Running a party rental business has become a popular venture in recent years. This doesn’t come as a surprise as planning events is an extensive process which is full of why people like to hire third-party planners. It generally has to do with renting out party equipment such as lighting, AV, staging and seating equipment, and silverware and flatware.
This stream of business works best for people who are creative and current with party trends. However, there’s a lot more involved in successfully pulling off great events.
Party equipment is at the heart of stellar events
Party equipment is expensive and often fragile; this is why people rent it instead of buying it to cut down costs. This transfers the burden of ownership to event rental companies.
Hence, it is important for party rental businesses to carefully procure the right equipment to rent out and religiously look after it. Use this step-by-step guide to make the right procurement decisions every time.
Step 1: Study your industry
Before starting your party rental business, you first need to research the surrounding market space.
Take a nice long look at current and prospective competitors and the services that they provide. Are they any gaps in the market or a lack of services?
Find them and try to fill them at a reasonable cost. Additionally, you should also look at the competitive edge you can gain. Merely imitating competitors doesn’t get companies anywhere.
Market research also involves looking at customer demographics such as purchasing power, lifestyle, and buying behavior of your current and potential customers. Knowing your customer and competitors is important because it gives you an idea of what would be profitable for you to offer.
Market research done the right way will also hint at how saturated your market is. For instance, a densely populated metropolitan city is expected to have a greater demand for events like graduation parties, birthdays, retirement dinners, and weddings, as compared to a small town.
Step 2: Define your niche and services
Before you start buying any party equipment to rent out, you need to decide if you want to be an event generalist or only wish to cater to specific events. Let’s say if you plan to host children’s parties, then you need to stock up bouncing castles, an assortment of costumes, and different types of game gear.
If you wish to offer wedding party rentals, you might want to buy tents with drapes, linen tablecloths and chair covers, and flower arrangements. Corporate event rentals, on the other hand, would require an entirely different set of rental items including LED video walls, and AV and staging equipment.
Step 3: Calculate your starting capital
Businesses aren’t put on the map without financial capital but they don’t have to put a dent in your savings either. Here’s how to reduce costs and invest smartly in your party rental business.
Buy in bulk whenever possible
Whilst buying your rental fleet, it is important not to over purchase. Once you decide on the approximate amount to procure, a good rule of thumb is to buy stock in bulk rather than as individual items. This helps as most vendors give discounts on bulk purchases.
Bulk purchases also majorly pull down shipping costs. Getting a set of 20 chairs shipped to your workplace once is likely to cost less than getting 20 chairs shipped separately.
Prioritize your purchases
It is no secret that you should differentiate between absolute necessities and fancy wants when it comes to buying items for your party rental business. Always make a list of things that you intend to buy and categorize them under ‘necessary purchases’ and ‘good-to-have upgrades’.
Let’s say, if you rent out power equipment with your party fleet, it is more important for you to invest in a movable power generator first rather than in a lavish tent.
Know what your business costs
Procurement costs aren’t the only costs associated with running a party rental business. Make sure you know your expenses before you launch an ambitious venture. These may include business incorporation fees, insurance premiums, office rent expense, and employee salaries.
Some additional costs may also consist of online and print marketing. And of course, the cost of acquiring rental equipment. Once you know what your expenses are, you can zero in on minimizing them.
Additional tip
If you’re already working somewhere and have yet to brave your way before you start your own company, it’s a good idea to save at least three months’ salary from your job to pay for your bills while you’re busy kick-starting your party rental business.
Let’s start with the basics: What to buy?
Party rental businesses differ by the kind of events they cater to and the type of equipment they rent out. For instance, some companies rent out tents and canopies, whereas others specialize in renting bounce houses. Whatever the event, table and chair sets happen to be the most demanded equipment.
If you’re a newcomer, it is better to start renting out items that are more popular or are common to all events. Initially investing in inventory that is not expected to get you quick returns is not a smart move. We recommend starting with the basics and upgrading your inventory as you grow.
Here are a couple of basic options worth considering. You can decide the amount you need to procure based on your initial market research.
Rectangular folding banquet tables
6 ft folding table
Round Folding Tables with Plywood Top
36″ round folding table
48″ round folding table
60″ round folding table
Plywood tops happen to be the most popular among round folding tables. Think about the last time you went to a wedding reception and spotted one! Round plywood tops are normally preferred to rectangular ones.
Folding Chairs (listed in order of popularity)
White Plastic Folding Chairs
Black Plastic Folding Chairs
White Resin Folding Chairs
When it comes to folding chairs, white plastic folding is your best pick as they are quite versatile. You can later upgrade to more durable resin chairs if you like or even add black folding chairs to your fleet to cater to outdoor corporate meetings. White resin chairs are generally the most popular when it comes to outdoor weddings.
Highboy Tables (must-have for cocktail parties, weddings, and bars)
Round Highboy Table with plywood top 30″
Among the three sizes that highboy tables come in, it is best to go for the 30″ ones. Those are regular sized and economical while offering adequate table space.
This should be enough inventory to help you get started. The items listed above are rented out the most by party rental businesses. They are easy to store even in your backyard if that’s where you plan to launch your business from.
Once you’re done procuring your rental fleet, you can develop an online storefront to display the catalog you’re offering. You can also publish online advertisements to market yourself and attract new customers. Look at the number and kind of orders you receive so you can purchase more equipment accordingly.
As you grow your party rental business, you can invest in bigger equipment such as a large tent which can cost you as high as $5,000. If you rent it out for $200 to $400, you are expected to get a hefty ROI after 25 rentals.
Other investments you can line up for later may include linens, chandeliers, dance floors, silverware and flatware, and AV and power equipment. Bounce houses and inflatable slides can cost you $3,000 and above so it is only wise to start with the bare minimum and keep adding to your inventory as you blaze new trails.
Starting slow is your key to winning big
Given the never-ending occasions in today’s age, running a party rental business sure is lucrative. They are particularly profitable once you’ve covered up on your initial capital investment.
When it comes to procuring rental equipment, you need to start slow with the bare minimum and add inventory only as needed. Remember, you need a quick ROI to lay the foundations for your business so you can later establish yourself as a market leader.
Read more: Organize The Best Events in Town with Event Rental Software
About EZRentOut
EZRentOut is the party rental software that helps you track all the seating, lighting, flooring, staging and AV equipment, and props for your events with ease. It also comes equipped with an interactive online portal for your customers to place orders.
