Epic Rental House Business Plan

[Stefan Antonescu]

You should post this on the "Ask David Mullen ANYTHING" Thread I'm sure he worked really hard to acquire the skills and knowledge he seems to be giving away for free. I really don't think there would be a reduser without people asking questions and getting answers about red equipment. Or maybe it was the phrasing of the question that came across threatening, should he have just asked what the best full meal deal package for epic was. leaving out the whole rental business thing all together I'm sure that would have garnerd a more diplomatic response.

+ 1,000,000

The more you give, the more you receive...

 

[Scott Crawley]

It's not easy to make money in the rental game, especially in today's world.

There's note of caution from one who knows.

In the city where I last worked and rented for a long time there was a newer guy who threw his hat into a crowded rental market. He had cash from another successful business, and supplied his house fairly well with plenty of well used gear as well as a few complete newer kits. He staffed the place with some young people, few of whom were moderately proficient technicians, and fewer still were reliable.

He priced his kits aggressively, and gained some traffic. The savings in the cost of a rental almost made up for the lack of service. On a really tight shoot a capable and thorough crew could make it work, and we did that on a couple occasions. When I returned to my preferred rental house it was always like Christmas... To have gear that I knew would have had good solid maintenance and QA when it was pulled, and very complete kits... It was often the smallest things that they included in the kits that I was happiest to have, like a full box of connectors and adaptors.

Capable and reliable staff are the biggest thing. Don't skimp there.

Did I mention that this guy was out of business in a year or two?

 

[Stefan Antonescu]

Another option, of course, is to consider simply buying a tricked out Epic and leaving it at a major rental house with some sort of split arrangement. This would be a way to try the business before going full-bore.
Cheers,
Harry

Very interesting...

And thanks for the really nice post Harry.

 

[Jeff Coatney]

You should have four complete kits. If you're serious, get some primes. The Red Primes are awesome but people are funny about glass- they'll want Cooke's or Master Primes and they'll balk at what they cost. Honestly, its not a great business model. Your overhead will eat away at your gains pre-emptively, the margins are lousy unless you go all-in and squeeze out some of the bigger fish in the market. I'd seriously think about it before you do it. There will be many players out there in short order-- some will savagely undercut everyone because they will panic and feel they need to out of the gate. Music Videos will demand most-favored-nations pricing and then destroy your gear and send you to the mad house chasing down loss & damage claims. For all its textbook appeal, being a rental house is both overhead and administratively heavy, requires bullet-proof legal and insurance support and returns narrow margins on large capital purchases. If you can float your inventory through leasing, you might do okay, but you will still have to service and maintain the gear. Good luck! Any legacy rental houses in your neck of the woods looking for a savvy partner and a capital infusion? That might be a better route. You get a win-win and benefit from an established player's rolodex and you get to skip the crawling phase and go right to walking.

 

[Harry Clark]

And depending on the item (Epic, 24-290, etc.) many rental houses are happy to take on owner/operators' gear, as it lets them beef up their inventory without any upfront cost, and to easily thin that inventory as items fall out of favor. That's a also win for the independent owner/operator or AC looking for a little extra income.
The problem with building a rental business from scratch is that you will lack a lot of "depth", especially older gear, as well as variety. Most successful rental houses have been around for a couple of decades or more, and always have lots of interesting bits and pieces from days gone by. That stuff sits on the shelf a lot, but is great to have access to, and also items go in and out of fashion.
Anyway, it's an expensive, complex, and challenging business. If I had the kind of money it would take to start a rental business the way I'd want it to be, I'd likely just retire and enjoy my children and my shooting career...
Cheers,
Harry

 

[Harry Clark]

Great post, Jeff. I was typing my last reply when you put it up. I agree with everything you have said.
And listen to Erich and the folks from F/VESCO. They speak from experience.
Cheers,
Harry

 

[isaac williams]

Thanks for standing up for me. I wanted to be honest though in my question. I wanted to know what people wanted because even though I do intend customer service and gear maintenance to be highest priorities that's simple business stuff that anybody who knows business would know. I've asked a lot of people what they would want and I'm building s list of derided products that I can offer. I know that a lot of the people here are the types of customers I will likely have one day... People who need a second kit for a project, or don't have a particular piece and want to rent one for a few day.... I may only be 22 but I have every intention of having at least 2 full epic rigs and gear from other manufacturers and a few customers by years end. I have business experience and this is only one small part of my research....

I don't know, from how nice some of the guys are here I was stupid to assume that would be how everybody was....

Your welcome. It look as though you got most of your questions answered. Majority of the guys on the forum a pretty nice for the most part, and can be very helpful. On the other hand every now and then there are guys willing to take from the forum but not give back. But we have all been where you are, and in a sense we still are. With the advent of all this new equipment comes a responsibility to share information with a our fellow man. I mean we all heard of red from some one

 

[George Butterfield]

For someone to come in to a forum and expect to basically be told what they need to do in order to make money feels anti-thetical to the notion of having to work to attain knowledge, money or power.

So, pardon me for not wanting to be crowdsourced for my hard-learned knowledge.

Gee, ever read a book? The Human Race advances because people freely transfer their knowledge to the next generation. There are lots of books on how to play golf etc, but you still have to put in your time. Maybe this guy can tell you something you don't know. Ever ask directions? Before GPS?

 

[Dan Kanes]

I don't think the people responding to my post in a negative way really even dignify a response from me, however:

Those who know me are aware that I am generally very open and helpful with my knowledge when it comes to craft, technique or particular helpful tips and tricks.

However, this is _not_ that type of question.

It's like going up to a cow and saying: Hey, I know there is milk in there somewhere - I was wondering if you could maybe give me some pointers on how to squeeze it out of you? Also, maybe there is a chocolate or strawberry flavoring - I'm not really sure which, but I hear people will drink more of it. Maybe you could tell me.

The title of the thread is "business plan" so, you know maybe it has little to nothing to do with the craft or technology but instead the use of "social media" and "crowdsourcing" - you know, what they they teach in business school these days, and in my opinion can be just as dangerous to our economy and society as they initially seem beneficial.

So, what was initially a lighthearted joke has been perceived as deep hostility, and of course
Many people have a binary reaction to an analog joke in a digital medium.

I'm okay with that.

Like I said, best of luck with your business plan,
And see you in the artistic and technical part of the forum!

Oh and one more parable:
Shopping Cart Before the Horse anyone?

 

[Harry Clark]

Dan,
I enjoyed your original reply. I didn't think there was anything wrong with voicing your opinion, and certainly I saw humor in it!
I think the OP may be seeking some generalized ideas about what it takes to run a rental house, and I think for pros like you and I it's no skin off our noses to share (or not) as we like.
Getting a checklist of "how to create a rental house" is much easier than actually doing it.
After thinking about it, another piece of advice one might give the OP is to perhaps work at a big rental house for a couple of years and really get to know that business... but I wonder how many folks would want to touch it with a ten-foot pole afterwards.
Cheers,
Harry

 

[Max Fischer]

Don't forget about the little stuff that adds up:
Figure $15K for filters (gotta have P-size and 6x6).
25/75 head for sure, and probably a smaller head as well for doc work. Add sticks and there goes $20K
P-size clip-on MB, P-size studio MB, MB-14 6x6. Another $10K
Collimator $2-3K
Zoom control, wireless FF, studio FF, HH FF. $20K
Backups for everything $???
Monitors $10K
Insurance $10K/year

Then you can start thinking about the important stuff like lenses. Short and long zoom, Zeiss or Cooke primes, wide angle, telephoto...

It adds up to $400K pretty quick, no joke. If you go with the cheap stuff, then you have what all the owner/operators already have. You need the good stuff or your not a valuable resource.

 

[Scott Schneider]

Take Max's numbers and times them by x10, x20, x30, even x50. We have $500k in filters alone.

 

[Harry Clark]

And realize that gear changes and evolves more quickly now then it did 10 or 20 years ago.
So whatever shiny new cameras and lenses you buy, consider that three years from now they will be run of the mill (or unwanted in the case of older electronic cameras)
It's kind of ironic, isn't it? 15 years ago the bar was set pretty high: hundreds of thousands of dollars in film cameras, but that was a pretty high wall that competitors could not scale, and the cameras did not change dramatically for years, giving you plenty of opportunity to ROI.
Now, it's a free for all, with everyone and his brother running "rental houses", driving prices downward, even as the market stratifies AND the gear needs to be ROI more quickly.
Interesting times...
Cheers,
Harry

 

[Max Fischer]

Take Max's numbers and times them by x10, x20, x30, even x50. We have $500k in filters alone.

Absolutely. That was for just one camera poackage.

 

[Louis Maddalena]

The title of the thread is "business plan" so, you know maybe it has little to nothing to do with the craft or technology but instead the use of "social media" and "crowdsourcing" - you know, what they they teach in business school these days, and in my opinion can be just as dangerous to our economy and society as they initially seem beneficial.

I'm not very good with words (I do have some problems when it comes to language, and communication and stuff like that, but lucky I make up for it when it comes to knowledge of how cameras work and other electronics... some say I'm autistic, but I'm not quite sure) but because of this lack of ability with words, I probably put some kind of stupid title as the title, and one of the mods I believe changed it because I did not make that title.

When it comes to all the gear I was going to need I definately though it would be quite a bit, I knew it would be more than 100k and I was cool with that. But now that I know I'll have to spend 500k on filters alone in order to be able to compete with I'm a little bit nervous in what I have started to tackle. Although, I feel like its a little bit too late now so I shall plow ahead. I already have some clients who I have rented to and they were beyond happy with the quality of the gear and service that I have supplied them. I know all the gear I own or have used very well and if I don't know the problem I can always figure it out quite quickly and they were happy with that. I will now branch out into purchasing more gear that many of you have suggested and we'll see where it goes I thank you all for your input and I look forward to where I'll take this adventure.. If I didn't already have a good amount of gear and some contacts, baed on this thread I'd likely quit but I'm determined to do well in life and and that means try my hand at all things and since I'm young and I have gear and a passion for this industry I figured I'd start here.

Thanks to all who were of help and I'll be more than willing to share any of my expertise with any of you when you have a question that I know the answer to.

 

[John Chater]

Hey Louis
If your ready, go for it. Figure out a basic need in your area and convince people they need your equipment and services. The key is you. Anyone can buy equipment. Harry and Erich are big talents and are all in 200%. I deeply admire Dean at FVESCO, he had real vision with his company. Sorry he is moving on.
All rental company owners start small with a suspicion that it will be hard, but it didnt stop them.
Its only in hindsight its scares the crap out of you the thought of starting over again when you look at the sums of money involved. Not sure I would but then again Im not sure what else I could be doing.
There is always room for new and innovative business. Good thing is if you are not up to the task you will be out nursing a minor loss in the 5 digits. You will be well into 7 digits before you have enough gear to be respected as a rental house.
I wish you well. Harry watch your back he is in NJ !

Best
John

Chater Camera Inc
San Francisco

 

[Harry Clark]

Ha!
That's right... didn't notice that.
Hey Louis, wanna buy some gear?
(this could be my way out of the business!)

Cheers,
Harry

 

[Elmer Tenkink]

Just an idea..

It might be interesting not only to rent out gear, as there are a lot of rental houses.
But also workflow package's with tight integrated solutions, that bridge between on set and post workflows.

For example: From an on set DIT station transferring the data to Avid Unity (or something else)
and directly tape archiving, trans-coding and sending it back as daily's on set.
While the post-houses already could start to review the footage.

There is a ton of expensive gear in that area that people love to rent, and a lot of expertise to be hired.

 

[Joel Kaye]

But now that I know I'll have to spend 500k on filters alone in order to be able to compete with I'm a little bit nervous in what I have started to tackle. Although, I feel like its a little bit too late now so I shall plow ahead.

You might want to read that back to yourself a few times. It's too late? EPIC isn't even out yet.

I think going into the movie rental biz with all the stuff required is probably crazy.

What you could do is buy an EPIC and a kit of Canon glass and rent it to SLR shooters that want to bump up to EPIC for a project.

Obviously you'd have to be the cheapest game in town - but given that EPIC will shoot ISO 1600 I'm sure a lot of good stuff is going to be shot on it with very little lighting kit and other rig. I already do pretty well guerrilla style with RED. EPIC will be far better suited to that style though.

You're never going to compete with established rental houses that can package lights and lenses etc. with their EPICs to create really good deals for movie productions without spending a fortune.

Perhaps an EPIC/Canon/RedRocket combo would be something smaller guys would want.

 

[Louis Maddalena]

You might want to read that back to yourself a few times. It's too late? EPIC isn't even out yet.

I think going into the movie rental biz with all the stuff required is probably crazy.

What you could do is buy an EPIC and a kit of Canon glass and rent it to SLR shooters that want to bump up to EPIC for a project.

Obviously you'd have to be the cheapest game in town - but given that EPIC will shoot ISO 1600 I'm sure a lot of good stuff is going to be shot on it with very little lighting kit and other rig. I already do pretty well guerrilla style with RED. EPIC will be far better suited to that style though.

You're never going to compete with established rental houses that can package lights and lenses etc. with their EPICs to create really good deals for movie productions without spending a fortune.

Perhaps an EPIC/Canon/RedRocket combo would be something smaller guys would want.

I wrote a long reply to this before the internet where I am decided to go on the fritz for a little bit... but I do think these are great ideas and you raise some great points that the camera although cheap compared to the competition and what it offers, its too expensive so that everybody who wants to use the camera to buy it, so there will likely be a market for some of the smaller fish to rent from a smaller firm to with smaller gear but still gear that not everybody can afford, and build from there.