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Are you fascinated by how glamorous events and parties are nowadays? Do you love throwing parties? A party rental business could be a great business opportunity for you. Its a simple business concept that requires no complicated brain work. You simply buy events equipment in wholesale and rent/hire out the equipment at a set fee.
There are so many business angels you can take with a party rental, you can niche down to a specific type of party or go broad and cater for all events and home parties. Also, there are plenty of ways you can help hosts make their events successful.
Party rental is a lucrative industry, generating more than $6 billion annually. Its growth has been pretty steady and upwards is the only trajectory.
If this interests you, learn how to start a party rental business with the help of our guide below.
Research the market
Party rental is not a new business concept and there are plenty of rental companies as it is. With this in mind, its crucial that you dig deep into the industry to find a competitive edge.
Study the market trends and look at what your competitors are already doing to see what you can improve on.
A great way to stand out is to find a niche that you are passionate about and knowledgeable in.
There are plenty of niches in the parties and events industry. You can choose from kids parties, corporate events, bachelor/bachelorette parties, baby and bridal showers, pool parties, weddings, themed parties, family reunions, and so forth.
Draw up a clear Business Plan
For every new business, the starting point is a business plan. This will clearly map out your business journey and save you from tonnes of losses and confusion.
The business plan will show you:
- The estimated start-up and operation costs
- Your target market
- How to price your equipment
- How to market your business
Start-up costs & Operational costs
The costs can be very high for starting up a party rental, but the good thing is you don’t have to start with everything. You can first buy the equipment with the highest demand then slowly invest make additions.
For a kids birthday party, a bouncing castle, trampoline, and cartoon-themed decor items are in high demand, these you can start with then slowly invest in seasonal events like Halloween and Christmas.
Expect the start-up costs to be in the range of thousands as you have to first get delivery trucks, get signage done, pay for lease/rent, and initial marketing.
You will also need to cater for ongoing costs like rent/storage fees, equipment maintenance, salaries and wages, marketing and advertising costs. The costs will vary for these but you will need to have a set budget for at least 6 months to give your new business time to start making reasonable sales.
You must know who you will be selling to so that you tailor and channel your marketing efforts to them.
For party rentals, you will be targeting mostly clients who can afford to throw parties for their kids or their spouses. You will find these clients in high-income neighborhoods.
You may also target schools and institutions that often hold festivals and fundraising events.
Marketing your business
Set up a website and social media pages, digital marketing will work best for party rental. Also, you will need to capitalize on networking, make an effort to be where your target audience hangs out.
You can also create signs and flyers, use word of mouth through friends and family as well as good old Newspaper advertising and recording
Pricing your equipment
Before deciding how much to charge, it’s best if you check out what your competitors are charging. Knowing the current market price will help you not overcharge or undercharge.
Your pricing will be largely dictated by the quality of your equipment. If you go for high-end equipment your pricing will be higher, so as much as you are gauging your prices with your competitors, have that in mind. Don’t worry about charging more, clients are willing to spend more on quality and style.
Still, on pricing, you will need to work it out such that it doesn’t take you long to break even. Remember the amount of profits you will enjoy will largely depend on how well kept or how long your equipment lasts.
Say, for example, you buy a plastic chair for $27 and rent it for $3, you will rent it out at least 9 times to recoup your initial investment cost before you can start enjoying profits.
The best thing about a party rental business is once you recoup your capital, you are left with a lifetime of pure profits or until when the equipment ceases to function.
To make your business even more profitable consider adding other services and products that a renter would be interested in like mobile toilets, popcorn machines, ice cream bars, and bartending.
You will also need to decide how much deposit your renters will pay to cater for any damages that may occur during the period the equipment is in their possession.
Legalizing the business
You will need to turn your business into a legal entity to prevent you from being liable should your business be sued. You can either opt for your business to be an LLC, a sole proprietorship, a partnership, or a corporation.
Each of these entities has its pros and cons so you need to weigh all the options and see what will work best for your business.
Here is a good resource that explains more about the various types of business entities
Since you are investing thousands of dollars of your hard earned money, its only prudent that your insure your business. This will cover your business in case of any loss, theft or damages.
There are plenty of insurance agencies that can give you a good deal if you are willing to take time shopping around.
Licenses and Permits
There are no actual licenses for operating a party rental business, however, if you plan on renting out space for your business you will need to have licenses and legal permits for you to enter into leasing agreements as well as other contractual agreements.
As a requirement for every business in the State though, you will be required to get an Employer Identification Number, Occupancy Permit as well as Sales Tax Permit.
A party rental business is a lucrative business no doubt with an immense growth opportunity. However to succeed, just like in any other business, you have to really roll up your arms and dig deep for information. It is only then that you can decide whether or not your best suited for it.
Aside from researching, starting small is highly recommended. This way you get to study your clients and know what they want then give them just that.
Finally, look for that unique selling point and capitalize on it.
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