How much should I charge for hire of our rig?

[TonyMitchell]

So rates haven't gone up in over 15 years since I got out of sound? Crazy.

 

If anything Brian rates have come down - I did a quote today for a fairly large PA and lighting, 3 man team to install, 18 hour day, 3 tonnes of kit and the customer laughed at the £1500 hire charge plus labour - they came back and said "£800 is our budget and we have sound a firm to do it for this" (Including VAT I found out later) Audio is dead - especially when folk buy kit, and do not expect to recoup the investment..... ever, instead happy to work for a fairly low daily rate.

 

This happens all too regularly, Paul. Leaving weekend warriors with speakers on sticks out of the equation for a moment, don't underestimate the growing army of DIY speaker builders, who started out playing repetitive beats to kids on ketamine in the woods, that now think they are a production company and manage to convince some buyers that they are!

[Stuart91]

The "problem" is that the barriers to entry have come down. Anyone with a credit card with a few thousand pounds available can start a "PA company". Even 15yrs ago, kit was significantly more expensive and needed a lot more care and attention. My own career got off to an unillustrious start with an assortment of blown drivers. Modern kit (at least in the price bracket we're considering) is generally much more capable and much more forgiving of abuse.

[Bobbsy]

I was once taught by a vastly overpaid management consultant that the basis for gear hire should be 1% of the capital cost per day, seven days for the price of five.

 

From this base point you can massage the figure at bit--increase it for gear that has a shorter than normal service life, reduce the rate if there's heavy competition. I know this is pretty general but it did seem to work out about right as a way to cover capital and maintenance costs on gear we could write down over five years--and make a profit of course.

[ImagineerTom]

Market saturation / drought is way more of an impact on sound equipment price over here now than the "value" of kit (whether accounting or theoretical) - 2 weeks before christmas (ie peak time) I paid as much to rent 8 radio mic's in a relatively "un-saturated" part of the country as I'd paid in September to rent a complete PA rig for 3000 people in an over-saturated part of the country - and the company I chose then wasn't the cheapest quote we'd received. Whilst proper lighting and staging equipment hire have stuck to fairly consistant prices/price formulae so that I can be just about anywhere in the country and take a reasonable guestimate at equipment costs it's very noticable that there's no real formulae to audio pricing and that you can pay anything from £350 to £2000 for (effectively) the same service with the only differential being just how desperate the hire company is for work.

 

There's a similar situation emerging within the "mobile stage" industry...

[Derek Tallent]

I was once taught by a vastly overpaid management consultant that the basis for gear hire should be 1% of the capital cost per day, seven days for the price of five.

 

From this base point you can massage the figure at bit--increase it for gear that has a shorter than normal service life, reduce the rate if there's heavy competition. I know this is pretty general but it did seem to work out about right as a way to cover capital and maintenance costs on gear we could write down over five years--and make a profit of course.

The major problem with writing down over five years is that the shelf-life of equipment these days is far less than that....

[S&L]

the 1% figure suprises me but it does depend on kit size and hire period. if I may use an example from my construction industry day job,

small plant is generally charged out at 5% - i.e. it pays for its capital cost in 20 weeks.

that's broadly true of small kit in sound - an SM58 will cost you £3 to £5 to hire for a week/weekend and 20 times that to buy.

 

in construction if that kit is unusual the client or the project estimate is happy to pick up the cost - want an 8" hole cut through concrete on site - the cost of of hiring in a diamond drill (or drill sub contractor and rig) is something a contractor can happily add to his estimate or show to his client as a seperate cost.

 

however every client would expect the contractor to have an office, a van, a set of tools, including hand drills, transformers etc and for that cost to be absorbed into his hoursly rate not charged on top. want a guy to provide a days labour with his van and tools but without materials - that will be £24 to £27 per hour (for electrician or heating engineer) but in the first instance the guy has to buy and operate his van and tools out of his hourly rate - the initial outlay is his 'buy in' to being in business. it is hoped that upto 50% of his hourly rate covers such overheads as well as tax, etc.

 

the market at the bottom end of PA appears to be now similar, a sound engineer is expected to carry his own van, set of mics, cables and stands, lights and PAs capable of covering everything up to around 4.5kW with 4 monitors or so. In return for which he and his TEAM get a total of £150 an hour for probably a 10 to 12 hour day - yeah there is a lot more money in plumbing than in sound (separate discussion for another day).

the point being is that the customer at this level places no added value on the routine kit at all but considers it part of the engineers hand tools.

the routine PA kit is the sound engineer's 'buy in' to the trade - it never comes back to his pocket.

I'm not saying this is right - I'm just saying this is the reality of the market place and that's driven by the overall fee paid for a night's entertainment by a small theatre or large bar.

[bruce]

1% of the capital cost per day, seven days for the price of five.

 

 

the 1% figure suprises me .....

small plant is generally charged out at 5% - i.e. it pays for its capital cost in 20 weeks.

that's broadly true of small kit in sound - an SM58 will cost you £3 to £5 to hire for a week/weekend and 20 times that to buy.

 

So Bob says 1% per day, or 5% per week is typical.... and S&L then says he finds that surprising, as he thought the rate would be closer to 5% per week.

 

Confused.

[dbuckley]

Confused.

 

I think its just a simple misreading, rather than a deliberate plot to overthrow sanity.

 

The "twenty week rate" has always been pretty standard, leastways as far back as my experience goes. For tough stuff like conventionals, it works very well, and there will be people who bought 743s new when I started out that have made a decent return on these lamps for decades. On the other hand, intercomms are charged at a much higher rate than twenty weeks, presumably because they have a hard life and thus require maintenance and parts replacement.

 

But ultimately, its down to what the market will bear.

[S&L]

yeah my apologies I misread - so we end up with the same figure - or at least a figure that applies when the market doesn't have different ideas.

[Bobbsy]

In fact that over paid consultant went on to say "1% of capital value per day, 7 days for 5 days rate and one month for 3 weeks rate".

 

As I said, this was just a base line and needed adjustment based on things like the competition, the fragility of the equipment, the need for consumables, how much work was needed between rentals, etc.

 

On another topic...if anyone wants to be serious about a hire business then buying gear with a service life of less than five years could be a false economy. If you want to work with cheap stuff at the bottom end of the market then your rates need to be adjusted to give you payback, replacement costs and a profit over whatever you DO take the service life to be. I'd expect to pay a far higher percentage of the capital cost for a Behringer or Phonic analogue mixer than I would for a good Soundcraft.