A party rental service helps people add a little more spice to their events. Children’s birthday parties are made more fun with a bouncy house, fundraisersmake more of a splash with a dunk tank, and weddings get more elegant with a styled tent. Party rental businesses help hosts and hostesses everywhere create lasting memories for themselves and their guests.
There is more to starting a business than just registering it with the state. We have put together this simple guide to starting your party rental business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
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Costs can be quite high. You’ll need to buy all of the equipment to start, and then find a place to house it. Just a single tent can cost thousands of dollars. Party rentals don’t necessarily need a retail space, but you may need one to establish credibility to would-be customers. If you can’t afford to rent a retail space, you can store the equipment in a storage facility, and then have appointment-onlyshowingsto potential renters.
The target market depends on where you’re located. If you’re operating in or near a high-income neighborhood, then your clients will likely be homeowners who throw elaborate events for themselves and their loved ones. If you’re in a middle-class neighborhood, you may find that your clientele are the larger organizations (e.g., schools, the VA, community boards, etc.) holding majorgatheringsfrom fundraisers to festivals.
Party rentals make money by purchasing equipment at wholesale prices and then renting that equipment out for a set fee. Renters willnormallypay a deposit or leave their credit card information to cover any accidental or intentional damage the equipment may suffer while the renter has it in their possession.
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This is heavily dependent on where you work. Check rates in your area to see what other businesses are charging before you set your fees in stone. In Michigan, a 20 x 20 foot wedding tent costs $3500 dollars to start and rents for about $225 per weekend. In a wealthier city, you may be able tocharge double this amount.
Your profit is determined by how long your equipment lasts, and how much you charge for each rental. In the case of the wedding tent, you wouldneedto rent a $3500 tent (at $225 a weekend) for at least 16 weekends before you started seeing a profit. However, seeing as how a wedding tent can handle far more than 17 weekends, then you enjoy practically unlimited profit after that.
Party rental businesses can considerbranchingout into everything that an outdoor event may need. From portable toilets to caterers/bartenders, there's a lot of needs to be met for the many party throwers of the world.
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Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Party Rental Business Name Generator
If you operate a sole proprietorship, you might want to operate under a business name other than your own name. Visit our DBA guide to learn more.
Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your party rental business is sued.
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You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.
Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services. You can choose to hire a registered agent or act as your own.
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
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Learn how to get an EIN in our What is an EIN guide or find your existing EIN using our EIN lookup guide.
Depending on which business structure you choose, you might have different options for how your business will be taxed. For example, some LLCs could benefit from being taxed as an S corporation (S corp).
There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.
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When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Additionally, learning how to build business credit can help you get credit cards and other financing in your business's name (instead of yours), better interest rates, higher lines of credit, and more.
Net 30 accounts are used to establish and build business credit as well as increase business cash flow. With a net 30 account, businesses buy goods and repay the full balance within a 30-day term.
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NetMany net 30 credit vendors report to the major business credit bureaus (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how businesses build business credit so they can qualify for credit cards and other lines of credit.
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
Certain state permits and licenses may be needed to operate a party rental business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits .
How To Evaluate Potential Investments In New Party Rental Equipment
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
Businesses operating out of a physical location typically require a Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws and government regulations have been met.
Party rental businesses should require clients to sign a services agreement before starting a new project. This agreement should clarify client expectations and minimize risk of legal disputes by setting out payment terms and conditions, service level expectations, and intellectual property ownership.
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Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.
There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.
Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.
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Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners, we'll give you helpful tips and advice for creating the best unique logo for your business.
If you already have a logo, you can also add it to a QR code with our Free QR Code Generator. Choose from 13 QR code types to create a code for your business cards and publications, or to help spread awareness for your new website.
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The best way to promote yourself is to start networking with the major organizations—even if your primary market is personal parties. The more you make yourself well known to the party planners of the major events, the more likely it is your name will start to trickle down to the home planners inthearea. In addition to forming personal relationships, create a professional website built with the most popular search terms in mind. Once you know what the big draws are in your area (e.g., sporting equipment, luxury toys, etc.), then you can feature those items prominently on your website to hook more people to your services.
Excellent customer service and quality equipment will attract people back to you. Ensure all deliveries are on time, and that each item is delivered aspromised.
Still unsure about what kind of business you want to start? Check out the latest Small Business Trends to help inspire you.
Start Your Own Tent / Party Rental Business.
While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.
Using our website building guides, the process will be simple and painless and shouldn’t take you any longer than 2-3 hours to complete.
Getting a phone set up
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