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Episode 27: Tailgate Talk - Subrenting, Labor Costs, and More
137 Plays1 month ago
In this episode Nate and Kyle talk about projects on the horizon, how they both go about quoting labor prices, and they talk about what to do with difficult customer interactions.
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Transcript
Introduction and Catch-up
00:00:01
Speaker
Well, I got up early, got a crew to leave, sitting up pulls and ropes, that's lie for me. From a wedding to a fair, from the fields with the town, the one you call when you need a 10 up or down.
00:00:14
Speaker
I'm a 10 rental man, I'm working all the way. We're back again with another episode of Under the Vinyl, a rental management media podcast. As always, I got my buddy Kyle here. Kyle, what's going on, man?
00:00:26
Speaker
Nothing, Nate. How you doing? I am ah currently staked out in my wife's office at the hospital while she is in surgery right now. And it is not easy to find a quiet spot in this place, but I'm here. So we're good. It looks like you're a little bit remote as well. What's going on with you?
00:00:44
Speaker
Yeah, I'm down in ah Hot Springs, Virginia, a town that no one has ever heard of because there's nothing here. Except for the Bougie Resort. Really?
00:00:55
Speaker
Yeah, I heard it because, ah you know, it was one of the jobs that you bid against me on, right?
Logistics Challenges and Successes
00:01:02
Speaker
Here we go. Should we go there? All right, go ahead. Go ahead. I love it.
00:01:07
Speaker
It's Friday, baby. I'm four shots of espresso deep. I'm ready to go. So, yeah, okay. I might have bid against you on the job, but I gave you some money. I had you do the floor for me.
00:01:19
Speaker
And for everybody that doesn't know, he didn't know he was actually bidding on it against me. So I'll give him that, but go ahead. What do you got going on? Tell us about it. ah We got a 25 meter by 25 meter garden tent, all glass up on the TF 2100, like four feet in the air.
00:01:38
Speaker
So it's a nice big it's a nice job. I can't complain. There's been some challenges this week, but we worked through them. Thank God I got good friends in high places that can get me the stuff I need quickly.
00:01:51
Speaker
And before Kyle throws me under the bus, I'll throw ourselves under the bus. Kyle had a few issues with the glass because we didn't send them back the correct parts from when we did a job and sub-renting some parts from him.
00:02:02
Speaker
So he's been kind of an ass here and there towards me getting the parts back to him. But it wasn't all my fault, but we did get it back to him. We did get it taken care of. It's just part of the sub-rental game. Everybody's screwed up.
00:02:14
Speaker
And I will say, The planner is geeking out over the fact that you have blue paint from that Titan's wedding on some of the glass pieces. She thinks that's the coolest thing. Yeah, we, uh, the, the problem with that is the, there was supposed to be no paint on that field at all whatsoever. So they tried to paint everything but the field. So, you know, I'm sure that there's some blue paint, even on our frame that has stuck to it because it was a thousand degrees on that field. But anyway,
00:02:45
Speaker
But the, uh, the job looked good. we've I've seen some, I've seen some good videos from the planner. It looks like she's really promoting it and and just, you know, getting it out there for y'all. Has there been any struggles? Yeah. I mean, the site isn't, uh, like ideal to get tractor trailers in. So that was the first big hurdle of the day, Monday morning. Uh, but luckily the guys I hired were really good drivers and they kind of, we put them in a golf cart and said, all right, figure out how you yourself in and out of here.
Importance of Direct Logistics Management
00:03:12
Speaker
And they kind of set up the route for every other driver.
00:03:14
Speaker
Um, And then we've been having to use those push around man lifts. We got four of them on site. We're lucky we have to work every day. I've had the Sunbelt tech here every single day this week, which is just a pain in the ass. But we got through pretty much done. They're hanging chandeliers right now. And that's all we got to do left.
00:03:34
Speaker
Yeah. and Well, I guess segue into the freight. So you said you hired the guys. Are you not using a broker? How are you guys doing that? So we stopped using brokers this year 90% of our loads.
00:03:48
Speaker
Um, I was lucky enough that a broker had hired this trucking company for me last year. And the guy did the, Hey, my number's right here on the truck door. And he's a localish guy to He's like an hour away. He's got eight trucks.
00:04:01
Speaker
So I just call him direct. It's a little cheaper, but not really. ah but he's, uh, if I tell him to be there at seven, he's sitting there at five 30 in the morning waiting for us.
00:04:11
Speaker
kind of trucking company, which is what I like because he understands the I need to be here at a certain time and ready to go. yeah
00:04:20
Speaker
And he has really nice looking trucks. i don't know if anyone saw my story.
00:04:26
Speaker
Kyle is a semi-geek as we all know. and I mean, they look good. They all look good. I will say that. but um and you had to So you brought everybody out so that you personally met all the drivers so you didn't have to worry about some random guy showing up at eight 30 when you really needed them at 1130 and air everybody kind of new schedule mapped it out.
00:04:46
Speaker
Yeah, exactly. So I, I, the owners, one of the drivers, I'd laid out the schedule of this is what time I want this truck and just have them keep rolling in like every 45 minutes. So he had it set up. They found a staging area down the road. And once one truck was half unloaded, he called the guy said, all right, start heading this way.
00:05:03
Speaker
So he's really been a great partner in making sure that everything works out efficiently and smoothly.
00:05:10
Speaker
Are you paying more of a premium for that or do you feel like it's pretty fair? It's fair. It's in line with what a broker would charge you.
00:05:19
Speaker
Okay. And I feel, I feel better cause he's getting all the money, you know? Yeah. 10, 15. Well, if the guy knows two days going to get reoccurring work and you guys got a good relationship, then I mean, that's solid. mean, it's like having an employee without having to full time pay him.
00:05:39
Speaker
Exactly.
Tent Rental Challenges and Projects
00:05:41
Speaker
Yeah, we kind of go through that a little bit, but it's like ah we did a big job. I had a ah job pop up kind of at the last minute right before vacation.
00:05:50
Speaker
And we had everything lined out, and we were in a foreign trade zone area, so everything had to be to schedule.
00:06:02
Speaker
We lined that lined out five trucks to come full of block. And the way it was supposed to be spaced out is, you know, one truck comes in, next truck goes out. Well, I called our in-house logistics guy, 7.30 that morning said, Hey, just want to make sure everybody's going to start showing up around 11.30 and roll through.
00:06:20
Speaker
said, yeah, absolutely. So we get about an hour in and it's about 8.30 and he called in the first truck called, Hey, I'm here. Get about 8.35 next truck calls. Hey, I'm here.
00:06:33
Speaker
And there's nothing you can do about it at that point because it's a, it's a broker and you're just at the mercy of them. So we had to get a little, little, uh, hostile there with them cause they, you know, they don't, they don't like to follow any rules at all whatsoever. So they ended up, we ended up sending them back down to the, uh, the pilot and make them sit at the pilot gas station for about four hours because they screwed up and you know, then you got to deal back and forth with the brokers and everything else, which then becomes a pain in the ass. So,
00:07:02
Speaker
I feel like any time that you can get it direct, that's the way to go. Yeah. And then I have a local guy who only runs day cabs who we run in Jersey and Pennsylvania when we're at home. And he's the same way. He'll like drop trailers at our yard two or three days in advance so we can preload them for him or drop them at the job sites and leave them there if we're taken down. So, it you know, having good logistic partners really does make the world go round.
00:07:29
Speaker
Do you guys have a full-time CDL driver is it just you when you can? No, we have but one guy. That's all he does. He doesn't install any tents, just CDL drives. Okay. And then you just do it as a hobby?
00:07:41
Speaker
Yeah. I barely drive now, honestly. That's good. I'm glad you're delegating. I'm glad you're learning. I'm trying. Do you guys have any other big projects going on currently or you got anything else coming up?
00:07:55
Speaker
Next week we start some stuff for move-ins and like sports seasons for universities. And then all our local high schools the week after that go back. So we have the convocation ceremonies and all that stuff. So the whole tent season is back. I'm happy.
00:08:09
Speaker
Good, good. I've got a...
00:08:14
Speaker
I've got a little bit of a scenario to throw out to you here. So, and and just kind of tell me what you would do. This was, so we got this big job coming up, uh, that starts. We actually we started it yesterday. It's the, uh, music city GP, the Indy car race in Nashville.
00:08:26
Speaker
Um, and we have a guy, I'm going to guess he's not going to hear this podcast. So I'll just throw him under the bus then. Um, so he, he basically, he got a 15 meter by 30 meter last year and it was for, to put some older, um, Indy cars underneath and,
00:08:43
Speaker
And this year, and then the customer actually paid for it last year. This guy individually has to pay for it this year. He was on my butt for three weeks. I need this. I need this. I need this. I need this. I got it to him, got them all done. Got them all secured. He said this year he won a six meter by 30 meter.
00:08:59
Speaker
We pulled the frame, got everything prepped and ready. He said, it's going to be a go. No problem. I sent him over the quote, never heard anything back. He still, he then told me it's still a go. It's still a go. Then Wednesday, the day before delivery, after it's already on a truck, texted him and said, hey, just need to go ahead and get the payment up front right now. We're going to deliver tomorrow.
00:09:21
Speaker
We've got a bunch of stuff going on. We're obviously going to be out there for two and a half weeks setting up.
Labor Costs and Pricing Strategies
00:09:25
Speaker
But you're just going to be on this next truck coming out tomorrow and we're going to set yours early. Okay, no problem. ah Can you send me over the bill? Send them over the bill. Hey, do you how much money do you need right now? And I said, well, inside 30 days it's 50%, but you're you're getting delivery.
00:09:42
Speaker
So now it's 100%. So we need all the money now up front. Well, you need all the money up front before the event? Absolutely. So we send it out, guys go on site. um Yesterday was Thursday we started and I got an email. So when we send a quote out, it comes from our server email, right?
00:10:01
Speaker
So if they respond, it goes back to the server email and then one of Deb who's in our office, she will send it out to us. She sends me the email back. This guy didn't have the, you know what to call me or text me, but he sent an email back to the server.
00:10:19
Speaker
to say, hey, I won't need this tent anymore. Sorry for the miscommunication there. ah We'll reach out next year. So, you know, my my text back to him was, so then I went ahead and texted him because obviously he didn't have it to go and text me in the first place after going back and forth with me ah and just told him, you know, inside 30 days, it's 50% non-refundable, 100% week of, and, you know, for situations like this,
00:10:49
Speaker
And he said, I'm so sorry. There's just been so much back and forth with other parts of this you know event. um i'll I'll use you guys next year, but this year I'm just going to go no tent. So big picture is it's a big event. You don't want to piss people off. You want to play ball, obviously.
00:11:08
Speaker
But do you go after the guy and get the money or do you just take it as it's a six meter by 30 meter? I mean, in in I have a bunch of different scenarios, but would love to hear what you have to say about it.
00:11:23
Speaker
He's not going to pay you. That's kind of my point. that's the like I wish you could it was easy to go after people like that all the time, because I would love to do it.
00:11:37
Speaker
but like yeah What you spend if you've got lawyers involved, you're going to lose money on the whole gig, most likely, either way. Let's be honest, it was seven grand.
00:11:48
Speaker
It was seven grand for his portion, which isn't, in the grand scheme of things, when you look at the whole picture on what the whole job is, but and he's not actually connected to the actual customer. He's an individual. So, you know, that's, I'm trying to look at the big pictures.
00:12:03
Speaker
I still sent the frame up there, and the frame is sitting there, and it might, we might have a last minute vendor that might need it. So I might make the money up, is way I see it. Or, you know, do it cheaper. Did sign anything?
00:12:16
Speaker
No, see that's the problem. he i sent that quote over and everything, and I just couldn't. He kept telling me yes, and then I couldn't get him nailed down. and But he's done it with us for the past two years he's got a tent. But come to find out, it was through the other the actual customer and not him individually paying for it.
00:12:34
Speaker
Yeah. So once he realized that he actually had to pay for it, that's when his his mind changed on it. It's weird how that works. got actually spend money. Yeah, it's crazy. But, i didn you know, i the it's just a labor thing for me at that point that um that pisses me off.
00:12:53
Speaker
Well, that's the... I was talking to someone few days ago about that. Even, you know, sub-rentals. Obviously, we sub-rent back and forth, Nate, now a lot more than we ever have before.
00:13:08
Speaker
And I can't figure out, you know, how to price things because no one really thinks about how much labor goes into just prepping it, counting it when it comes back, all that stuff. Like you almost have the same amount of labor in it, whether going to you Nate or it's going out on a job for me. It's just, I don't have to install it.
00:13:27
Speaker
So it's a matter of, you know, I get, we all need to really think about that. You can't, let we'll use dirt track floor for an example. Say you charge two bucks a square foot to rent it.
00:13:39
Speaker
Well, if you're sub-renting it, you still have all the time in loading it, pulling it. the exact same amount of time that would take you if you were doing it for your job or was sending it to you. So like you couldn't discount it 70% just to send it to someone else.
00:13:54
Speaker
No, I, at that. You're not going to get your money back from that guy to, to load it and all that stuff, even though you should. Yeah. You should pay me that. Say it's 1500 bucks.
00:14:05
Speaker
Right. I mean, just the guys cleaning it in this time of the year, and you know what this time of the year is like, but just the guys cleaning it is, is, uh, it's hard in itself, but yeah on the, on, on the sub rental portion though, I would agree with, you know, pricing. I think that most of us, you know, between when we do, you and I do sub rentals or Mike and Brian do sub rentals back and forth, or even, you know, like Lee the other day and when I was talking with him, the conversation is always, where do you need to be?
00:14:37
Speaker
Yep. Where do you need me at? Which is great. in In theory, that's a good conversation, and you can be totally honest. and Because you guys understand it. You understand what goes into it and you're not going to try and screw somebody over on it, and we can have that conversation.
00:14:50
Speaker
But you get some of these companies out here that are still charging you full price. I mean, there's one company that you know we deal with that they charge us full price on things, and then they're like, hey, mark yours up.
00:15:02
Speaker
Okay, I get that, but you also need to pull your labor out of it because a lot of the pricing in this industry is based with labor in it, and which I feel like is a whole other conversation of do we need to pull labor out of temp pricing?
00:15:17
Speaker
Do you just show the rental pricing or the labor? You don't think so? So what I've noticed is eight years ago, your statement's correct, pre-COVID, so six years ago.
00:15:28
Speaker
Post-COVID, a lot more people are charging additional labor fees like we have. Me too. Does that mean I pulled the price out the labor out of the price of the tent? Obviously not. Right. But I'm charging for the increase in what labor is costing me from five years ago to what it is today because it's going up exponentially.
00:15:47
Speaker
It's huge. Or if you're getting a hired-in crew, you've got charge for the hired-in crew because you're not going to cover your labor cost that's already associated in that price without adding more labor if you're bringing in a hired crew.
00:16:02
Speaker
Correct me if I'm wrong, you the way you guys do your pricing and invoicing, all your labor's a separate line item, correct? I know you have a, usually it's a big number if i when I get prices for you come to come do a 30 or 40 meter for me.
00:16:15
Speaker
Like your labor is completely not in the temp price? No, it is, it is. So the labor is in the rental and temp price together. um the Now if I'm doing like a 30 or 40 meter our typical what we call a typical crew is four guys four guys in a truck going somewhere so if I'm doing a 30 meter I need at least six guys right so um you know if I have to get i usually get two to three more guys to call it seven um six to seven guys and it could be eight just depending if you go up to a 40 meter but the other three guys I'm not typically bringing them from in-house because
00:16:56
Speaker
If I have to bring another crew, not everybody has a license. So most of our supervisors all drive, right? All of our supervisors drive. So now if I have to bring another three guys in, now I'm pulling it from that other crew. So typically if I'm going to supplement on like a normal crew, I'm hiring in three more guys from another company, a labor company and not not your run of the mill labor company in your local town. It's tent labor, you know, like we all have been using.
00:17:24
Speaker
And so that's when I have to put a bigger line item at the bottom to cover their hotel per diem, their travel, and the labor associated with their day rate. And so that's that's that's how I start pricing up labor a little bit.
00:17:38
Speaker
If it's our crew, I don't tend to add a line item for labor. Really? Okay. So I didn't know that. Yeah. Yeah. I try and, i mean, obviously we try to be as fair as we can on the pricing there. And I think they're just, you know,
00:17:54
Speaker
cost breakdowns that we do on each job and the analysis on each job, we figured it in so we can make money on that. Um, but I mean, you, you're relying a lot on salespeople. I mean, at the end of the day to see, I mean, we're basing off working a 10 hour day, right? Okay. Anything over a 10 hour days now, overtime that price in, in that, that labor price associated in that tent costs with the rental, it doesn't add up then it's not really,
00:18:20
Speaker
accurate so then you do need to start charging more and I think everybody needs to look at that and charge for a 10 hour day and then put more labor on it just so we can all across the board be you know around the same thing not the same pricing everywhere but I look at it as like a lever you can pull so you know I know in the middle of September for four and a half weeks from the middle of September through October my guys are going to have 40 hours by Wednesday, right five or six o'clock at night.
00:18:54
Speaker
So any job I booked that week, you know, I need to account for everyone's gonna on overtime. Right? I can play with the labor number line item to adjust to make sure we're still profitable on the jobs that we're doing. But we're paying the guys overtime to do them no matter what, right?
Managing Last-minute Changes
00:19:11
Speaker
Right. And you know, in August, if I'm doing a project, that I can limit the guy's hours. I can say, oh, you know what? You're going to have Tuesday off because we're going to have to work Saturday, things like that. So I can lower the labor number.
00:19:23
Speaker
So I use that kind of instead of surge pricing, because I hate that word. Dynamic pricing. Yeah, dynamic pricing. I would rather just play with the labor number and to adjust for if I know we're going to have overtime or not have overtime that week.
00:19:38
Speaker
Yeah, and I also use that a lot during, like you're saying, during busy time. So like coming up now, September to right around November, we're wide open. So it's now you're now your labor gets higher in price. So if you book a last minute job and from now until November, you're now getting charged at extra labor where before, if you would have booked that job earlier in the year, you're getting charged a normal labor rate, normal rental rate, normal pricing.
00:20:06
Speaker
But as we start to get into these busy times, you know, and that, that That's kind of where we started to add more labor, you know, August, we're not charging anymore for labor just because we know that, Hey, we probably don't have a lot of work in August so we can charge normal.
00:20:22
Speaker
Uh, we're gonna have more crews available, but anytime in let's April to the beginning of July, we're charging for extra labor. If it's not on the schedule ahead of time and same thing at the end of the year from August into the end of August to, to, uh, you gotta charge extra for labor.
00:20:39
Speaker
Yeah, 100%. And you know, some of it's the customer's fault because like I'm dealing with a music festival. We start install in 18 days. They have not given me a confirmed order yet.
00:20:52
Speaker
So i just keep telling the guy, well, I'm not giving you your quote until I have the list of what you want. And I'm just going to play with this labor number and say, okay, well, because you added all this stuff 18 days before, i have to increase the labor line item because I have to throw extra labor at this because we've booked other work in your spot.
00:21:10
Speaker
When did you take that job though? I've been doing it for three years and every year it gets later and later that they give me the answers. What I would recommend... not telling you how to run your business, but setting the expectation up front, you know, is huge in this industry.
00:21:25
Speaker
yeah So what I have done on actually music festival, I got one in Nashville. It's the same way now. um I put a, let's just call it $20,000, right?
00:21:35
Speaker
So I said, okay, your music festival is in August, right? But you don't know all the details and you don't have anything to. I'm throwing $20,000 additional labor on this. And she's like, wella Whoa, hang on. That's a lot. And I'm like, I get it. It is a lot.
00:21:47
Speaker
This is worst case scenario though, because I don't want to come back to you. If you start changing things, you know, two, three weeks out and I have to say, Hey, now it's going to cost you 20 more thousand dollars in labor because I got to hire in more people.
00:22:00
Speaker
And those timelines, as you know, are so screwy and they change and they fluctuate and you might have 10 days to set up and now you've got three days to take down. Well, I mean, that's $15,000 in labor of guys that you got to bring in. So what I've been doing is on those putting, putting worst case scenario labor on it.
00:22:18
Speaker
And then what I'll do is by the time we get ready to set it up right before i can fix that labor number. So that way they know the worst case scenario, but they know it can go down. And it also, then it forces them.
00:22:30
Speaker
It puts the ball in their court because then they're like, Oh shit, I got to get this done. got to figure it out so that I can get this number knocked down and make be more profitable because it, It's just taking more money out of their bank. Yeah. It's, you know, it's wild to me to think that these music festivals are so disorganized. Like, you don't realize it.
00:22:50
Speaker
You go to one and you're like, oh, my God, this place is so organized. They thought of everything. You don't realize behind the scenes how screwy they are. And they really have no clue what's happening until the night before. Mm-hmm. Well, and the the other issue with the whole labor thing that you really got to think about, too, is, and this isn't bashing any of the labor guys out there because they're all great,
00:23:10
Speaker
you got to have somebody that controls them because what you, they work on a 10 hour day. So their flat rate, let's call it $400 a day flat rate, right? After that 10 hours, they work on overtime and it's every day that they work on overtime. So if you work two extra days or two hours that day, they're working on the overtime. So you have to, and they're not going to, they're not going stop working.
00:23:34
Speaker
So it's almost to the point where you're like, yeah, and unless you, unless you tell them, but it's, And that's where that can end up screwing you on the labor process. You know, you can put that $20,000 in there, but you're accounting for a 10 hour day at $400 a day, right?
00:23:48
Speaker
Per man. yeah So now you have to make sure somebody's out there managing and project managing these guys. Otherwise now they're working 13, 14 hour days and now you're built $30,000 and now you thought you were going to make money by adding the labor on there, but you lost your ass again.
00:24:01
Speaker
Yeah, exactly.
Industry Collaboration and Events
00:24:03
Speaker
So, well, and going back to the sub-rental thing, like the Duratrac thing, to me, that's like a 50% off deal. You're getting, ah and two let's say you're $2 a square foot, which is kind of low, but a dollar, that's your labor, a dollar, it is your rental, you know, or vice versa. But I think i think if you're going to sub-rent people like that, then you need to at least pull your like look at your labor cost see what your labor cost is, pull the labor out of it, and just rent them what the what the actual item is.
00:24:32
Speaker
And a lot of people don't look at it that way, and i think that I think it's shitty when people don't want to work together and come up with a you know ah price together and would rather just rent it for the same price. It's like, if it's sitting on the shelf, I mean, I get it if there's a demand for but if it's sitting on the shelf, let's play ball.
00:24:51
Speaker
Yeah, 100%. You guys do a lot sub-rentals? All right. Yeah, only to you. That's what I thought. and And we can't get yours back to have your sticker on it, so I apologize. We'll work on it.
00:25:05
Speaker
I know. Yeah, Jesus.
00:25:08
Speaker
We've sent three extra trucks up here this week from you. Yeah, I wasn't going to say that, but we're going to go ahead and close this out now before you get too deep into that. but um we What do we got? we got ah We got party reflections coming up here in ah in ah about a week.
00:25:26
Speaker
We're about a week out from party reflections coming up, so I'm looking forward to getting there and seeing everybody. Getting there on the 27th, 28th should be some good stuff. We've got some live shows coming, in some good interviews. And, yeah, really going to push this back out. I think we've got some big stuff coming after that. And rental management is really going to dive in deep for us. So looking forward to
Closing Remarks and Teasers
00:25:50
Speaker
it.
00:25:50
Speaker
Yeah, everything's been working great. I'm excited about our new partnership and still having fun with you, man. And maybe by then we can get Kyle some good Wi-Fi and we can get this thing figured out. so Excuse me, sir. You didn't make the last podcast last week because of your Wi-Fi? All right once Once again, we're cutting you off. All right. This has been another episode of Under the Vinyl.
00:26:13
Speaker
See you, buddy. See you. Talk you soon.