Hardware Retailing

DEC 2017

Hardware Retailing magazine is the pre-eminent how-to management magazine for small business owners and managers in the home improvement retailing industry.

Issue link: http://hardwareretailing.epubxp.com/i/904225

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Page 58 of 70

HARDWARE RETAILING | December 2017 54 Establish Your Market Potential customers are everywhere. Families have birthday parties, weddings and graduation celebrations. A local church may want a tent for its annual picnic. The nearby community college may need a few extra tables and chairs for a fundraiser. Use your entrepreneurial skills to uncover opportunities. "The party rental market has grown over the past 10 to 15 years," Shipp says. While homeowners may have always been a solid market for party rentals, business-to-business opportunities are growing as more and more companies choose to rent rather than own their supplies. "A lot of companies across different industries are finding it is far less expensive to rent items for special events. They don't have to clean and store all that equipment," he says. As you look for potential customers, understand your limits. Identify a target market rather than trying to serve everyone. Fitzgerald, for example, has established his business as a destination for backyard parties. "We do a lot of backyard birthday parties, graduation parties, backyard weddings and barn weddings," he says. "We usually refer larger events to someone else because we've found that we can't provide the products and labor needed for those larger orders while maintaining our profit and quality standards. It's important to identify exactly who you want to be, and then listen carefully to that customer base as you're starting out." Start Small As with any category, start small and build your special event rental selection as you learn the types of products your customers want. Ask yourself three questions, says Shipp. First, what are the opportunities in the market? While any size of market holds potential, rental can be strong for retailers in rural areas, as there may be fewer competitors but still a high demand. Second, Shipp says retailers should consider their storage space commitment. Third, retailers should consider their labor commitment. Are you willing to dedicate a full-time person to the category? These questions will guide you in setting up your ideal rental category. A good starter assortment might include tables and chairs. If that goes well, add a tent. As your department grows, you can add ancillary items to improve your selection, but the core products will make you money. "You'll likely find that 20 percent of your inventory does 80 percent of your rental," Shipp says. Rental is a category that should pay for itself quickly. "Your return on investment may be better than you initially think. For most items, you can recoup your expenses within 10 times of that item being rented," he says. "After that, it's all profit." Hire Seasonal Help As your special event rental category expands, you may discover peak seasons when you need to hire temporary staff. Or you may want to find part-time workers willing to work evening and weekend hours, which are often required in this department. Both Kempker and Fitzgerald agree: Staffing is the largest learning curve in special event rental and can make or break your success there. The average backyard party, for example, might require a tent, tables and chairs. Employees not only need to be in good physical shape to handle delivery and setup for multiple customers in a day, but they must also be professional, as they are still representing your business. "Your reputation is on the line," Kempker says. "Your employees have your name on their backs." In addition to dealing with customers who are anxious about the success of their event, employees must ensure the event setup is professional. Fitzgerald finds college students home for the summer are the perfect fit for hiring during the busy summer season. During that time, he might have two crews each making seven to 10 deliveries or pickups per day. Owners Chuck and Dawn Kempker have been building up their party rental inventory for two decades in response to customer demand.

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