Alright – so today we’ve got the honor of introducing you to Darren Randle. We think you’ll enjoy our conversation, we’ve shared it below.

Darren, thanks for taking the time to share your stories with us today Let’s jump right into the heart of things. Outsiders often think businesses or industries have much larger profit margins than they actually do – the reason is that outsiders are often unaware of the biggest challenges to profitability in various industries – what’s the biggest challenge to profitability in your industry?

The biggest challenge to being more profitable in the event rental industry is the competition. There are so many options to go for a tent, table/chair, restroom etc that it’s tough to actually price an order/project to make the profit percentage that most other industries are able to generate. In my eight years in the industry, I’ve been thankful to have some incredible customers that have valued the high quality of products that we maintain better than anyone in our market and the most reliable services in an industry knows for being less reliable than others – may come with a little higher cost for their events/projects. However, my competitors have also been able to use this to their advantage as they shop our company frequently and have made it a priority to be just underneath us for all categories of products and lines of services. If my competitors actually looked at their profitability instead of just focusing on volume and revenue I’m charging for our products and services, they’d price their products and services accurately and thus create more realistic profit margins for all of us in our industry. Some have went through bankruptcy, ownership changes, mergers, etc. which isn’t uncommon in our industry after so many years of stiff competition and not being profitable and quite honestly the only reason there’s not more widespread stories like that is because of our type of industry. We rent products that after so may rentals pay for themselves and then every rental of it thereafter is profit less general operating expenses. There are so many people in the Greater Houston Area (Harris Co. and every county that touches it) that my closest 5-6 competitors haven’t been pressured to keep higher quality product in their aging inventory and replace more often because if one customer doesn’t want that level of quality, there are only so many event companies in the area but ten million people is a huge market of people that there will always be others that will gladly rent it when it’s the only company/option left on the busy 7-8 months of the year. Therefore – it’s challenging for a company like ours to maintain a high level of quality inventory, pay more skilled crews, focus on safety etc. when the competition is able to charge $8 for a table that should be priced at $12+ each when the replacement cost, storage space, etc. are all considered but instead, we have to be just marginally higher at $9 or so. In that example, our company (who prioritizes our employees, safety, etc) would only make roughly $4 on that table rental (which cost $210 to purchase). So instead of profiting $7 per table to become profitable after the industry standard 15 rentals or so, it’s now taking 25+ rentals before it creates profit and at that point – it’s now got that much more wear/tear on the product and less “shelf life” – thus hindering being as profitable as a company should in our industry.

Darren, love having you share your insights with us. Before we ask you more questions, maybe you can take a moment to introduce yourself to our readers who might have missed our earlier conversations?

I started in the event rental industry because I was working for a fortune 50 organization and had challenges ordering from what I thought was the best and largest company in the Houston area. There were always communication barriers with their on-site crews, wrong and missing products, no importance on timeline or reliability, etc. I saw it as an opportunity to use my skillset from being around the entertainment business and having some operational background to explore a career of being the vendor. Up to this point I had only been the role of the customer. We provide a turnkey event rental solution including a large inventory of various style of tents, tables/chairs, generators and temporary power, climate control equipment, restrooms, fencing and barricades, staging, temporary flooring, linens, table setting items and furniture. I feel that what sets us apart from others in our industry locally is that we actually care about the customer experience – which shouldn’t be a surprise as that’s the only reason I’m in this industry to start. My goal from the initial interaction with a potential customer/event is to understand what their vision is for the event/project and then help them build it using all of our resources and my personal experience of designing a variety of events. I only “sell” a customer on what they need to create the best experience for themselves as the host/organizer and their guests/attendees and not what gives my company the best profit margin. I’m appreciative of the customers that we’ve serviced for many years but I’m most excited about the new customers that have given us the opportunity to earn their business to make them a repeat customer. There are a ton of options for some of the products in our inventory and other companies that can take on more volume than we can (for now at least) and yet we somehow continue to have rapid growth. As for what I’m most proud of, that would be our HTE team! We’ve done a lot of cross-training with our office staff, installers/crews, warehouse team, etc. over the last few years (some planned, others not as much due to the growth) and it would be impossible to service the number of awesome clients we do at Houston Tents & Events without them going above and beyond every day in the office or on the job-site to do things the right way, every time.

Can you open up about a time when you had a really close call with the business?

This is probably a hard topic for most business owners to talk about but if I’ve learned anything from this journey as an entrepreneur, it’s that I’m the best businessman when my back is against the wall. I’ve had similar experiences in my life growing up, moving to Houston with only knowing my, now wife Kori, whom I had met in high school in Tennessee – however nothing is as “near death feeling in business” like not having enough to cover payroll. Our industry sales charts look much like a roller coaster. In Feb-May it’s peaking, then it declines in June and is a bottom line plateau for July-Aug. Then in Sept-Dec it’s another similar peak to the spring event season and once again for end of Dec to beginning of Feb it’s back in the bottom line plateau. Managing cash flow and Capex of new rental products and repair/replacement of equipment is a difficult tasks to manage. I recall times when we were floating a bigger accounts receivable book than I’m comfortable with but we had to offer the terms in order to get the client’s trust in us providing the product/service instead of a bigger competitor because I understand that cash flow isn’t just a problem isn’t just a problem with small businesses but also large corporations. I can openly share that I’ve had to shuffle money around in/out of business accounts and personal accounts on more than a couple occasions and even at some points transfer funds in the middle of the night from personal savings for my family and kids and into our operating account for payroll the next day. I am committed to running and growing a successful business in a very tough industry to start from the ground and work up in today’s landscape of rental businesses. However, I always bet on myself against anyone else and will continue to do so to create as many jobs for some incredible people in our community and help as many of our event clients/organizations to bring their event vision to life. In high school and college, there was a phase from a hip-hop song that I repeated every morning “I am destined to conquer all obstacles, make impossible possible because even when winnings illogical, losing is still far from optional”. Hopefully there aren’t many of the same moments like these payroll challenges in my future but regardless of the circumstances, I’m confident my company will navigate it successfully.

Can you talk to us about how your funded your business?

I started my business my divesting all of my personal savings, stocks, previous 401k/roth retirement accounts, my wife’s TRA teaching retirement account, etc. This is likely a common method for many entrepreneurs to fund their first “start-up” business but that doesn’t make it any less stressful to think about again as it’s such a risky endeavor. When I launched Houston Tents and Events, I sub-rented most of the products I needed from other companies in the industry of whom I was already utilizing their services at the previous company that I was a non-equity partner for the few years prior to starting my own company. It was beneficial for these providers because of the portfolio size of business I had created over my first few years in the industry and that allowed me to offer them those events/projects and just take a small profit margin to start to grow my own inventory for the future. Truth be told, I didn’t have any expectations to own some of the equipment that we offer at Houston Tents & Events such as structure tents, generators, staging, decor, etc. I had created some unique partnerships during this phase of my business and although it could’ve been a strategic relationship, that partnership only exists when there is two-way transparency. Over the last couple of years since the end of those partnerships, the focus for Houston Tents & Events is to be a self-sustaining company in our industry and to own the majority of the equipment/rental products needed to give our customers the level of product quality and service they expect from HTE. In the rental industry, it takes many years to feel any level of profit as most of the money is being put directly back into the business (inventory and personnel) so technically, I’m still putting capital into my company in the “growth” stage, just as I was doing in the “start” stage.

Contact Info:

• Website: www.houstontentsevents.com
• Instagram: https://www.instagram.com/houstontentsevents
• Facebook: https://www.facebook.com/houstontentsevents/
• Linkedin: https://www.linkedin.com/company/houstontentsevents/
• Twitter: https://twitter.com/houston_tents
• Yelp: https://www.yelp.com/biz/houston-tents-and-events-houston