but we made sure we had exactly the right piece of equipment. Sometimes it will be the one we rented,” she says, adding that she has confidence that the used equipment has been well maintained because “these are people I do business with.”

Big Top Tents & Party Rental, Waukegan, Ill., prepares a replacement schedule at the beginning of the year prior to attending the annual American Rental Association show.

“We already have in mind what we are going to buy for the season: ‘This is what we need to fix; this is what we spend too much time on,’” owner Marlene Leonard says.

If Mike Holland, president of Chattanooga Tent Co., Chattanooga, Tenn., believes a piece of equipment will “help the bottom line with efficiency,” then he will make a purchase. But, he adds, “I am not going to spend thousands of dollars for a one-time use.

“We recently installed a job that required us to ballast a clearspan structure on a terrace, and the only way to get the ballast to the terrace was to roll them onto a freight elevator and then roll them 500 feet to the terrace. We had to get 38 2,000-pound blocks onto the terrace, then had to stack them, 19 stacks of two. We looked at a pushcart, but that was too difficult. We ended up renting electric pallet jacks.”

According to Holland, renting three jacks at $110 a week saved him money because one man could maneuver a 2,000-pound block with the electric pallet jack, whereas it would have taken four men to do so manually.

“If I did this job two or three times, [the equipment] is something I would think about buying,” Holland says. Chattanooga Tent also has rented an extended-reach forklift.

“That piece of equipment might cost $100,000,” Holland says. “If I had a good way to transport
it, it might benefit me to buy. I might use it 10 to 12 times a year, but then if I have to haul it to San Diego or Chicago or even Birmingham, Ala., from Chattanooga [Tenn.], then I have that cost. Then there’s the maintenance on that type of equipment. What stops us [from buying one]
is the cost to transport it, whereas we own a front-end loader Bobcat that’s really easy to pull. The extended-reach forklift requires a tractor trailer; some jobs require two, and you can only put one on a trailer.”

Event Central Rental & Sales, Mechanicsburg, Pa., replaces equipment when it’s aging and parts get hard to come by. Need is what spurs president Scott Woodruff to make purchases.

“It’s not price driven,” he says. “It’s benefit driven, where the benefit is reducing the pressure on people who produce the work.”

Nancy Vasquez, president of Made in the Shade Inc., West Sacramento, Calif., doesn’t have a set formula for when to buy.

“If you need something often enough and
you are able to maintain it, you consider the purchase,” she says. “If the break-even point
is a year or less, you might want to buy it. Another major factor is if it will be safer and prevent injuries.”

“We rent equipment very seldom,” adds Kevin Vasquez, Made in the Shade safety and field service manager. “It’s usually for a bigger structure we have to put up or a tent with a lot of details. We rent maybe six to eight times a year—forklifts, a scissor lift and sometimes a tow-behind air compressor jackhammer.”

Leonard also says she doesn’t rent much equipment. Occasionally, she rents a generator for an electric wacker/driver, but says, “A company next to me rents generators, so I don’t need to buy one.”

Tents Unlimited Inc., Marietta, Ga., on the other hand, rents everything from stake drivers to skid steers, light towers, forklifts and tractor-trailers.

“We have a formula for [deciding when to purchase] different pieces of equipment,” says Sam Wodetzki, managing partner. For example, the company may buy a semitrailer if rentals add up to 39 weeks (75 percent of a year). “It depends on the piece of equipment, but we would like to see a three- to five-year payback. It also is not strictly a dollars-and-cents proposition. When you look at the headaches you can save by replacing a piece of equipment, it’s hard to put a price on what that is.”

Janice Kleinschmidt is a freelance writer based in Palm Springs, Calif.

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