After a lengthy lockdown period, public events and gatherings are back with us. Just in time too as both the summer and the festive are well on their way. We can and should expect a lot of events to come up and nothing goes with events like food. Those in the food and catering business may look to hire equipment for their or clients events and that presents a very good opportunity for a person who wants to get into the catering equipment hire business. Let’s look at some of the important things to keep in mind for this business idea if you want to make a success of it.
Outsourcing is a viable concept in business today. Many businesses can outsource departments, services or assets. The equipment hire business comes in here. Some people are eager to get into the catering business but may not have the resources to invest in all the equipment they need. That’s a great business opportunity for those who have the resources to buy this equipment to then hire out the equipment to those who don’t have it. So we are looking at a business to business (B2B) operation though sometimes it may have a business to customer (B2C) or Business to Business to Customer (B2B2C) element which I will explain shortly.
Business to Business
This is something you will experience in the hire of equipment such as bain-maries, large pots and platters. A business or person that is in the business of catering will hirer the equipment. Your business relationship is with them and not the person(s) they are preparing the food for. The relationship is straightforward.
Business to Customer / Business to Business to Customer
This is something you are likely to experience in the hire of things such as plates, dishes, glassware and cutlery. In this case, you may directly enter into an arrangement with the person(s) who are being catered to (B2C) or with the event caterer on behalf of the person(s) behind the event (B2B2C). This distinction should be made clear because you may have to lower prices in the B2B2C scenario and consider the complexity of the contract when it comes to the security of items and deposits.
So what you hire out is equipment and it stands to reason that you will have to put a little thought into your equipment. Get the right items and you will have the opportunity for both high demand and premium pricing. If you get the wrong stuff you will have the opportunity to gather dust. So there are some things to be mindful of when buying your inventory.
Consider all budgets
Premium stuff is great but not always the order of the day. You will many times come across customers who are happy with the most basic options and you should consider this.
Designs play a major part in what customers feel about your inventory. When you are dealing with dinnerware, glassware and cutlery the market is centred around trends and looks. Figuring out what is trendy and therefore in demand will go a long way. However when you are dealing with things like bain-maries and pots your concern in this regard is more on functionality.
In the hire business, you make money based on how many times you hire out items. The more times you can hire out an item the more likely you are to recover its initial cost and replace it while making a healthy profit. So the cheaper stuff may seem appealing as low hanging fruit but in the long run (and sometimes not-so-long run) you will find durability is a greater concern.
Avoid idle inventory
Another big problem in any business is idle inventory. Going for quantity is not such a good idea at the start. Idle inventory ties up money and as you will see later the business still has many cash flow considerations that need your consideration.
Finally when it comes to buying equipment enter with ease. It is cheaper and easier to buy more equipment later than to get rid of excess unwanted equipment. So let the market inform you of its needs.
Your equipment will be the goose that lays the golden eggs and you will need to take care of it. The following are key things you want to make sure of.
Storage -well organised
You may not have much choice when it comes to storage space but the containers used will be important. You want secure storage that is dustproof and stackable.
Washing and hygiene
One of the big things to think about is the washing and hygiene around the equipment. You will need to make sure you wash well and meet the requirements of health and safety.
Where’s the Money?
Of course, it’s all about the money and you may be wondering where the money is made. It is simply made on the hire of the equipment but you must consider and include delivery fees (though optional), setup fees (again optional) and washing fees. It is customary in the hire business to take security deposits to cover possible damage or non-return. Remember to charge appropriately and hold this money in trust, it is not income but rather a contingent liability.
Remember that the business is seasonal, you will naturally have much more going on towards the end of the year than in the middle of it. Also, consider the value of creating partnerships with event organisers as this gives you easier access to customers.