On Thursday July 13, it was announced that most of the inventory and assets of Los Angeles-based Classic Party Tents – once one of the nation’s largest event and party equipment rental companies – were being sold off by a third- party firm. What can we learn from this surprising news?
Before we answer that question, I’d like to point out that what has happened to Classic Party Tents, while shocking, is definitely not a sign of the times, nor is it an indicator of where the industry as a whole is headed. Without a doubt, there is plenty of money to be made by companies as big as Classic Party Rentals or as small as a regional tent and event company, and by every size organization in between. The key to success, more than ever before, is paying close attention to the labor side of your business. After all, labor is the biggest cost factor of every single install you are hired to perform. Applying this resource wisely can boost productivity and profits at the same time.
Here are three key practices you can follow that will help increase your success and limit failure:
Chasing jobs by ratcheting down your bid price is a sure-fire path to closing a tent rental business. Low-balling to get the job is generally worse than turning down the opportunity in the first place. While there may be short term value in bringing in as many gross dollars as possible to service debt and maintain balance sheets, the approach is unsustainable if you cannot deliver a net profit. If there’s anything we can learn from the loss one of the industry’s big players, it’s something that many smaller, and carefully-run tent rental businesses already know:
No commercial tent rental business, large or small, can escape the universal problem of rapidly rising labor costs. Rental companies that fail to grab ahold of new, faster installations technologies are condemned to stretch completion times, pay more for labor and limit (or lose) profitability, every time they send crews out to job sites.
Continuing to do installs in the way they’ve been done for years, much less decades, savages not only the bottom line, but also the crews who bear the burden of that decision as they struggle through 70- to 80-hour weeks. The very latest tent installation technologies are an increasingly well-known “secret” that permits companies to install more tents, with less effort, so they spend far less time on every job. Task after task, from driving stakes to pulling roof panels, can now be done in a fraction of the time it once required, and with fewer crew.
Turnover is one of the biggest problems any commercial tent rental company faces, year and year out, because it limits productivity severely. It also leaves companies scrambling for temporary labor which arrives on the job with no experience. Crew productivity slows, with constant interruptions for crew training, and work on the job site is disorganized and confusing for new and experienced workers alike.
In such an environment, staff defections often begin to accelerate. For lack of adequate staff, you either have to turn away jobs or send too few crew to complete a job, ultimately risking burnout and injury.
There is no reason to have to fight a constant battle, training new staff and trying to retain existing staff when you don’t have to. Think outside the traditional box of tent installation procedures. The answer isn’t spending more time recruiting talent, but rather to implement technologies that reduce the man hours on a job and substantially reduce the pure physicality of the job. This is what ultimately gives crew members an incentive to show up for the next assignment.
Automated tent installation systems, like those made specifically for tent professionals by Tent OX to mechanize traditional manual labor work, provide a big lever for improved staff retention.
As of the writing date, the West Coast and Florida sites of Classic have had no change in operation. While some markets will be covered by two companies that have taken over a few of the former Classic’s locations, the rest of the market for the big jobs the company once dominated has been thrown wide open to the industry’s remaining big players and enterprising mid-size companies who want to vie for some of the big jobs Classic once “owned.”
Classic’s collapse may also provide an equipment windfall, allowing many companies to buy into Classic’s large tent inventories or structure at cents on the dollar. A caveat here: Classic appears to have stopped refreshing its inventory some time ago, so premium-condition purchases may be hard to come by.
*For additional information on the sale of rental items, contact Jody Bacque with Hilco Industrial at email@example.com or 251-404-2367.
Below is a snapshot of the Classic Party Rental inventory as shown on July 14 on Hilco Industrial’s website.