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Thread: Economics of studio and gear rental - from the renters POV

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    Economics of studio and gear rental - from the renters POV

    Can anyone point me to somewhere I can learn of the economics of renting out equipment or studio space, what's involved, equipement turnover, repair costs, insurance, etc?

    I got an idea at the moment...
    I am not a painter, nor an artist. Therefore I can see straight, and that may be my undoing. - Alfred Stieglitz

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    Re: Economics of studio and gear rental - from the renters POV

    Ben,
    I think you need to "let your fingers do the walking" a bit, looking at the various offerings in each location you are thinking about utilizing facilities. Many studios rent by the hour/half day/day. Some provide a variety of options from computers, backgrounds, repainting, as well as a lot of lighting equipment. Some put together "packages" that cover a basic through elaborate set of options, but there is usually a price tag for rental on almost every piece of gear, including cords, stands, remote triggers, etc. Usually, many offer seamless paper background for purchase/use at more convenience and cost than hauling that sort of thing around yourself. Some also offer skilled techs to handle tethered shooting, or at least to get you a DVD with files burned for you to take away. Others are much more simple. Some allow you to bring your own gear, and even store it at their facilities for repeated used on your planned scheduled days.

    Basically, each studio sets its own policies and prices, keeps its own schedules, etc., so that is why I suggest calling around, visiting their Web sites, and visiting the facilities, if you can. It pays to establish a working relationship with them, as they will be able to help you out in a pinch. Also worth knowing what equipment they have for rental, as well as working with them to possibly get new items that you may wish to use. There is also the issue of having insurance. Some provide rental coverage, but most do no have liability insurance coverage, and you must provide evidence that you do.

    From a cost perspective, it can help if you can book a certain number of shoots per month or so, as many will start to give better deals on space and equipment rental costs. (They would rather have assured bookings with known customers than occasional walk-ins.) Others on this forum will have a lot more advice and ideas to consider also. If you are trying to do the math, think about the number of times you would estimate needing the space, and the kinds of equipment they offer. For some things, it can definitely be a more economical consideration for both a single or occasional use, rather than buying the gear and building your own space. For the most part, studio space can become a black hole for funds, unless it is used and paid for by jobs, so there is an incentive for many studios to fill up the calendar as much as possible.

    Sorry that I cannot offer more direction than this, but my personal experiences have been more limited, and quite diverse, ranging from smaller facilities where I brought my own gear, to larger facilities that were able to rent everything you could possibly need or want. The nice thing is that many do have qualified folks hanging around to help/offer assistance if needed, and some keep their gear in impeccable shape for use. Others may not provide that kind of support, nor offer the most up-to-date gear for use, so it pays to know with whom your are dealing and what they have. The time and costs can be charged directly to the client, or included in your charges to them, but that is also worth clearing with your clients also. If you are only needing space, and your impact is minimal, things can be much more affordable. If you need lots of gear also, the costs can go up quickly, but unless you are booking weekly, it still may be more affordable than buying much of the gear yourself. (Think about the costs of 3-4 Profoto packs, heads, stands, Chimera softboxes, background stands, etc.)

    Just offering some more ideas to start considering. Good luck.

    LJ

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    Re: Economics of studio and gear rental - from the renters POV

    Thanks LJ but I'm looking at it from the other side, opening a studio for rent and having gear on site to either include in the studio rental or for general rental.

    I'm looking at Jerusalem, a city with no gear retal facility whatsoever or any studio's (bigger than someone's spare bedroom) for rent. Friend and I thought it might be a good niche to exploit, starting small but gradually becoming big enough to go national. I can get the funding but am interested in how rental houses figure their economics, etc to give me an idea as to whether the idea is feasable and worth looking into.

    This is a unique situation in that there is nothing to compare to (all the big houses in Tel Aviv own their own studios/gear), nothing to compete with, it's literally starting from scratch, identifying a client base, targeting it and building up the concept of selling an until now unthought of concept. Hence I'm interested in what the base economics are.

    For example, I'm interested in knowing how long companies expect gear to last on a regular rental cycle before needing replacement. What the percentage of rentals to insurance claims are. How the companies deal with the digital upgrade cycle, etc. All these and more are non location or competition specific but pertain more to the basic economies of photographic equipment rental. Just wondering if anyone knew where I should be looking other than shmoozing with the managers of local rental shops here in the UK.
    Last edited by Ben Rubinstein; 20th January 2009 at 07:44.
    I am not a painter, nor an artist. Therefore I can see straight, and that may be my undoing. - Alfred Stieglitz

    Website: http://www.timelessjewishart.com

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    Re: Economics of studio and gear rental - from the renters POV

    Ben,
    O.K., now I understand what you are asking about. It was not clear to me at first.

    I think the suggestions still apply, but now you have to look at things as the studio owner, and think more about the demand side of things so that you can create the supply of space, gear and services to meet those hopefully growing demands. While the concept is a good one, I am sure you realize that there will be a significant shift in priorities, approaches and financial commitment. As to where to go to get the information, I still think it valuable to look at existing operations wherever, to get ideas of just how busy some places may/may not be. Also worth looking at the type of gear they are willing to offer, as well as support and other key issues. From there, it may be worth contacting some of the equipment folks to see what sort of terms they are dealing with, regarding usage, turnover experience, financial commitments, etc.

    One thing for pretty sure is that there will be a major financial commitment on your end, and you should plan for that for several years, not just a few months. By getting some idea of rental costs on gear from other places, you will have some idea of what the market is expecting, and may use that to help plan your amortization costs, etc. For example, if you plan to become a higher end operation, you will need more higher end gear, and may get to charge higher rentals to help recover those costs. Conversely, if you shoot to become a relatively less costly alternative for photographers, you may be able to recover costs with more rentals, but you may also have to replace gear faster from use/abuse. The manufacturers can give you better ideas about warranty service support, as well as frequency of returns. You can keep things into different categories also....gear that stays in your studio only, and that that folks may take to their location shooting. Insurance coverage for replacement costs plus out of service can be broken down and applied to rental fees, but those will be determined by number/frequency of rentals, which you may not yet know, but is important to your best estimates in constructing your business plan. One way is to create an arrangement where you lease or lease/purchase gear from the manufacturers yourself, until you are able to better gauge use/rental.

    I still think it valuable to talk with the guys that are in this business wherever they may be. If they are not seeing you as a direct competitor, they may be willing to share some deeper information. You can always also consider different business arrangements with them, like cross promotions to help enlarge both operations. I think the key is still trying to estimate the rental demand, and you may want to start with a narrower initial plan, and grow from there. Something like studio settings for weddings and portraits. You have a pretty good idea of what may be needed to accommodate the various group sizes, backgrounds, lighting, etc., already, and can then calculate the kind and amount of equipment and time needed. If you create a white room with several light stands/heads/softboxes/packs that can be easily moved into place, it may be relatively easy to generate customer traffic. Same can be said for portrait shooting. Once you get beyond that, the equipment needs and space can grow rapidly, such as may be needed for large products (cars), needs for "props", painting/repainting walls and even floors, etc.

    From the equipment rental side, you will need access to enough gear to cover the demand. That may mean many light sets to accommodate those shooters all doing weddings those same weekends. It would be good to create some tried and true portable rigs that are easy to haul around, set-up and use. Again, you may start with a few sets, and grow into a larger collection of things. It will be good to know how many photogs are in your planned area, the kinds of shooting they do, and what you could offer to them that they might not have themselves to use to improve and grow both of your businesses.

    Sorry to ramble on, but there are so many things to consider, and I am not sure what your plans really encompass (scale, direction, etc.) If I were going to undertake this sort of thing myself, I know I would be talking to as many equipment folks as I could, asking photogs what they would like/need, thinking about location, building business plans for a step-wise growth, talking to insurance folks about coverage of gear/facilities, and also thinking about the target market and marketing efforts to get the entire thing off the ground. Have not even started to think about cameras/lenses that may be the most common/useful for folks to rent or use, and that could become as important a business.

    All of this has to be looked at as a business, and not really as photography anymore. While you can bring a lot to the party from your own experience, success will come from successfully marketing and supplying things at prices that attract and serve the target group. (I live in an are where there is a lot of sports activities, yet there are only on or two places where I could go to rent a sturdy, fast camera and big lens to shoot. Most photogs wind up buying their own gear to use. Same is true for wedding shooters here. On the other hand, there are a few very nice studios that rent space and have gear for photogs doing more specific shooting, like portraits, commercial products, even music videos. Stuff that most photogs would not have on their own, but could use several times per year/month.)

    LJ

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    Re: Economics of studio and gear rental - from the renters POV

    All valuable advice LJ. I'm not looking at this photographically, that's irrelevant. I'm looking at it more from the days when I managed a photo lab and learned how to run a business. Or indeed from the business side of running being self employed running a wedding business over the past decade or so starting from scratch.

    I'm trying to see if the idea is even in question...
    I am not a painter, nor an artist. Therefore I can see straight, and that may be my undoing. - Alfred Stieglitz

    Website: http://www.timelessjewishart.com

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    Re: Economics of studio and gear rental - from the renters POV

    Ben,
    Here is a link to a small, but fairly nice studio operation here in Houston, TX. Though not your location, you can get an idea of the scale of operation, floorplan, list of gear and pricing, and even get some idea of how they market themselves. I have no affiliation with them. Just passing on some information as an example of something you might be able to use in your planning:
    http://www.silverstreetstudio.com/index.html

    Here is another example, where the facilities are larger, but maybe less glamorous. These guys also run workshops and hold events to generate interest and business:
    http://houstonskylinestudio.com/site/

    And another modest facility with offerings to think about:
    http://www.customminds.com/index.html

    And finally, another small studio that caters more to simple lighting and props needs for the portrait photographer only:
    http://www.studio807.com/studio807.html

    Again, I have no affiliation with any of these folks, but am merely offering some examples from my local area that show some breath and depth of offerings, prices, etc., that you may find useful.

    LJ

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    Re: Economics of studio and gear rental - from the renters POV

    LJ, you're a good man, many thanks for your time.
    I am not a painter, nor an artist. Therefore I can see straight, and that may be my undoing. - Alfred Stieglitz

    Website: http://www.timelessjewishart.com

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    Re: Economics of studio and gear rental - from the renters POV

    Ben:

    A few months ago, there was a thread asking this same question in the medium format section. One or two of the Medium Format dealers provided some info in that thread in regards to the economics of being a rental house.

    Robert

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    Re: Economics of studio and gear rental - from the renters POV

    Ben, don't forget to factor in full insurance coverage, liability included.

    I've always been curious about rentals ... studio space and lighting usually is quite reasonable (but renting digital gear can get pricey pretty quickly.)

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    Re: Economics of studio and gear rental - from the renters POV

    Thanks all, I'm probably going to go into business with my friend shooting commercial work, I'm a better/more experienced photographer but he's far better than me at getting the clients, once we're running a studio anyway it would be a natural progression to rent out the space and from there to renting out equipment and a couple of DSLR's. See how it goes in small and then look into going bigger.

    Robert, I read that thread, the main problems seem to be the nature of that specific beast, MFDB's or at least that is how I'm reading it.

    Marc, I hadn't forgotten insurance, it's rather an unknown given that there isn't a regular rental market here for the insurance companies to have a model for. That's one of the reasons that I'm interested in finding out about what ratios of claims to rentals are, how the insurance companies price it, etc, etc.
    Last edited by Ben Rubinstein; 4th February 2009 at 00:44.
    I am not a painter, nor an artist. Therefore I can see straight, and that may be my undoing. - Alfred Stieglitz

    Website: http://www.timelessjewishart.com

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