Photo booth hire – cheaper isn’t always better!

credit-cardsWe all know the saying “If it seems too good to be true, then it probably is” and yet people fall for it all the time. News has come out about a company based in Halesowen that were offering £500 for a buffet, DJ and photo booth package. The were also offering three hours of photo booth rental for just £149! This is a totally unsustainable marketing method. Our Big Red Photo Booth prices, for an evening hire, start from £425 for three hours rental. How come our price is so much higher than the company in Halesowen? Is it just that we are more greedy? I think not and let me explain why.

Let’s take a look at my costs.

If we take a booth hire of £425 – the tax man will want 20% of that straight away, which brings my cut down to £340. It takes about an hour for us to build the booth and another to take it down, plus the three hours of operational time – a total of 5 man-hours. At minimum wage that means another £32.50 has gone per person – and we typically have two staff in attendance for a busy booth booking. This means that the company’s slice is now a maximum of £275. Now we have to deduct travelling time and mileage. For the sake of example let’s say that the booking is 20 miles from Rugby. Using a rate of 49p per mile, that’s another £19.60 gone along with 2 hours of staff time ( let’s call it £13). The company’s take is now at £241.40.

Next there’s the cost of the consumables – the printer paper, the guest book, the USB drive with the images – £75 at the minimum. The company is now looking at earning a “profit” of £166.40.

From that, we’ve got to cover our insurance (public liability & vehicle), pay our corporation tax, pay our accountancy fees, pay for maintenance on the booth, replacement of props that get lost or damaged, pay for our equipment to be PAT certified to ensure our guests safety and so on and so on…. Not forgetting, of course, that there’s the capital expenditure of building the booth in the first place that needs to be recovered.

The costs we face are pretty much the same as any other booth operator. Some may buy their consumables at a lower rate than we can, but not by much.

Their rates….

Income £149 – (Taxman’s slice @ £29.80 + Three hours at minimum wage @ £19.80 + Consumables  @ £75) = £124.60. This leaves the company with a ‘profit’ of £24.40 from which they’ve got to cover the rest of their business expenses!

This is not professional way of running a business! At those prices there is no way that they can allow for any contingencies for unplanned expenses. In the case of the company in Halesowen, it is reported that their property was burgled. Operating on such slender margins meant that they could not recover from such a hiccup. It takes a very long time to cover the costs of a booth if the company is making less than £25 per booking! It would take 38 bookings – 114 hours!! – just to cover the cost of the printer alone!

The conclusion here is that is not greed that drives a higher price, but professionalism. It is totally unprofessional to operate on a next-to-zero profit.

More details about the failed company can be found here: ITV NEWS



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