You should budget around $13,000 to $50,000 to start a party rental business. Starting and operating a party rental business requires thorough planning and management of expenses.
These costs tend to encompass renting or leasing a property, paying workers’ salaries and utility bills to discovering affordable transportation and delivery methods.
The startup cost for this business can be quite high. You have to purchase all the equipment you need to rent out, and then find a location to house it.
Only one tent will cost thousands of dollars. Party rentals don’t necessarily require a retail space, but you might have to get one to guarantee credibility to would-be customers.
If you don’t have the financial capabilities to rent a retail space, it is possible to store the equipment in a storage facility, and then have appointment-only showings for potential renters.
Party rental businesses are known to help people who are looking to enjoy good times by renting out tents, bars, bouncy houses, karaoke machines, and many more. According to industry reports, the US party rental industry is a $5 billion industry that’s growing as the pandemic recovery continues.
By starting your own party rental company and doing the right things, you could take up a good portion of that market, and make good money.
Factors That Determine the Cost of Opening a Party Rental Business
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This is without doubt one of the biggest expenses that comes with starting this business. You need to have a physical location from where they can operate the business, store your party rental equipment, and attend to customers.
If you decide to lease or rent the business premises, then you have to take into consideration other expenses, such as taxes, maintenance, and utility fees.
In this line of business, utilities are a very important part of your startup expenses. Utilities are essential services that ensure that a business keeps running smoothly, including electricity, water, and gas.
Although the average monthly utility bill for a small business in the United States is around $570, keep in mind that the cost will vary depending on various factors including the size of the business, the specific utilities required, and the location of the business.
To help make your utility costs manageable, consider putting into practice several energy-saving measures, like replacing old light bulbs with energy-efficient LEDs, unplugging equipment that is not in use, and taking advantage of natural light sources when attainable.
Office supplies and equipment
Another valid cost you need to pay attention to is the cost of office supplies and equipment. In the United States, the average monthly cost of office supplies and equipment for small businesses will fall between $200 to $550.
However, note that this amount will vary depending on the size of the business and the type of equipment required. For party rental businesses, a good number of the basic equipment you need include;
- Computers: The cost of a business computer ranges from $500 to $1,500, depending on the specification and the brand.
- Printers and Scanners: The cost of a professional-grade printer starts at $250, and a scanner can cost around $100 to $500.
- Phones: Phone costs can vary depending on the type of phone and services that the business might use.
- Furniture: The cost of furniture will depend on the quality and the brand.
- Office Supplies: The cost of office supplies depends on the type and quantity needed by the business.
This is one of the most significant expenses you will incur when looking to start this business. Note that inventory costs simply entail the expenses that come with the purchase, storage, maintenance, and replacement of items that you rent out.
These items will encompass tables, chairs, linens, tents, decorations, and various tools and equipment. According to industry reports, an average party rental business will invest around $50,000 to $100,000 annually on inventory costs, depending on the size and scale of the operation.
This is without doubt a gigantic investment for a small business, and it necessitates extensive planning and management to guarantee that you can generate adequate revenue to cover these expenses and make a profit.
Insurance is very important particularly to safeguard the business, workers, and customers from accidents or damages. Without the right coverage, a single accident can instigate significant legal and financial implications for the business.
In this line of business, the average annual cost for small business insurance in the United States is around $1,281. However, note that the precise cost of insurance for a party rental business will often depend on factors such as the number of employees, the type of equipment offered, and the location of the business.
Marketing and Advertising
This is very important especially if you would want to attain success in this line of business. It is more or less the way you draw in customers and make them fully conversant with your services.
However, when it comes to advertising costs, the exact amount you invest will depend on factors like the location of your business, target customers, marketing channels, and the duration of your campaign.
For example, Facebook Ads will more or less cost around $0.5 to $2 per click, and Google Ads might as well require a daily budget of $10 or more.
Employee salaries remain another massive expense that comes with starting party rental businesses. You have to understand that the success of a party rental business will depend on the quality of services, and the workers play a significant role in making available quality services.
As such, it is recommended that your workers are well compensated for their time and efforts. Note that the average salary at a party rental business tends to fall within $22,000 to $60,000 per annum, depending on the job title, location, and experience.
Note that the employees in a party rental business include event planners, delivery personnel, setup and teardown crew, and administrative staff.
Transportation and delivery
Transportation and delivery are essential components of any party rental business since your customers will depend on you to deliver their party equipment safely and on time. Howbeit, have it in mind that the exact costs will vary based on distance, weight, and type of equipment.
The average cost for party rental businesses’ transportation and delivery is $150 to $500. Don’t forget to take into consideration other expenses like fuel, insurance, and vehicle maintenance expenses.