AIRCO ADVISOR 004 Deposit or Not

Should you collect a deposit or not? There is no clear-cut answer to this question- it depends on how you run your business and what the competition in your area is like. Deposits are a safety net for you but an inconvenience for customers, so you need to balance those needs when setting your policy.

No Deposit

High competition areas often are no-deposit zones. In the struggle to convince customers to select your company, one of the ways to make it easy is to not require a deposit.

A no-deposit policy is easy for customers and easy for you. You don't have to track whether or not deposits have been received, how much the deposit was, and what balance remains on the event day. A verbal agreement over the phone or internet seals the deal.

With no deposit required, customers have no commitment to your company. If they call another company who is cheaper, they may forget to call you back and cancel. The risk you run is loading up, traveling to the event location, and being told, oh, sorry, we forgot to call you…

The other issue is one of non-payment. If you have a cleared deposit, you know you have enough money to at least cover the cost of delivery if the customer gives you a bad check.

Percent Deposit

In return for reserving the equipment for that date and time, you are assured of some payment regardless of what happens with the event. Many companies make this deposit non-refundable, so if there is bad weather or a cancellation they still have a small amount of earnings for the event.

When customers have money already paid out, they are less likely to cancel or change their plans. Some customers are more comfortable paying a deposit upfront because they feel it is "insurance" that you will show up on time. Customers who have been burned by rental operators who didn't show up may actively seek a company that accepts deposits as a sign of reliability. While it doesn't mean these companies ARE more reliable, it is a perception that many people have.

Percentage deposits mean calculating a different amount for each client; determining how much is due ahead of time and how much is due at delivery. It also requires you to review upcoming events and follow up with clients who haven't paid their deposits.

If other companies in town don't charge a deposit, customers may find that more convenient and go with them.

Fixed Deposits

A fixed deposit is the same amount, no matter what equipment is being booked. Many companies charge a $25-$50 deposit to confirm a reservation.

In addition to the benefits mentioned for percent deposits, fixed deposits have an added benefit of being easy to calculate. Everyone pays the same amount. The amount is set to cover the cost of loading up and traveling in case something happens and the event is cancelled.

A fixed deposit can be too much to ask for rentals of smaller items and not enough for larger reservations. Deposits have to be followed up as well, taking more administrative time.

Combination Policies

Many companies use a combination of both. Often, there is a fixed deposit for rentals up to a certain amount, then a percentage due over that amount. For example, a $50 deposit on rentals up to $200 with a 50% deposit due on rentals over $200.

This method gives you the flexibility to secure a deposit that is proportional to the event without requiring extra calculations on every small rental. It's a great compromise between convenience and security.

It can be a little confusing for customers if not spelled out correctly. Larger event organizers may balk at the higher upfront fees, but typically most will understand that you need to collect a deposit that is proportional to the number of units requested.

Collecting Deposits

Credit Card: Either online, over the phone, or via fax, credit cards are the fastest way to take and confirm a deposit. There are extra fees involved with credit card payments, making them less attractive to many company owners. However the speed and security of credit cards make them the right answer for many companies.

Checks: Probably the most widespread method of collecting deposits is to mail a rental agreement to the client and have them sign and return it with a check or money order. This does take more time and often clients will forget to mail in the check, so it does require more follow up and administrative work.

Cash or Money Order: You can have the client bring you cash payment or a money order for a deposit. This is the least convenient method of accepting deposits, but may be required if find you are receiving many bad checks.

As you work your business over time, you will probably need to adjust your deposit policy to fit your customers and your business needs. There is no "best way" to collect deposits so adjust your policies to make sense for you.

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Juego de Sapo

Game of Toad

By Mike Reigel

If you are anything like me, you get excited when anything new and different hits the rental market. I stumbled upon a real gem that's been around for a few years but hasn't gotten any exposure in the party rental business. It's a game called Sapo, which translates to Frog.

Sapo is a toss style game, but that is where any similarities to conventional carnival games end. Sapo, which originated in Peru, is built from Peruvian Tornillo wood, saddle leather and brass. This gives the game a lot of character and the feel of a piece of furniture instead of a game.

Sapo is played by tossing heavy bronze tokens onto the leather covered top of the game. The object is to get the tokens to fall through any of the twenty holes in the playing surface. Tokens that fall through the holes slide through a chute toward the front of the game and are collected in scoring bins. Holes have different point values depending on difficulty. Three holes have brass spinners to increase difficulty and one hole is protected by the Sapo (frog). Throwing a token into the Sapo's mouth earns the most points.

The Sapo games measures 24" wide x 24" deep x 42" tall and weighs 70 pounds. It comes unassembled in one box. It took me about 10 minutes to have the game completely assembled. The response from my family and friends has been very good. We actually had to set up spotlights in my yard because it was getting dark and no one wanted to stop playing.

The Sapo game comes with everything you need to start playing, or renting, including 12 bronze tokens. Sapo is currently priced at an unbelievable $185.00. Shipping is a flat rate of $25.00. That's not a typo! You can get this game delivered for only $210.00!

You have many possibilities on how to use the Sapo game. Private parties, schools and small festivals. I'll even be using mine as a freebie to close a deal instead of offering discounts. I would guess that rental rates for Sapo would be between $25 and $75 depending on your market.

Sapo is a well built game that is different from anything else out there. I am impressed with everything about it and have no problem giving it my highest recommendation, 5 RentFuns! -

See it at the Juego de Sapo site.

SIOTO, Training, & You!

SIOTO

There has been a lot of talk lately about SIOTO. So what is SIOTO? Well it isn’t a new type of Chinese food. SIOTO stands for the Safe Inflatable Operators Training Organization, and it is exactly what the name says, an organization formed to train safe operators. SIOTO is dedicated to providing its members with the resources, tools, and training needed to operate safely. The SIOTO creed is simply: SAFETY ALWAYS! SIOTO members pledge to operate in a safe professional manner and to adhere to all of their state and local regulations.

Training

Each module consists of several subsections. The BISOC is a self paced course, there is no time limit for completion. Some modules may take 5-10 minutes to complete while others may take an hour or more. It is suggested that participants take their time and go over the course materials at least twice.

The BISOC course culminates in a 120 question test. Participants must pass the test with a minimum score of 80%-96 correct answers. Each participant is allowed to take the test 2 times. If they are unable to pass the test after both attempts remedial training is required before the participant will be permitted to take the test again and receive certification.

SIOTO will also be offering Intermediate and Advance certifications in the future. Those courses will cover larger slides, obstacle courses, and interactive items such as bungee runs, boxing, and jousts.

All certifications will be good for 1 year and may be renewed for 2 additional years by taking a shorter 40 question test. Complete recertification is required every 3 years.

SIOTO wants people who are willing to carry insurance if mandated in their state, people who want to complete formal training, people who want to make an impact in the industry by accepting safe operations as their way of business with no short cuts period.

SIOTO is working with numerous insurance underwriters to provide substantial discounts for certified members.

SIOTO understands that money needs to be spent wisely. Therefore the following price structure has been developed.

For questions or additional information visit www.sioto.org or email info@sioto.org

Hot Threads at the Forum

Fall is Coming! Lots of Business and IAAPA too.

Wrap Up

That's it for the September Advisor! It's that crazy fall season again and time to fatten up the bank account for winter. Remember, this crazy season won't last forever and before you know it, you'll be resting with your feet up.

As always, if you've got a great idea for an article, send it to us at scottieclaiborne@a-irco.org. We want to hear from you!

See you next month, or feel free to join us at the forum anytime, day or night. Stay cool!

Deposit or Not?

The Tricky Topic of Deposits

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