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Knowing how to take on the ‘big jobs’ helps smaller companies stay in the game.
By Maura Keller
For many companies, handling large projects is the classic sticky wicket. If you handle the projects right, you will thrive. If not, they can make you fail—at least in earning “big client” referrals. And for many tent companies—particularly smaller players within the industry—landing and managing “big events” can be one of their biggest headaches. But with the right networking efforts and coordinated project management, you can get in on the big events, regardless of your company’s size.
Getting your foot in the door
The phone rings. On the other end is the event coordinator for a large corporation. She’s interested in hiring your company to handle their annual golf event—complete with a dozen tent structures, flooring and lighting. This could be the difference between a good or bad year for your company. While you may not have the inventory to meet the needs of this client, you know exactly how to get the job done.
For some small companies, knowing how to handle the big event comes easily; for others, it is more of a complicated process.
When handling the large projects, Kathy Schaefer, chief executive officer at Glawe Tent and Awning Co. in Fairborn, Ohio, tries not to limit the discussion to what her company does or doesn’t have. “I wouldn’t want to discourage the conversation by saying I don’t have the capability of doing something,” she says. “If possible, I steer the conversation in a direction of something I know I do have. I also know that if something is available in the industry, I can get it—it is the cost that is the ultimate guide.”
Mike Holland, vice president at Chattanooga Tent Co., Chattanooga, Tenn., advises smaller companies to thoroughly evaluate if they can handle taking on a large event in terms of resources available. “Although equipment may certainly be available, you also want to make sure you have the management resources to handle all of the facets of a large event.”
Subleasing equipment is not only a great way for smaller companies to get in on larger events, but it can also help pioneer something new or establish demand for it. “Subleasing allows you to offer the product, and get demand established before you actually buy it,” says Gary Stansberry with Hageman, Stansberry & Associates in Arlington, Texas. “It will also give you a sense if this is a viable rental product.”
As in any business transaction, cost is the name of the game when subleasing equipment from larger enterprises. Schaefer recently bid a job for which she needed to subcontract. “I priced my entire portion of the job—labor, materials, etc.—and then added in the rental cost from my subcontractor as well as transportation for my truck and crew to go get the equipment and return it to them after the event,” Schaefer says. “Then I decided what percent of profit I ideally wanted to make on this job given the inconvenience of subcontracting. There are times when the profit margin has to be less than ideal if this is a client that you want to be the sole supplier to. I have yet to find a reason to do a job at a loss just to get the job. I also had to weigh in what my crew’s time would be used for if I wasn’t doing this job.”
Holland advises companies to also thoroughly evaluate the reputation of the vendor from whom you are choosing to sublease. “If you don’t know them, jump in the car and go and see a job they’ve done,” Holland says. “Whether you are the ‘little guy’ or the ‘big guy,’ you are putting your name out there and even if they say yes on the phone, you don’t want someone who really can’t produce.”
Problems that surface
It should come as no surprise that subcontracting equipment from larger companies has its share of problems.
“In one case I was sent dirty and incomplete materials to do a job,” Schaefer says. “My client didn’t care whose [fault] it was or that I had good intentions. I had to make this right.” In this particular case it ended up costing Glawe Tent and Awning quite a bit of money to hire power washing on the spot and it also cost them the job, which they had been doing for years. “My own equipment was sent to another job and I chose to borrow the equipment for this job,” she says. “My lesson from this is that it is crucial to communicate with the company you are subcontracting from.”
George Smith, vice president of sales at Mahaffey Fabric Structures, Memphis, Tenn., also recommends that smaller enterprises make sure the companies from which they subcontract do not go directly to the customer in the future. “We are seeing more and more companies using noncompete contracts when subcontracting,” Smith says. “This helps you protect yourself from losing an ongoing client to a larger company.”
It is also imperative to have a good working relationship and lines of communication. “If you have a strong relationship, you know what to expect,” Stansberry says. “By establishing relationships, you know if these guys are more on the ‘Chevy’ or ‘Mercedes’ end and how they can help you with specific needs.”
Creating an extensive contract that clearly defines the role each entity will play in the equipment rental is imperative. “You need a firm understanding of what each company is going to do in terms of delivery, setup, cleaning and other labor involved,” Stansberry says.
Smith adds that you should thoroughly read through the final contract. “Don’t leave anything to chance and don’t assume anything,” he says. Be sure the contract includes the unique specifications required, cancellation fees and payment terms within the contract.
Companies of all sizes should make sure they have the proper level of liability insurance to cover larger events. “If you hire me to sublease the equipment and to put it up, then we are liable for that structure,” Holland says. “But if you sublease the equipment from me and install yourselves, you need to make sure your insurance will cover things if anything happens to the tent. Liability is a big consideration when you get into the bigger events.”
Network, network, network
Schaefer says that subcontracting is an essential part of being capable of doing any job as a small- to medium-sized business in a competitive market. “An integral part of me having the contacts available to rely on is belonging to a trade organization like IFAI (Industrial Fabrics Association International),” Schaefer says. “At the tent expo and tent conferences I interact with other business owners and suppliers and communicate with future partners. It really is a benefit to both of us since we are able to do a job and make a profit and they are able to use equipment that might otherwise sit unused in the warehouse.”
By connecting with other industry players, Rusty Paar and his team at AV Party Rentals in Newhall, Calif., have established a core group of companies with whom they prefer to work. “We weed out those we prefer to work with based on the quality of their products and their work,” he says. “There’s a certainly feeling of control that you need to have with each job, even those that include subleased equipment. Having control ensures you are providing the best equipment for your client and helping their event be a success.”