Depending on how long you have been in the event industry this may not be your “first rodeo” when it comes to economic disasters that have affected day-to-day operations in the event industry. 9/11/2001, Sub-Prime housing bubble economic recession and now the Coronavirus Pandemic of 2020 have all adversely affected the United States (and world’s) economy with a trickle-down effect to the event industry. Unlike the other events aforementioned, the Coronavirus Pandemic is causing mass cancellations of public gatherings that are directly affecting each of us in the event industry through cancellations of events and more importantly the need to keep our employees healthy and safe when dealing with the public.
Over the past week, I have corresponded and spoke to several of my friends and colleagues in the event industry as well as taken part in social media discussions concerning the extreme hardships being felt by all the cancellations of events due to COVID-19. What I have deduced is that the range of emotions exhibited from our industry members is one of complete denial to hoarding toilet paper and hand sanitizer. While this blog is only my opinion it is based on conversations I have had with others in our industry who have been in it much longer than I and quite frankly are much smarter. Based on this premise I wish to recommend the following:
- Cutting labor through “lay-offs” is the first thing we think to do when revenue becomes scarce. While this is a fast, short-term solution to diminishing revenues it should be looked at as only one tool available in your tool chest and should be done with great care and forethought. Remember, our employees are our most valuable resource and they have families counting on them to put food on the table. We owe it to those that have made us successful every option available to help them keep employed. Before making any employee cuts you should first make a “order of merit”. Things to consider are:
- Who can you count on in the busy times? Who shows up when they have already worked 60+-hours in the rain and you need them for another 10-hour install? Conversely who is the one you really can’t count on and is a chore to get to work 40-hours much less longer.
- Who are the employees that you wouldn’t care if they quit or even if you wish the employee would quit? Conversely, who are the employees that would hurt the organization if you lost them?
- Which employees bring the most to the table in turning around the company? Certainly, you want to keep your best salesperson(s) and those employee(s) that have relationships with your key customers that can put forward a sense of stability. The last thing you want is for your key customers to see that your company is unstable and cutting its employees! This could be looked upon as s sense of weakness and scare them to your competition which may seem “more stable”.
- Who are the employees that will do ANYTHING? We all have those employees who only want to do what they were hired to do and are not interested in working in other areas. We had several key tent installers we tried to move to the warehouse during the slow season and they refused to work in the warehouse or would display a bad attitude while doing so.
- Whatever else you feel is important to consider should be considered in this list.
- Once you have made the order of merit list from “best to worst” put their weekly salary next to their name. Based on your labor budget draw a red line where you cannot afford to keep anyone below said line.
- Other Sources of Revenue should be explored by (and I hate this cliché) “thinking outside of the box”.
- I saw a post on an event social media group where an operator was providing manpower and trucks to help a local moving company with the sudden influx of movement of students from their college dorms they were being forced to vacate due to the closing of universities. There are tens or even hundreds of other examples where manpower can be leveraged to generate a small amount of revenue and keeping key employees paid. Putting an ad on local social media/craigslist offering house painting, parking lot striping (you can rent these machines), landscaping, labor for disinfecting public spaces, calling restaurants and setting up contracts to deliver food, etc. ANYTHING (legal) should be considered as long as it generates enough revenue to pay your employee(s) (and maybe a little extra for the rent).
- Now maybe the time to clean the warehouse of equipment that hasn’t rented or is past its useful life and hold a “garage sale”. Have your employees clean it up and “put some lipstick on it” to make it more salable. This will not only free up warehouse space it will also generate some much-needed cash.
- Drive thru virus testing sites. Immediately call your local (and beyond) hospitals as well as your state and local public health departments and let them know that you have availability to supply tents, tables and chairs for these sites.
- Increase marketing for small backyard gatherings – maybe package pricing for small tent and table rentals.
- Refunds. The hardest thing to do when cash is tight is to give refunds for canceled events. I am bothered by some of the social media posts I’ve seen where operators are stating their “need for every penny” and will not give refunds for canceled events due to COVID-19. While this breaks every rule of decency (to include the big one: The Golden Rule – “do unto others as you would have them do unto you”) it is just bad business and honestly (while I’m not a lawyer) I think you would lose in a court of law as this pandemic falls under the auspice of “Force Majeure”. Most importantly, it is just bad business to not work with our customers during these uncertain times – do you really want to be the company pointed out on social media reviews that did not give a refund for an uncontrollable pandemic? I recently purchased some baseball tickets on Stub Hub (of course not good any longer) and I received an email giving me two choices: I can either get a cash refund OR a credit for future purchases of 120% of the amount I paid. Of course, I took the 120% as I don’t get that kind of return on any investment! What a great idea that each of you can use to keep from having to refund cash deposits and keep it for making it through these times all while keeping your customers happy! Bottom line is there’s an old saying: “Don’t win the battle and lose the war” – this certainly applies here.
- Cash is King! Keep spending to a minimum and keep your cash. Use manpower to paint chairs and fix tables and repair/clean tent tops that you were going to replace. Save the cash that was going to be used for new purchases and get a couple more seasons out of your equipment. Spend money on the equipment that will help prolong your existing equipment versus buying new. While I realize this may sound self-serving (and it probably is) a chair bag or tent bag is much cheaper to but than a new chair or tent!
- When things turn around be ready. I can count the number of times I turned down work on two fingers in my 12+ years of owning a tent company. WHEN (and there will be a when very soon) you get busy again take EVERY job you can get and NEVER turn down an opportunity for work regardless of how many hours your guys have worked (they can rest the next time a pandemic hits). If a customer calls you during the busy time and you turn him down and he uses your competitor (and he will) – don’t expect him to use you when times are tough….
Finally, I believe there is a “silver lining” to this terrible crisis from a business perspective. The weak companies (some small, some medium and some very large) will not make it through this. Those that do make it through this crisis will come out the other side much stronger with a greater market share than ever before. I would love to hear your thoughts on this blog. Please visit my Facebook group: Party Rental Town Hall and join the discussion. We can all learn from each other. See you on the other side! -Brian Jenkins (Owner Rental Innovationz)