Being the ‘best’ requires ‘upping our game’
By Connie Lannan
December 12, 2023
When Nathan Pearse, CEO, purchased Colorado Party Rentals, Denver, in 2015, the company needed serious rebuilding. He knew to accomplish that he had to shake things up.
“When I bought it in 2015, it was a no-frills festival company. They did a few weddings. Inventory was basic. When I came in, I wanted this to be a really cool company — a place I would want to rent from. I wanted it to be different from the standpoint of product and service,” he says.
To do that, Pearse and his team focused on listening to their clients, having the right inventory to meet all their needs, doing market research, watching trends, being flexible, not having one strict business strategy per market and providing excellent customer service.
“For the most part, we have different strategies based on the market. We don’t want to be too tied into one type. Some companies are tent-focused. Others don’t want to do tents and love the décor. We are both. It is hard and challenging to cover customers A to Z, from the small nonprofit or do-it-yourselfers who need a little bit of help with backyard events all the way up to clients and planners who are planning extravagant events, sometimes years out,” Pearse says.
“Inventory is the other side. We deal with small to big budgets. We try to gear our inventory for each of those customers. We actually grew with the strategy of a wide breadth of selection of items and then build depth behind as it sells. I think the industry standard is to preselect and stock what they think will sell and then build a deep inventory,” he adds.
Having a diverse inventory has been a prime focus since the beginning.
“When I got into the business eight years ago, the market research I did showed me that everybody has the same stuff. Everybody goes to three or four suppliers. It’s a comfort level. That is how you make money, to keep reusing your current inventory. You can’t be buying new stuff all the time. That didn’t seem quite right to me. We have to find something in between. We have to change this industry and up our game and be very trendy. It can’t just be these small boutique operations that are the trend-setters. There will always be a place for those operations. But we challenged ourselves as we grew and became a bigger operation to say, ‘Let’s not make it simple.’ [Those in] operations are always going to challenge to be more efficient, simple and easy. Do we really need 30 different flatware sets? Do we need stoneware that breaks and is not meant to go on the road? Ultimately, it is yes. We want to challenge the industry norms regarding inventory — not only how much, but also things that are not considered a rental item. We work through that and make sure we give our clients the best customer experience. For us, we want to challenge our sales team to have inventory that features current trends,” he adds. “We are constantly checking in with and listening to our clients and asking, ‘What are we missing?’”
The strategy has worked. By 2018, the business was generating close to $6 million in rental revenue and had two branch locations — one in Colorado Springs, Colo., and the other in Santa Fe, N.M. Then the coronavirus (COVID-19) pandemic hit. Everything came to a standstill. As restrictions eased, Pearse and his team were forced to rebuild again.
By all accounts, they achieved a remarkable comeback. In 2020, Colorado Party Rentals’ rental revenue was $2.3 million. By 2022, it had jumped to $12.7 million — a 452 percent increase. That significant increase garnered the company Market Mover status by Rental Management in its June/July 2023 issue.
So how did they do it? “Three-quarters of it was getting back to where we were at pre-COVID levels. There was a lot of work that had to be done to get back to that. Getting to that was due to all the team. We lost a lot of legacy people and experience [during the pandemic] that we couldn’t afford to keep on. We had 91 full-time employees in early March of 2020 and we went down to 12. I furloughed myself. The rebuilding was our critical piece and to rethink and retool our business, not to where we were but to where we wanted to be. That was the critical piece. Also, hiring in some people who could help us get to the next level and go beyond me,” Pearse says.
He admits his company wouldn’t have been able to make it through the worst of the pandemic without the help of the Paycheck Protection Program and Economic Injury Disaster Loans “to keep people on, also build a better team and relook and rescale our whole company from being a small family organization to a position to be ready to scale up very quickly,” he says.
Now back to full strength with 187 full- and part-time employees during the busy months, the operation has a set leadership team that is helping Pearse steer the ship after the chaos that ensued when rentals came back after the 2020 shutdowns.
“The day the state government said you didn’t have to wear a mask outside anymore, our phones didn’t stop ringing. We were trying to hire salespeople. We hired seven people in a two-week period. We were trying to get up to speed. It was unbelievable. The incoming volume was tremendous. At the beginning of last year I brought on an executive team. We have a COO, two directors — one for operations and one for sales. We also brought in seven operations managers to be able to handle the chaos,” he says.
The company is now moving full speed ahead with a growth strategy that is very straightforward: “We want to be the best in every market we are in,” Pearse says. To watch a video of the company in action, click here.
The company just opened a new location in Salt Lake City during October under the brand name of Summit Event Rentals, its new brand identity for locations outside of Colorado. When looking at different markets, Pearse and his team are flexible in how they view potential locations and markets.
“A lot of traditional companies or private equity firms will say, ‘We have a certain model — have to make at least $1 million or $2 million in revenue before we think we can put in a facility there.’ When I bought the business eight years ago, I was thinking this could be a hub of the spoke. If Denver is our hub, we could move into smaller storefronts with smaller footprints in smaller markets because we don’t look at it that we have to have $2 million of revenue so we can put in this 25,000-sq.-ft. warehouse to be able to do X, Y and Z. We looked at different models and have one for a larger city like Denver with a larger metropolitan population, have a model for a highly seasonal, low-population center and one for a high-population center but low volume, which would be purposely boutique vs. we want every reservation. We want to serve clients A to Z — whether it’s a budget that involves renting a few tables and chairs for a quick and easy backyard event all the way up to a million-dollar wedding on top of Aspen Mountain. There are different models. It is a blended, different market strategy. We are open to all those things. Our job is to identify the right business model for each market,” he says.
It usually starts with calls from clients. “We travel out of state every weekend — Omaha, Neb.; Jackson Hole, Wyo.; Missoula, Mont.; and Sun Valley, Idaho — all out of Denver. We get calls from different markets in which planners tell us we have certain items that no one around them has. That is how we opened Santa Fe in 2019. We received so many calls from those in that market or planners who were planning destination weddings in Santa Fe. They said, ‘I am coming from California and usually work with company A or B, but they aren’t available or the cost to transport is too high. You are closer and have those items I am used to.’ That is generally where we start to get some market research and go from there. I get excited and start poking around,” Pearse adds.
Service is the other main ingredient and growth driver.
Rental was a new market for this fourth-generation entrepreneur who had never rented anything before purchasing the company, but Pearse knew the value of service.
“I came into the industry from the packaged ice industry. It was literally ice cubes. Everyone had the recipe. Everyone had water and freezers. It was all about service, making sure we were there when we needed to be there,” he says, adding that rental is very similar.
That meant creating a culture in which “everyone is accountable to each other,” Pearse says. “If one department doesn’t do everything right, it has a cascading effect on everyone else. It was about building pride to not let each other down and especially our clients. We just don’t want to be an OK company. We want to be our best every day for each other and for our clients. That has fueled our growth.”
That service includes taking care of employees — providing more normal work schedules, benefits and pay raises. “We are looking to reinvest whatever money we make — to add and grow more benefits for our employees, train our employees, keep more staff all year round. The executive team has done things I would have never thought of. You have to trust other people — hire smarter people around you,” he says.
Yes, there have been challenges before, during and after the pandemic, but Pearse and his team have dealt with them and come out on the other side stronger, more resilient and more flexible in order to grow. “It can’t happen without trusting your workforce. That is what I do,” he says.
The goal is “not to make X amount of money,” Pearse adds. “We are in it to build a company that at the end of my time I can smile and say we did the best we could every single day. We tried to bring memories and smiles to people and create experiences for people. It is about hospitality. We want to be able to compare ourselves with the best hospitality companies in the world. We won’t grow just to grow, but we want growth because we truly believe that we are offering a service and experience for clients who don’t have that in the traditional industry and space.”
Purchase introduces owner to rental
Nathan Pearse, a fourth-generation entrepreneur, had never rented anything in his life before he purchased Colorado Party Rentals, Denver, in 2015. Moving into this market was a brand-new experience and challenge.
“I had been in business with my father in many businesses. We had been a multi-generational beer distributor in New York. My father, Trip, owned different businesses throughout my growing-up years. That was my childcare. I was always there — through retail, wholesale, etc. I always grew up in a business atmosphere, but I had never been involved in rental. I had never rented a table or chair in my life before we took the plunge on June 17, 2015. That showed how little we knew about the business to buy an event rental business in the summer months when it is so busy,” laughs Pearse, who serves as CEO of the company.
Before making that move, he owned a packaged ice company for 10 years. “In 2010 we sold that business. I worked for the company that bought it, but by 2013 I had the itch to own something and rebuild something. The ice business was a total rebuild. When we bought the business, it was losing money. We were able to turn it around. We were very successful with that,” he says.
When Pearse was ready to strike out into a new venture, his father was in his late 60s and winding down his business adventures, “but he had the same spirit that is deep inside me. My dad said I would run the company and he would just be there for support. It was fun how that happened. He is now retired after the business re-established itself after COVID. But during those years, he was my co-pilot. He helped us get through the pandemic,” Pearse says.
Having one of the former owners on hand and learning about the American Rental Association (ARA) helped Pearse speed up his rental knowledge.
“I started talking with the former owners. I knew we had to invest money in equipment, and they told me about The ARA Show™,” Pearse says.
Now Pearse “loves going to the show and finding the next trend — and being part of the company’s purchasing team, seeing what the next big thing is. I like going to the show, talking with vendors, understanding their challenges and offering our input to them,” he says. “When we go, we don’t just get one plate. We will go and get six or seven plates and have our clients decide. We give them all the offerings. If it sells, it sells.”
It’s been a learning curve, but that is part of the fun, he admits.
“I learn things every day. I ask questions every day. One of the company’s founders is still with us. I walk into his office every day and ask questions. You are never done learning. If you think you have found the best practice and this is how we do this or that, I hope everyone asks, ‘Why do we do it that way?’ If the answer is that is how we have always done it, that is when you know you need to change,” Pearse says.
Questioning, pushing the envelope — it’s a way of operating that has served Pearse well in all his entrepreneurial ventures and is what is working today with his team at Colorado Party Rentals.