Are you about starting a clothing rental company? If YES, here is a complete sample clothing rental business plan template & feasibility report you can use for FREE. Okay, so we have considered all the requirements for starting a clothing rental business. We also took it further by analyzing and drafting a sample clothing rental business marketing plan template backed up by actionable guerrilla marketing ideas for clothing rental businesses. So let’s proceed to the business planning section.
Table of Content
- 2. Executive Summary
- 5. Job Roles and Responsibilities
- 6. SWOT Analysis
- 7. MARKET ANALYSIS
- 13. Startup Expenditure (Budget)
Why Start a Clothing Rental Business?
Businesses that are worth going for, especially if you are starting your first business, is simply to go for a business that you are certain people would need your services or products from time to time.
A clothing rental business falls into this category; you can be certain that there would be corporate dinner parties and wedding ceremonies at least once in a week in your city or town and brides and grooms would usually source for clothes to rent. So, if you are looking for a simple and straightforward business to start, then one of your options is to open a clothing rental business.
One good thing about this type of business is that you don’t need to enroll in a conventional school to learn how to start and run this type of business; it is a business that requires basic business skills such as customer service, accounting, bargaining, networking and of course overall business management skills.
If you have decided to start a clothing rental business, then you should ensure that you carry out feasibility studies and market survey. The service delivery for a clothing rental shop business is simple and straight forward, especially if they are not involved in other complimentary services.
Please find below a comprehensive clothing rental business plan template that can aid you in writing a workable business plan for your business.
A Sample Clothing Rental Business Plan Template
1. Industry Overview
Clothing rental business falls under the Formal Wear & Costume Rental Industry and businesses in this industry engage in renting out women’s formal wear (e.g. bridal wear and gown), men’s formal wear (e.g. tuxedo and suit), costume, motion picture wardrobe and costume, theatrical wardrobe and costume and other clothing to consumers. It is important to state that this industry does not include companies that sell these items.
If you are a close watcher of the Formal Wear and Costume Rental industry, you will agree that the industry has lost momentum, as rising external competition and the falling marriage rate have caused industry revenue to decline. Additionally, inexpensive imports are diverting consumers away from rental services by allowing them to purchase the same goods at little more than the cost of renting.
Going forward, the revenue generated in this industry is expected to continue declining as a steep annualized decline in marriage rate and increased online-based competition will continue to push unprofitable companies to exit the industry.
The Formal Wear and Costume Rental Industry is indeed a large and vibrant industry not only in the united states of America and but also in most developed countries of the world. Statistics has it that the industry in the United States of America, is worth about $506 million, with an estimated growth rate of – 0.7 percent between 2013 and 2018.
There are about 1,582 registered and licensed formal wear and costume rental businesses in the United States and they are responsible for employing about 6,900 people. In the United States, only Tailor Brands Inc. can boast of having a lion market share in the industry. The industry is still very much open to competition from aspiring investors.
According to report recently published by IBISWORLD, concentration within the Formal Wear and Costume Rental industry is moderate, with the four largest industry players accounting for 40.1 percent of total industry revenue. The report shows that Tailored Brands Inc. is the only major player in the industry and accounts for 33.9 percent of market share in 2017.
The report shows that its market share has increased significantly over the five years to 2017 due to advantageous partnerships with David’s Bridal, Vera Wang, TheKnot.com and Macy’s, as well as the 2014 acquisition of Jos. A. Bank.
Other significant operators in the industry, such as Friar Tux Shop and Al’s Formal Wear, are regional chains that account for less than 5.0 percent of market share. The remaining formal wear and costume rental companies are either small businesses with one or a couple of locations, or very small non – employing operators.
The clothing rental shop business will continue to blossom because they will always be weddings, corporate dinners and parties hence the need to rent tuxedos and other formal wears. Some of the factors that encourage entrepreneurs to start their own clothing rental business could be that the business is easy to set up and manage with minimal startup capital and manpower.
The truth is that if a cloth rental shop is stocked with designers’ tuxedos, costumes and other corporate wears and also positioned in an environment with the right demography, they will sure attract regular clients and their items will be well booked all through the year.
2. Executive Summary
St. Steve™ Clothing Rental Services, Inc. is a registered corporate wear and costume rental company that will be located in West Palm Beach, Florida – United States of America. We chose to operate in this city because we know that our clothing rental services will be in high demand due to the growing number of events in this city that will warrant people renting clothes and costumes.
St. Steve™ Clothing Rental Services, Inc. will engage in renting out women’s formal wear (e.g. bridal wear and gown), men’s formal wear (e.g. tuxedo and suit), costume rental, motion picture wardrobe and costume, theatrical wardrobe and costume and other clothing to consumers.
Although our intention of starting St. Steve™ Clothing Rental Services, Inc. is to offer only the above stated services, but we will not close our doors to diversification (additional services) as long as it does not affect our core services.
We are quite optimistic that our values, quality clothes and costumes and of course the quality of service offering will help us drive our clothing rental business to enviable heights and also help us attract the number of clients that will make the business profitable. We are dedicated to establishing good business relationship with our clients giving them value for their money and reasons for them to rent our clothes and costumes over and over again.
Our overall business goal is to position St. Steve™ Clothing Rental Services, Inc. to become one of the leading clothing rental brands in the United States of America within the first 10 years of operation. This might look too tall a dream but we are optimistic that this will surely come to pass because we have done our research and feasibility studies.
Our client’s best interest will always come first, and everything we do will be guided by our values and professional ethics. We will ensure that we hold ourselves accountable to the highest standards by meeting our client’s needs precisely and completely.
St. Steve™ Clothing Rental Services, Inc. is owned and managed by Steve Nelson and his immediate family members. He is a notable figure in the fashion industry in Florida. Aside from this new clothing rental business, the family owns a boutique business all across major cities in the United States of America.
3. Our Products and Services
St. Steve™ Clothing Rental Services, Inc. offers a wide range of services that revolves around the formal wear and costume rental industry. We intend giving our customers reasons to always rent our clothes and costumes which is why we have customized our services.
Our intention of starting our clothing rental services company is to favorable compete in the industry and of course to make profits and we will do all that is permitted by the law in the United States of America to achieve our aim. Our business offerings are listed below;
- Women’s formal wear (e.g. bridal wear and gown) rental
- Men’s formal wear (e.g. tuxedo and suit) rental
- Costume rental
- Motion picture wardrobe and costume rental
- Theatrical wardrobe and costume rental
4. Our Mission and Vision Statement
- Our Vision is to become the number one clothing rental company in the whole of Florida with active presence in major cities in the United States of America.
- Our mission as a clothing rental company is to develop a highly successful, profitable all-round clothing rental business that will provide quality services in our community and to become a standard for an ideal clothing rental business in the State of Florida.
Our Business Structure
We are quite aware that the success of any business lies in the foundation on which the business is built on, which is why we have decided to build our clothing rental company on the right business foundation.
As a matter of fact, we are set out to build a clothing rental business that will compete favorably with leading brands in the industry. We want to build a business of dedicated workforce who will ensure that our customers are satisfied and they get value for their money.
We aware that it takes a business with the right employees and structure to achieve all what we have set to achieve, which is why will be putting structures and standard operating processes in place that will help us deliver excellent services and run the business on auto pilot. The success of our clothing rental business will be anchored on the team not on any individual.
With our service offerings, we are only expected to employ more than it is required to run a conventional clothing rental business. Definitely, we will have various employees to man the various job roles available in St. Steve™ Clothing Rental Services, Inc.
St. Steve™ Clothing Rental Services, Inc. will employ professionals to occupy the following positions;
- Manager (Owner)
- Marketing and Sales Executive
- Client Service Executive
- Dry Cleaners (6)
5. Job Roles and Responsibilities
- Responsible for providing direction for the business
- Creates, communicates, and implements the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
- Answerable for fixing prices and signing business deals and payment of salaries
- Responsible for signing checks and documents on behalf of the company
- Evaluates the success of the organization
- Responsible for managing the daily activities in the organization
- Ensures that the shop facility is in tip top shape and conducive enough to welcome customers
- Formulates budget and reports for the organization
- Regularly hold meetings with key stakeholders (clients and member of the board) to review the effectiveness of the business Policies, Procedures and Processes
- Maintains office supplies by checking stocks; placing and expediting orders; evaluating new products.
- Oversees the smooth running of the daily activities of organization.
Marketing and Sales Executive
- Identifies, prioritizes, and reaches out to new clients, and business opportunities et al
- Identifies development opportunities; follows up on development leads and contacts; participates in the structuring and financing of expansion
- Develops, executes and evaluates new plans for expanding increase sales
- Documents all customer contact and information
- Represents St. Steve™ Clothing Rental Services, Inc. in strategic meetings
- Helps to increase sales and growth for St. Steve™ Clothing Rental Services, Inc.
- Liable for preparing financial reports, budgets, and financial statements for the organization
- Provides managements with financial analyses, development budgets, and accounting reports
- Responsible for financial forecasting and risks analysis.
- Performs cash management, general ledger accounting, and financial reporting for the organization
- Responsible for developing and managing financial systems and policies
- In charge of administering payrolls
- Ensures compliance with taxation legislation
- Handles all financial transactions for St. Steve™ Clothing Rental Services, Inc.
- Serves as internal auditor for St. Steve™ Clothing Rental Services, Inc.
Client Service Executive
- Welcomes clients and visitors by greeting them in person or on the telephone; answering or directing inquiries.
- Ensures that all contacts with clients (e-mail, walk-In center, SMS or phone) provides the client with a personalized customer service experience of the highest level
- Through interaction with clients on the phone, uses every opportunity to build client’s interest in the company’s products and services
- Manages administrative duties assigned by the manager in an effective and timely manner
- Consistently stays abreast of any new information on the organizations’ products and, promotional campaigns etc. to ensure accurate and helpful information is supplied to clients when they make enquiries
Dry Cleaners (6):
- Responsible for washing and ironing clothes and costumes
- Maintains a clean working area by sweeping, vacuuming, dusting, cleaning of glass doors and windows, etc. if required.
- Ensures that toiletries and supplies don’t run out of stock
- Handles any other duty as assigned by the manager.
6. SWOT Analysis
We are building a standard clothing rental services business with variety of complimentary services which is why we have decided to subject our business idea (company) to SWOT Analysis. Ordinarily we can successfully run a normal clothing rental business without going through the protocol of setting up a new business, but because of the nature of the clothing rental business we want to establish and of course the huge startup capital involved, we don’t have any option other than to follow due process.
We hired the services of an HR and Business consultant with bias in startups to help us conduct SWOT analysis for our company and she did a pretty job for us. Here is a of the result we got from the SWOT analysis that was conducted on behalf of St. Steve™ Clothing Rental Services, Inc.;
Aside from the wide range of clothes and costumes from different designers under our rental services, St. Steve™ Clothing Rental Services, Inc. is centrally located in a densely populated business and residential estate in West Palm Beach – Florida; our location is in fact one of our major strength. Another strength that counts for us is the power of our team. We have a team of experts in the formal wear and costume rental industry.
St. Steve™ Clothing Rental Services, Inc. is owned by an individual (family), and we may not have the financial muscle to sustain the kind of publicity we want to give our business. As a new business, we are also quite aware that it will take time for us to build trust with our clients.
We are centrally located in one of the busiest areas in West Palm Beach, Florida and we are open to all the available opportunities that the city has to offer. Our business concept also positioned us to be a one stop shop in the clothing rental business.
The truth is that there are no standard clothing rental services within the area where ours is going to be located; the closest clothing rental services company to our proposed location is about 6 miles away. In a nutshell, we do not have any direct competition within our target market area.
Some of the threats that are likely going to confront St. Steve™ Clothing Rental Services, Inc. are unfavorable government policies, seasonal fluctuations, demographic/social factors, downturn in the economy which is likely going to affect consumers spending and of course emergence of new competitors in our location.
7. MARKET ANALYSIS
- Market Trends
If you are conversant with one of the latest trends in the clothing rental industry, you will note that more people now rent clothes and costumes via mobile application, and other internet access rather than visiting the office. Clothing and costumes rental mobile application usage has seen an increment in recent time.
The business is also segmented into organized and unorganized labor, with the organized labor expected to provide the highest incremental opportunity going forward.
Please note that import penetration measures the portion of domestic demand that is captured by imports. An increase in low-cost imports enables consumers to purchase formal wear for a marginally higher rate than renting it. Import penetration is expected to increase over 2018, representing a potential threat to the industry.
The number of adults in the population affects demand for formal wear and costume rental. In particular, adults aged 20 to 65 are a key demographic for spending on formal wear rentals, as this age group accounts for almost 80.0 percent of industry revenue. The number of adults aged 20 to 64 is expected to increase in 2018, representing a potential opportunity for the industry.
Another notable trend in the industry is that most clothing rental companies in the bid to survive the recent global economic meltdown included additional services to their core service offerings.
8. Our Target Market
Before choosing a location for our clothing rental services, we conducted our feasibility studies and market survey and we were able to identify those who will benefit greatly from our service offerings.
The demographic component of those who need the services of clothing rental services spreads across the public sector, the organized private sector, and individuals from different strata of the society and from all walks of life. Below is a list of the people and organizations that our clothing rental services is designed for;
- Corporate Executives
- Movie producers
Clothing rental is an easy to set up business that does not require formal training; anybody can set a clothing rental services business if they have the required startup capital. It means that the possibility of such businesses springing up in our location is high. We aware of this which is why we decided to come up with a business concept that will position us to become the leader in West Palm Beach – Florida.
We can confidently say that the location of our clothing rental business will definitely count as a positive for us amongst any competitor that might start a clothing rental business in same location.
For the time being, St. Steve™ Clothing Rental Services, Inc. has no real competitors that can compete with our wide range of clothes and costumes from different designers et al. Our customer service will be customized to meet the needs of all our customers.
Lastly, all our employees will be well taken care of, and their welfare package will be among the best within our category in the industry. It will enable them to be more than willing to build the business with us and help deliver our set goals and achieve all our business aims and objectives.
9. SALES AND MARKETING STRATEGY
- Marketing Strategy and Sales Strategy
The marketing strategy for St. Steve™ Clothing Rental Services, Inc. is going to be driven by wide range of clothes and costumes we have, excellent customer service, honesty and quality service delivery. We will ensure that we build a loyal customer base. We want to drive sales via the output of our services and via referral from our satisfied customers.
Our sales and marketing team will be recruited based on their vast experience in the industry and they will be trained on a regular basis so as to be well equipped to meet their targets and the overall goal of St. Steve™ Clothing Rental Services, Inc.
Our goal is to grow St. Steve™ Clothing Rental Services, Inc. to become the leading clothing rental company in West Palm Beach – Florida which is why we have mapped out strategies that will help us take advantage of the available market.
St. Steve™ Clothing Rental Services, Inc. is set to make use of the following marketing and sales strategies to attract clients;
- Introduce our clothing rental services business by sending introductory letters alongside our brochure to corporate organizations, movie makers, households and key stake holders in West Palm Beach – Florida
- Print out fliers and business cards and strategically drop them in offices, libraries, public facilities, airports and train stations et al.
- Use friends and family to spread word about our business
- Post information about our company and the services we offer on bulletin boards in places like schools, libraries, and local coffee shops et al
- Place a small or classified advertisement in the newspaper, or local publication about our company and the services we offer
- Leverage on referral networks such as agencies that will attract clients who would need our customized services
- Advertise our clothing rental services company in relevant magazines, newspapers, TV and radio stations.
- Attend relevant expos, seminars, and business fairs et al to market our services
- Engage in direct marketing approach
- Encourage the use of Word of mouth marketing from loyal and satisfied clients
- Join local chambers of commerce and industry to market our services.
Sources of Income
St. Steve™ Clothing Rental Services, Inc. is established with the aim of maximizing profits in the industry and we are going to ensure that we do all it takes to attract clients on a regular basis. St. Steve™ Clothing Rental Services, Inc. will generate income by offering the following clothing rental services and other related services;
- Women’s formal wear (e.g. bridal wear and gown) rental
- Men’s formal wear (e.g. tuxedo and suit) rental
- Costume rental
- Motion picture wardrobe and costume rental
- Theatrical wardrobe and costume rental
10. Sales Forecast
We are well positioned to take on the available market in West Palm Beach – Florida and we are quite optimistic that we will meet our set target of generating enough income/profits from our first six months of operation and grow our business and our clientele base.
We have been able to examine the clothing rental services market, we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. Below is the sales projection for St. Steve™ Clothing Rental Services, Inc., it is based on the location of our business and of course the wide range of related services that we will be offering;
- First Fiscal Year: $150,000
- Second Fiscal Year: $200,000
- Third Fiscal Year: $250,000
N.B: This projection was done based on what is obtainable in the clothing rental industry and with the assumption that there won’t be any major economic meltdown and there won’t be any major competitor offering same services as we do within same location. Please note that the above projection might be lower and at the same time it might be higher.
11. Publicity and Advertising Strategy
St. Steve™ Clothing Rental Services, Inc. is set to create a standard for clothing rental services in West Palm Beach – Florida, which is why we will go all the way to adopt and apply best practices to promote our clothing rental business.
Good enough there is no hard and fast rule on how to advertise or promote a clothing rental services business. Here are the platforms we intend leveraging on to promote and advertise St. Steve™ Clothing Rental Services, Inc.;
- Encourage our loyal customers to help us use Word of Mouth mode of advertisement (referrals)
- Advertise our clothing rental services business in relevant magazines, local newspaper, local TV and radio stations
- Promote our business online via our official website
- List our business on local directories (yellow pages)
- Sponsor relevant community programs
- Leverage on the internet and social media platforms like; Instagram, Facebook, twitter, et al to promote our brand
- Install our billboards in strategic locations in and around West Palm Beach – Florida
- Leverage on direct coupon mailing approach
- Engage in roadshow from time to time in target communities
- Distribute our fliers and handbills in target area
- Ensure that all our staff members wear our branded shirts and all our official vehicles are well branded with our company logo et al.
12. Our Pricing Strategy
Our pricing system is going to be based on what is obtainable in the clothing rental industry, we don’t intend to charge more and we don’t intend to charge less than our competitors are offering in West Palm Beach – Florida. Be that as it may, we have put plans in place to offer discount services once in a while and also to reward our loyal customers especially when they refer clients to us.
The prices of our services will be same as what is obtainable in the open market.
- Payment Options
The payment policy adopted by St. Steve™ Clothing Rental Services, Inc. is all inclusive because we are quite aware that different customers prefer different payment options as it suits them but at the same time, we will ensure that we abide by the financial rules and regulation of the United States of America.
Here are the payment options that St. Steve™ Clothing Rental Services, Inc. will make available to her clients;
- Payment via bank transfer
- Payment with cash
- Payment via credit cards
- Payment via online bank transfer
- Payment via check
In view of the above, we have chosen banking platforms that will enable our client make payment for renting our clothes and costumes without any stress on their part. Our bank account numbers will be made available on our website and promotional materials to clients.
13. Startup Expenditure (Budget)
We have been able to pull cash that will be enough for us to successfully launch a standard clothing rental company with a wide range of clothes and costumes from different designers. These are the key areas where we will spend our startup capital on;
- The total fee for incorporating the Business in the United States of America- $750.
- The budget for basic insurance policy covers, permits and business license – $2,500
- The amount needed to acquire a suitable facility that will accommodate our laundry (Re – Construction of the facility inclusive) – $80,000.
- The cost for equipping the office (computers, software applications, printers, fax machines, furniture, telephones, filing cabins, safety gadgets and electronics et al) – $ 5,000
- The cost of launching an official website – $600
- The cost for the purchase of a wide range of clothes and costumes – $100,000
- The cost for the purchase of a delivery van – $5,000
- Budget for paying at least 4 employees for 2 months plus utility bills – $30,000
- Additional Expenditure (Business cards, Signage, Adverts and Promotions et al) – $2,500
- Miscellaneous: $5,000
Going by the report from the market research and feasibility studies conducted, we will need about two hundred and fifty thousand (250,000) U.S. dollars to successfully set up a medium scale but standard clothing rental business firm in the United States of America.
Generating Funds/Startup St. Steve™ Clothing Rental Services, Inc.
St. Steve™ Clothing Rental Services, Inc. will be owned and managed by Steve Nelson and his immediate family members. They decided to restrict the sourcing of the startup capital for the business to just three major sources.
- Generate part of the startup capital from personal savings and sale of his stocks
- Generate part of the startup capital from friends and other extended family members
- Generate a larger chunk of the startup capital from the bank (loan facility).
N.B: We have been able to generate about $100,000 (Personal savings $80,000 and soft loan from family members $20,000) and we are at the final stages of obtaining a loan facility of $150,000 from our bank. All the papers and documents have been duly signed and submitted, the loan has been approved and any moment from now our account will be credited.
14. Sustainability and Expansion Strategy
It is an established fact that the future of a business lies in the number of loyal customers that they have, the capacity and competence of their employees, their investment strategy and the business structure. If all of these factors are missing from a business then it won’t be too long before the business closes shop.
One of our major goals of starting St. Steve™ Clothing Rental Services, Inc. is to build a business that will survive off its own cash flow without the need for injecting finance from external sources once the business is officially running.
We know that one of the ways of gaining approval and winning customers over is to rent out our clothes and costumes a little bit cheaper than what is obtainable in the market and we are prepared to survive on lower profit margin for a while.
St. Steve™ Clothing Rental Services, Inc. will make sure that the right foundation, structures and standard operating processes are put in place to ensure that our staff welfare are well taken of. Our company’s corporate culture is designed to drive our business to greater heights and training and retraining of our workforce is at the top burner of our business strategy.
As a matter of fact, profit-sharing arrangement will be made available to all our management staff and it will be based on their performance for a period of five years or more as determined by the board of the organization. We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.
Check List / Milestone
- Business Name Availability Check: Completed
- Business Registration: Completed
- Opening of Corporate Bank Accounts: Completed
- Securing Point of Sales (POS) Machines: Completed
- Opening Mobile Money Accounts: Completed
- Opening Online Payment Platforms: Completed
- Application and Obtaining Tax Payer’s ID: In Progress
- Application for business license and permit: Completed
- Purchase of Insurance for the Business: Completed
- Acquiring facility and remodeling the facility: In Progress
- Conducting Feasibility Studies: Completed
- Generating capital from family members: Completed
- Applications for Loan from the bank: In Progress
- Writing of Business Plan: Completed
- Drafting of Employee’s Handbook: Completed
- Drafting of Contract Documents and other relevant Legal Documents: In Progress
- Design of The Company’s Logo: Completed
- Printing of Packaging and Promotional Materials: In Progress
- Recruitment of employees: In Progress
- Purchase of the needed office equipment, electronic appliances, office appliances and bar accessories: In progress
- Purchase of a wide range of clothing – In Progress
- Creating Official Website for the Company: Completed
- Creating Awareness for the business both online and in the neighborhood: In Progress
- Health and Safety and Fire Safety Arrangement (License): Secured
- Opening party/launching party planning: In Progress
- Establishing business relationship with vendors – event planners, wedding planners, movie makers and theater managers et al: In Progress