When you start up a marquee hire business you have to do some local research for pricing – what’s everyone else charging for a marquee? Make sure you’re competitive (start ups will often just make sure they’re the cheapest to ensure they’re busy).
Once you’ve been going for a year or two what should you do with your prices? Put them up? Well hang on a minute, here’s a couple of stories to illustrate why you need to think carefully first.
A very good family friend (sadly no longer with us) semi-retired a few years ago. He kept on 3 customers for his maintenance business as he’d worked out he’d be financially comfortable working 3 days a week.
Unfortunately after a year one of his customers no longer needed him. His reaction? To go to his other 2 customers and put his prices up 50% to make up for it!
You can see his thinking, he needed a certain amount to live so needed to get it from 2 customers instead of 3. Unfortunately he didn’t take the views of his customers in to account and he promptly lost them.
Dorking parking charges
For those who haven’t visited us we’re based in commercial property on the outskirts of Dorking. Unfortunately Dorking town centre has the feel of a struggling town with lots of shops empty and many of the occupied ones looking to get out of their contracts.
Obviously this has a knock on effect to the local council who have found the revenue reduced. Their response?
Put up parking charges!
Honestly, you wonder the intelligence of these idiots.
So as a marquee hire company what can you learn from this? My advice is to respond to your customer demand.
If you’re turning away work all year and don’t have any quiet time (first off well done!) then by all means put your prices up. Don’t be excessive, more than a 5% annual increase might upset repeat customers.
If you’re busy some of the time but quiet on others, think of having special offers – 10% off for all August bookings for example.
The main advice I would give is if you’re not getting the returns you were hoping for, if you’re not as busy with bookings as you’d hoped, consider actually lowering prices or having several special offers to increase business rather than increasing your prices and thinking you’ll increase turnover & profit. It doesn’t always work.
Thanks for reading.