3 Easy Steps to Start a Party Rental Business
If you have ever hosted a large-scale party or celebration before, chances are that you have had some kind of experience with the party rental business. Perhaps you have even found yourself looking around at the tables, chairs, tents, bounce houses, and dunk tanks and thought, “Hey! This could be a fun business to get into!” And you know what? It can be – if you are willing to put in the work.
The party rental business is not simply a matter of buying some tables and chairs and the like and renting them out to customers. You are ultimately helping people create experiences and memories that will last throughout their lifetimes. And to do that successfully while being competitive with others already in the market, you need to know the party rental business inside and out.
Are you still thinking a party rental business idea is for you? If so, read on for our guide on how to start a party rental business.
Step 1: Do Your Research
What Does a Party Rental Business Do?
Essentially, a party rental company rents out often expensive supplies for large events that your average person could not justify buying themselves. There are general party rental businesses out there, but there are also those who cater to a specific niche, such as:
- Event design and production, which specializes in supplies such as AV equipment and lighting
- Entertainment rentals, which usually focus on inflatables and a wide range of games, from carnival games to arcade favorites
- Décor and design rentals, which specialize in certain kinds of décor or custom pieces
- Casino rentals, which have the typical games and rentals you would see at a casino
- Photo booth rentals, which rent out props and booths for pictures
In addition to providing the supplies, party rental businesses will also often deliver and even set up the equipment for their customer’s event. They will also come back and pick it up when the party is over, though some customers may choose to do so themselves.
Do I Need Any Licenses or Permits or Open a Party Rental Business?
You will almost certainly need a business license to start a party rental business, along with a sales tax permit and perhaps also an occupancy permit. You may require even more licenses and permits, but the requirements for any of these can vary depending on where you plan on operating your business.
To learn more about what you will need for your party rental business, get in touch with your county clerk, SBA (Small Business Association), or other local government officials. You will also want to look into what kind of liability insurance you should also have in place for your party rental service, especially if you are renting out bouncy castles or an inflatable slide for a birthday party, for example.
What Are Some Skills and Experiences That Will Help You Build a Successful Party Rental Business?
While having attended parties before may give you some idea of what needs to be done, it will be much more helpful to you if you have hosted some large-scale parties in the past, like a wedding, corporate event, big birthday party, etc.
Prior party planning experience will give you an idea of the types of equipment you will need, how to use it, and any potential challenges you will face with your customers. It is also helpful if you are aware of trending party and event ideas and themes, as it will help keep your inventory current and attractive to customers.
With such a potentially large inventory, organization skills are also important in the party rental business. You need to be able to keep track of your supplies and make sure your customers are getting everything they need on the day of their event.
To keep good relationships with your customers, it is also essential to have good customer service skills. People can get very stressed out on the day of the event that they are hosting, so you need to be able to keep calm and help them quickly solve any potential issues they may have with their rented supplies.
Another important social skill to have in the party rental business is the ability to network. If you can cultivate relationships with other businesses, party planners, and event halls, you may be able to get a lead for a potential customer.
Finally, it is helpful if you have some kind of business and management experience when thinking about an event rental company. Ideally, you will have worked in the party rental business before, but any kind of business leadership experience will serve you well in this industry.
You need to make sure you can stay on top of all of your business and marketing decisions and expenses while managing your employees, as it can be difficult to pull off a party rental business with no staff whatsoever.
Step 2: Figure Out Your Costs
What Are the Startup Costs for a Party Rental Business?
Since the party rental business needs to be able to offer its customers a large amount of inventory for their events, it can have some expensive startup costs. Your inventory alone could cost you tens of thousands of dollars. That is why when you are first starting out, you may want to consider specializing in a certain niche, such as household parties, inflatable toys, or even just tables and chairs.
You will also need a place to store this inventory, such as a storefront and/or warehouse. If you don’t have enough money or inventory to fill large spaces like this when you are first starting, you may consider renting out a storage facility. You could then have customers book appointments and bring them to this space to show them your inventory.
Delivery truck(s) will then be required to drop off and pick up your party rental equipment and supplies. And unless you are planning on driving, unloading, and setting everything up all on your own, you are also going to want to hire at least a couple of employees.
Finally, you may also want to consider investing in a website to show off your inventory and generally let customers know more about your business. If you don’t have a lot of website building experience, don’t worry, as there are website builder tools out there that can make the process relatively quick and easy. Alternatively, you can hire a professional to build your website, though this can be costly.
What Are the Ongoing Expenses for a Party Rental Business?
While it would certainly be nice if customers kept all of your equipment in pristine condition, you will likely need to maintain and replace a good amount of your inventory regularly. Parties can get messy, and people are less likely to really take care of things if they belong to someone else. You can charge people a deposit for your items, but this will not necessarily cover everything you will need to replace over time.
Other ongoing expenses you can count on in the party rental business include any rent or storage fees, employee wages, and maintenance and gas for your delivery vehicles. Your website will also likely have ongoing fees associated with it, which are typically due either monthly or annually.
Step 3: Make a Profit
How Much is the Party Rental Industry Worth?
The US party supply rental market was worth about $4.8 billion in 2021.
What is the Growth Potential for the Party Rental Industry?
In 2021, the growth rate of the party supply rental industry is projected to increase by a whopping 15.1%. In the previous five years, the market size of this industry has declined about 3.6% per year, perhaps largely due to COVID-19 and the associated discouragement of large gatherings, so it is due for a comeback!
How Do You Market a Party Rental Business?
The first thing to always consider when making marketing decisions is your target audience. Generally, you will be looking to market toward individuals, businesses, or other organizations that host large events or parties.
However, if you are planning on occupying a certain niche in the party rental industry, say providing wedding supplies, then you will be marketing more specifically towards brides and grooms. Or, instead of focusing your efforts on those who may be hosting the parties, you may choose to market directly to event venues, planners, and/or managers. You may even choose to do both!
Once you have determined your target audience, networking is one of the most important and effective ways to market your party rental business. Get out there with a stack of business cards and a good sales pitch and reach out to party planners and event venues. If they cannot give you their clients’ business, they may have leads on others who may benefit from your products and services.
While networking in person is a great way to build personal relationships and get leads, you may also consider networking online using social media. Set up accounts for your business on all of the popular social media platforms and start interacting with current and potential clients.
Join some groups that have to do with party planning and get involved in discussions, post fresh content on a regular basis about new inventory and party ideas, and link your accounts to your website so people can easily find out more information about your products and services. Social media sites like Instagram can also be a great tool to do research and keep informed of trending party themes, supplies, and equipment.
How Much Should I Charge for Party Rentals?
Since there are so many different kinds of items that a party rental business can stock, it is hard to give a general guideline as to how much you should charge for your rentals and services. Instead, you should look to your competitors and set your prices accordingly. If you want to beat their prices, though, make sure you are still keeping your profit margin in mind. Your prices should cover your production cost, overhead, labor, etc., while still allowing you to collect a profit.
However, consider the quality of the items that they are renting to their customers. If they are renting low-end supplies and you are renting high-end ones, for example, then this should be reflected in your prices. In this case, make sure your customers know that you are renting high-quality supplies to account for the price difference. Otherwise, they may choose to go with the lower costs offered by your competitors if they think you are renting the same type of product.
Any Other Tips for Jumpstarting a Party Rental Business?
You bet! Here are some other tips to get your party rental business going:
- If you start out specializing in a niche and are finding success, try putting some of your profits towards inventory for other types of events. The party rental business can be seasonal, with more parties typically being booked in the summer months, so consider what types of parties may be thrown in other months. For example, you could have a Christmas-themed inventory specifically for holiday parties and events.
- When you are first starting out and don’t have a lot of bookings, consider hiring a professional photographer and maybe even an event planner to stage an event using some of your inventory. Then, post the pictures on your website and social media to show the kinds of parties that customers can throw with your rentals.
Be sure to check out our entire How To series for more great mobile application ideas.