If you have an entrepreneurial spirit, you’ve likely dreamed of starting your own business for years. Now that you’ve decided to create a party rental business start-up, it’s time to learn the ropes.
The party rental industry can be stressful and very labor-intensive, especially when you are first starting as a small event rental business start-up. However, it can be very rewarding as well. Seeing parties and events go off without a hitch, thanks to your rentals, will not only fill you with pride but will help get your name around, too.
Starting a party rental business can be a very lucrative endeavor since the operating costs are relatively low, it’s not super risky or speculative, and there is a pretty steady demand year-round. But to be successful, you have to know how to do things right. Keep reading to learn exactly how to start an event rental business.
How Does a Party & Event Rental Business Work?
Party and event rental businesses work just like every other rental business. People who are hosting a party or an event are going to need supplies and equipment, and it is usually cheaper to rent than to buy. That’s where you come in.
Party and event rental businesses either specialize in one niche, like tables and chairs or have a large inventory of everything from tablecloths to bounce houses that they rent out to clients.
Typically rental businesses coordinate with clients to figure out what they need and when they need it and then give them a personalized quote based on that information. Party and event rental businesses will usually include delivery, assembly or set up, pick up, break down, and equipment cleaning in their rental costs.
What Is a Party & Event Rental Company’s Business Model?
The business model that party event rental companies use is pretty basic and straightforward. Understanding the event rental business model will help you figure out the answer to the question “how much does an event rental business make?”
The business owner buys the inventory, rents it out on an hourly or daily basis at a fraction of the original cost, and after a handful of rentals, the equipment has paid for itself.
As an example to get an idea of party rental profitability, if you buy a children’s bounce house for $3,000 and then charge $300 per day for customers to rent it out, after just ten rentals, you have broken even on your initial investment. After that, you’re making almost pure profit.
This party rental business model benefits both customers and businesses because it grants clients access to party equipment at a much lower price point than buying would allow while making a profit for the rental company.
Using this business model also solves the biggest money-wasting problem both parties otherwise face, which is having equipment and not using it.
What Are the Costs of Running a Party & Event Rental Business?
Although starting a party rental business may sound like a good idea, in theory, the costs could add up to be more than you can afford. That’s why it’s important to have a detailed event rental business plan that lays out all of your starting and ongoing costs so that you have a budget and an idea of what to expect. Check out some of these rental business ideas to find industries that interest you.
Start-up costs include everything that you will need to start your business, not just the cost of the party equipment. Start-up costs include things like:
- Rental inventory
- Delivery trucks
- A business license
- Cleaning supplies
Realistically, you could start a very small party rental company with $10,000 to $30,000 if you already have some of the start-up requirements, like a truck for deliveries.
You can also keep startup costs down by choosing to specialize in one or two types of equipment, like bounce houses or tables and chairs, and then growing your inventory over time as your business grows.
However, if money is not a problem for your party rental business plan and you’re looking to set up a comprehensive party rental company with a warehouse storage facility, you can expect to drop somewhere between $150,000 and $300,000 just getting your business off the ground.
The exact dollar amount will fluctuate depending on what kind of equipment and supplies you settle on and the quantity of each.
After the business is started, you still have to consider how to run a party rental business. Ongoing costs are all of the other recurring costs incurred after starting your business, including:
- Employee salaries
- Equipment repairs and replacements
- Gas and maintenance for your truck
- Storage costs
- Website domain fees
As you can see, the costs of running a party rental business can be substantial, but the payoff is worth it if you persevere and make the right moves.
What Types of Events Can I Rent Equipment For?
Birthday parties are just the tip of the iceberg when it comes to event rentals. Party and event rental companies also provide important services for events like:
- Corporate events
- Graduation parties
- Block parties
- Gender reveal parties
- Retirement parties
Basically, anytime there’s a gathering of people, it could be made better with party rentals. That’s why event rental profitability is so high.
How Can I Grow My Party & Event Rental Business?
You might have noticed that marketing was listed under both start-up and ongoing costs.
Active marketing is always required for party rental businesses. You can’t rely on returning customers to generate revenue because major events only happen every so often. So you must be actively looking for new clients at all times, and sometimes you have to get creative.
Increase Your Online Presence
Having active social media accounts, SEO-optimized landing pages, and paid search ads are all good ways to increase your online presence and have your company pop up in search engines.
Get Creative with Advertising
A funny slogan or catchy jingle can make your business stick out and make your brand more memorable. This approach makes people more likely to feel fondly towards your business right off the bat and to remember your business when they need party rentals.
The easiest and most obvious way to grow your business is to grow your inventory. Party rental companies can help provide all of the little details that go into hosting a great event, including:
- Tent rentals
- Plates and cutlery
- Party games
- Microphones and speakers
You are only limited by your imagination when it comes to curating the perfect party rental inventory.
The Importance of Reservation and Inventory Management
The cool thing about starting a party and event rental business is that it can be a great full-time business venture or simply a part-time side hustle; it just depends on how much time you have to invest.
No matter how big or small your rental company is, organization at every level should be a top priority. Keeping track of your inventory and clients’ reservations is vital to success.
As a rental company, the last thing you want to do is double book equipment or forget about a drop-off. Not only does this cause you to lose money, but it can hurt your reputation in the area as well. You must have a system that allows you to know at a glance what inventory is available on what days, and Quipli can help with that.
Quipli is a rental software that has proven to be a powerful tool for small businesses. It can help you with everything from booking rentals to keeping track of reservations and inventory. Check out Quipli Rental Software today to learn more about what it can do for your party and event rental business.