How to Start a Party Rental Business
A party rental business is a big part of a celebration's success. For a fee, party and event hosts can rent a variety of items that would be expensive and impractical to buy for one-time use. You can start a party rental business at home and expand as you build your reputation and customer base.
Visit other rental businesses in your area to see what they have to offer and what they charge. Take brochures, if they're available, and pay attention to how the physical space is organized. You'll gain information for setting up your own business and, hopefully, think of ways you can improve on services currently available to potential customers.
Party supply rental is big business, generating approximately $5.9 billion in 2018. Over the past five years, the industry has grown at a rate of 4.5 percent. Experts expect the trend to continue, meaning there are opportunities for starting a party rental business.
It is estimated that there are more than 12,500 party rental businesses operating in the U.S. That doesn't mean there's no room for your business, as long as you can provide what people are looking for and can't find elsewhere. Think not only of items to offer for rental but of outstanding customer service.
A party rental business may specialize in one or more of the following types of events:
- Bachelor/bachelorette parties
- Bar/bat mitzvahs
- Children's parties
- Corporate events
- Family reunions
- Garden/pool parties
- Themed parties and events
No single rental business can stock everything, so start out by determining the needs of your target clientele as you purchase items to rent through your business. Party rental businesses typically have items such as:
- Altars, arbors and arches
- Audiovisual and lighting equipment
- Bars and barware
- Carnival, casino and yard games
- Dishes, glassware and cutlery
- Decorative items such as vases, candleholders and table numbers
- Food prep and serving equipment, including sno-cone, ice cream and popcorn machines
- Helium balloon tanks
- Safety items such as traffic cones, cable ramps, stanchions and fencing
- Staging and flooring
- Tables and chairs
- Table linens
- Tents and canopies
Starting a party rental business can be costly, depending on the items you purchase to make available for your customers. Porcelain dinner plates, for example, typically cost $3 and up; restaurant suppliers usually sell them in cases of 12 or 24. A canvas pole tent measuring 40 feet by 100 feet costs around $7,000. With enough rental income, you should be able to recoup your costs eventually. Still, you need sufficient capital to make the initial investments, plus cash on hand for breakage and repairs.
Some government programs provide grants to entrepreneurs, particularly veterans, women and minorities. Search for a grant from a reliable information source such as The Foundation Directory or grants.gov. Your local public library can help you access these sources. Beware of websites that offer free money to start your business. Remember, if it sounds too good to be true, it probably is.
A written business plan is required reading by banks, investors and other lenders, such as suppliers with whom you want to establish an account. A written business plan demonstrates you thought through all the details of your startup and helps you with decision-making in the future.
Find a business plan template online. There are many to choose from, including business plan samples specific to the party planning business. A business plan has the following sections:
- Executive Summary: Briefly explain what your company is and why it will be successful. Provide basic information about the products, services, leadership team, employees (if any) and location. Include a mission statement that tells who you are, what you do, and why you do it well. For example, "ABC Party Rentals takes the worry out of party planning and lets you have more of the fun."
- Company description: Provide details about the problems your business will solve and the consumers, organizations and other businesses your party rental company will serve. Tell about your competitive advantages, such as location, experience, specializations or unique items in your inventory.
- Location: Describe where you'll interact with customers, and where rental items will be displayed and stored.
- Market analysis: Demonstrate your understanding of other party rental businesses and what makes them successful. Then tell about your plans to do it even better.
- Service and product lines: Provide details about the items available for rent. How will items be organized and stored? Will customers pick up items, or will you deliver? How will you handle breakage and overdue returns?
- Marketing and Sales: Explain how you plan to attract and retain customers as well as continue to build your business. Describe your point-of-sale (POS) system for accepting payments from customers.
- Funding request: If asking for money from a lender or grantor, cite a specific dollar amount and explain in detail how you plan to use the funds. Individuals and organizations that give money to entrepreneurs usually want to know that you're investing some of your own money too. Be prepared to share personal finance information and the amount of working capital you have to put into your business.
- Financial projections: Include information about your expenses, pricing structure, and projected income and balance sheets for at least two to three years into the future.
- Appendix: In this final section, include supporting documents and other materials requested explicitly by lenders or grantors. These can include credit reports, letters of reference, resumes, certifications, permits, contracts, legal documents and photos of facilities and inventory.
Customers typically visit a website before a storefront when deciding what to rent for their event. Unless you have experience with commercial website design, it pays to hire a professional who can create a site that's both eye-catching and easy for customers to navigate.
Include photos of items for rent, pricing and policies. You can also include logos of organizations to which you belong, such as the local Chamber of Commerce or the American Rental Association, and customer testimonials as you get them. Sunshine Tent Rentals of Westminster, Massachusetts, has an interactive feature on its website that lets you move virtual tables and chairs around inside a tent to help you visualize the space.
There are two types of photos you want to use for your party rental business: product shots and context (or lifestyle) shots. Product shots focus on a particular item, such as a place setting. Use a tripod for your camera (a smart phone is fine) to get a consistent angle for all your pictures. A plain white background is best unless, of course, you're photographing something such as white dishes. Then, a dark background shows the product to best advantage.
Context or lifestyle photos show the product in use. It might be a wide-angle shot of a wedding tent and beautifully appointed tables, or it could be a bouncy castle set up in a nicely landscaped backyard. Do not use photos in which people can be identified unless you obtain a signed photo release.
Every business needs a tax identification number or Employer Identification Number (EIN). Visit the website of the Internal Revenue Service and complete the application. The process is free, and you should receive your unique identifier within one to two business days.
Check with your city, county or town hall to find out what is required for a party rental business license in your location. Regulations and fees vary.
There are franchise opportunities for party rental and party supply stores. Party Central Rental and Sales, for example, requires a total initial investment of $250,000 to $1 million for a storefront and inventory. Bounce 2 the Moon, which specializes in bouncy castles and carnival games that franchisees deliver to customers, costs around $40,000 to get started.
The advantage of a franchise is that you have an experienced team behind you. Many of the big decisions are already made for you, covering such areas as inventory, policies and pricing, and sales and marketing. The disadvantage of a franchise is cost, particularly if you don't have a lot of working capital, and you want to start small.
Is there a party rental business for sale? You may be able to buy an existing business. People sell their businesses, even successful ones, for a variety of reasons, so it's essential you ask questions. You want to know the current state of the company to reasonably evaluate its potential.
Questions to ask when buying a business include:
- Why are you selling?
- May I see the last three years of financials?
- What are some industry trends, and what do you think are the biggest challenges?
- How can I increase profits?
- Are you willing to finance part of the purchase price?
- Will you stay with the business for a specified time in the beginning?
- Who knows that the business is for sale?
- Who makes the decisions about selling the business?
- What's your timetable for the sale?
There are no right or wrong answers, only answers that are satisfactory or unsatisfactory to you. In general, if a business owner can't or won't answer questions such as these, it's probably wise to look elsewhere.
Party planning services could be part of your rental business. It depends on how you want to run your business and what knowledge, experience and resources you have. Party planners may handle any or all of the following tasks:
- Creating a party theme
- Finding and booking a site
- Arranging for food, decorations and entertainment
- Planning transportation to and from the event
- Sending invitations
- Arranging accommodations for party attendees
- Coordinating the activities of party personnel
- Supervising at the party
Several colleges and universities offer bachelor's degree programs in event management. It's an indication of how important the industry has become and how much skill and knowledge are required to manage big events successfully. You certainly don't need a degree to start your business or get a party rental business license. However, to be certified in event planning enables you to further build your business by offering customers a valuable service.
A certification is a peer-recognized credential demonstrating you have the appropriate knowledge and experience in your field. Earning a professional industry certification identifies you as having attained a high level of knowledge and professionalism in the industry.
Look for a certification program offered through an accredited school. Online courses, such as the ones offered by UMassOnline, Ashworth College and New York Institute of Art and Design, can be completed in as little as four months. Be sure to research the school and the program before you sign up and pay your fees. Virtually anyone can set up an online course and issue a certificate, but if it's not recognized in the industry, it is of little benefit.