Do you want to start a tuxedo rental company? If YES, here is a complete guide to starting a tuxedo rental business with NO money and no experience.
There are businesses that are worth going for. If you are starting your very first business, it is better to go for a business that you are certain people would need its services or products regularly. A tuxedo 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 grooms and groomsmen would usually source for tuxedos to rent. So, if you are looking for a business to start as an aspiring entrepreneur who has interest in a simple and straightforward business, then one of your options is to open a tuxedo rental business in your city.
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 because it requires basic business skills such as customer service, accounting, bargaining, people cum networking and overall business management skills.
Over and above, if you have decided to start a tuxedo rental business, then you should carry out feasibility studies and also market survey. The service delivery process for a tuxedo rental business is simple and straight forward, especially if you are not involved in other complimentary services within that scope of business.
You can start your tuxedo rental business from a small town in the United States and if you are consistent and creative, it won’t be too long before your brand becomes nationally recognized and your business network spreads across the length and breadth of the United States of America.
Steps to Starting a Tuxedo Rental Business
1. Understand the Industry
Tuxedo rental shop business falls under the Formal Wear & Costume Rental Industry and businesses in this industry mostly engage in 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.
It is important to state that this industry does not include companies that primarily 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 in recent time, as rising external competition and the falling wedding rates 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 wedding rates 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 as long as corporate parties and weddings are organized there.
Statistics has it that the Formal Wear and Costume Rental industry in the United States of America is worth about $500 million, with an estimated growth rate of -o.1 percent between 2012 and 2017. 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 6,599 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 for competition from aspiring investors who would want to launch their own formal wear and costume rental business.
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 the 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 tuxedo rental shop business will continue to blossom because people and organizations will always organize weddings, corporate dinners and parties hence the need to rent tuxedos and other formal wears.
Despite the fact that the industry seems over-saturated, there is still room big enough to accommodate aspiring entrepreneurs who intend opening their own tuxedo rental shop businesses in the United States of America.
Some of the factors that encourage entrepreneurs to start their own tuxedo rental shop business is that the business is easy to set up and can be managed with minimal startup capital and manpower.
The formal wear and costume rental industry is indeed a profitable industry to venture into despite the fact that the entry bar for starting the business is not too difficult to scale through.
The truth is that if a tuxedo rental shop business is packed with designer tuxedos and other corporate wears and is also well 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. Conduct Market Research and Feasibility Studies
- Demographics and Psychographics
The demographic and psychographic composition of those who patronize tuxedo rental shop businesses cut across all males within your shop location who have the financial means, hence the demographic composition for a tuxedo rental shop business is all encompassing.
So, if you are thinking of opening your own tuxedo rental shop business, then you should make your target demographics all encompassing. It should include potential grooms and groomsmen, corporate executives, college students, high school students and businessmen amongst others in the neighborhood where your tuxedo rental shop will be located.
3. Decide Which Niche to Concentrate On
It is important to state that there is no known niche area when it comes to the tuxedo rental shop business since the business is a niche area in the corporate wears and costume rental industry. Every player in this line of business usually rent out tuxedos and other corporate wears.
On the other hand, it is important to state that some tuxedo rental shops may decide to add one or more of the under listed as part of their business offering;
- 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
The Level of Competition in the Industry
The skirmishes that exist in the tuxedo rental shop line of business go outside rivalries with tuxedo rental shops within your location.
You will be expected to contend with any other players in the corporate wears and costume rental industry that is also into renting out tuxedos. So, it will be right to say the competition in the tuxedo rental shop line of business is tough.
The truth is that no matter the level of competition in an industry, if you have done your due diligence and you brand and promote your products or business properly, you will always make headway in the industry. Just ensure that you have quality designer tuxedos and other corporate wears for parties and events and you know how to attract and reach out to your target market.
But over and above, there are several tuxedo rental shops scattered all around the United States and even in the same location where you intend starting yours. So, if you choose to start your own tuxedo rental shop business in the United States, you will definitely meet stiff competition in the business.
Besides, there are larger tuxedo rental shops that determine the trend in the industry and you should be ready to compete with them for customers.
4. Know Your Major Competitors in the Industry
In every industry, there are always brands that are better regarded by customers and the general public than the others. Some of these brands are those that have been in the industry for a long time, while others are best known for how they conduct their businesses and the results they have achieved over the years.
These are some of the leading tuxedo rental shops in the United States of America and in the globe;
- Tailored Brands Inc.
- Taylor Rental of Sebring
- Louie’s Tux Shop
- National Tuxedo Rentals
- The Black Tux
- Tuxedo Avenue (at USA Bridal)
- Men’s Wearhouse
- Mission Tuxedos
- Tuxedo Junction – Marketfair North Shopping Center
- Dante Zeller Tuxedo By Sarno
- Savvi Formalwear
- Jim’s Formal Wear
- Tip Top Tux
- Generation Tux
- Rose Tuxedo
- Ziggy’s Tuxedo & Suits
- The Tux Shop Lynnwood
- Tuxedo by Sarno
- ChazMaTazz Formal Wear
- Vows Bridal & Formals
If you want to launch a business and maximize profits, then you need to ensure that you get your economic and cost analysis right and try as much as possible to adopt best practices in the industry you choose to build a business in.
Tuxedo rental business is not a Green business as you will come across several tuxedo rental shops when you go sourcing for one or when you search through online and offline directories.
So, if you are mapping out your economic analysis, you should carry out thorough market survey and costing of what is required to rent a store and the amount needed to purchase quality designers’ tuxedos and other corporate wears and costumes that are in demand in your location and also the cost to successfully run the business.
If you are considering starting a tuxedo rental business, then your concern should not be limited to the cost of renting a shop and purchasing tuxedos but also on branding and on how to build a robust clientele base. The truth is that if you are able to build a robust clientele base, you are sure going to maximize profits in the business.
5. Decide Whether to Buy a Franchise or Start from Scratch
If you want to start a tuxedo rental business, you would have to start from the scratch because you can hardly get a franchise of a tuxedo rental shop business to buy, and if you do, it will be way too expensive.
Besides starting a tuxedo rental shop business from the scratch is less stressful when compared to other small – scale businesses that usually requires detailed groundwork before launching the business.
With tuxedo rental shop business, you should just try as much as possible to secure a shop facility that is close to a major road, purchase the needed designer tuxedos and other corporate wears and then leverage on every marketing tool within your disposal to market your business.
Please note that most of the big and successful tuxedo rental shops around started from the scratch and they were able to build a solid business brand. It takes dedication, hard work and determination to achieve business success.
Of course you can build your own tuxedo rental shop business brand to become a successful brand with corporate and individual customers in your city and from all across the length and breadth of the United States of America if you choose to open your tuxedo rental shops all across the United States of America.
6. Know the Possible Threats and Challenges You Will Face
If you decide to start your own tuxedo rental shop business today, one of the major challenges you are likely going to face is the presence of well-established tuxedo rental shops and any other players in the corporate wears and costume rental industry who are also renting out tuxedos. The only way to avoid this challenge is to create your own market.
Some other challenges and threats that you are likely going to face is improvement in the economy as tuxedo rental shops and the likes usually struggle to maintain their old customers or even welcome new customers once there is improvement in the economy because people will have enough money to purchase tuxedos as against renting them.
There is nothing you can do as regards these threats and challenges other than to stay positive that things will work well for you.
7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)
When considering starting a tuxedo rental shop business, the legal entity you choose will go a long way to determine how big the business can grow; some tuxedo rental shops design their business for neighborhood market, some for city wide market, while others for national market.
You can either choose a general partnership, limited liability company, or a sole proprietorship for a tuxedo rental business. Ordinarily, sole proprietorship should have been the ideal business structure for a small – scale tuxedo rental business especially if you are just starting out with a moderate start – up capital in a small neighborhood.
But if your intention is to grow the business and have chains of tuxedo rental shops all across the United States of America via franchising, then choosing sole proprietor is not an option for you. Limited Liability Company, LLC or even general partnership will cut it for you.
Setting up an LLC protects you from personal liability. If anything goes wrong in the business, it is only the money that you invested into the limited liability company that will be at risk. It is not so for sole proprietorships and general partnerships.
Limited liability companies are simpler and more flexible to operate and you don’t need a board of directors, shareholders meetings and other managerial formalities.
8. Choose a Catchy Business Name
When it comes to choosing a name for your business, you should be creative because whatever name you choose for your business will go a long way to create a perception of what the business represents.
Usually it is the norm for people to follow the trend in the industry they intend operating from when naming their business. If you are considering starting your own party tuxedo rental shop business, here are some catchy names that you can choose from;
- Sharp Look® Tuxedo Rental Services, Inc.
- The Groomsman™ Tuxedo Rental Service, LLC
- St. Steve™ Corporate Wears and Costumes Rental Services, Inc.
- Corporate Men® Tuxedo Rental Service, LLC
- Jael Clarkson & Family® Corporate Wears and Costume Rental Services, Inc.
- Moses Gomez© Tuxedo Rental Services, Inc.
- Taylor West™ Tuxedo Rental Service, LLC
- Finney Looks™ Tuxedo Rental Services, Inc.
- Hugo James® Tuxedo Rental Service, Inc.
9. Discuss with an Agent to Know the Best Insurance Policies for You
In the United States and in most countries of the world, you can’t operate a business without having some of the basic insurance policy covers that are required by the industry you want to operate from. So, it is important to create a budget for insurance and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your tuxedo rental shop business.
Here are some of the basic insurance covers that you should consider purchasing if you want to start your own tuxedo rental shop business in the United States of America;
- General insurance
- Health insurance
- Liability insurance
- Workers Compensation
- Overhead expense disability insurance
- Business owner’s policy group insurance
- Payment protection insurance
10. Protect your Intellectual Property With Trademark, Copyrights, Patents
If you are considering starting your own tuxedo rental shop business, usually you may not have any need to file for intellectual property protection/trademark.
This is because the nature of the business makes it possible for you to successfully run it without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties. But if you just want to protect your company’s logo and other documents or software that are unique to you or even jingles and media production concepts, then you can go ahead to file for intellectual property protection.
If you want to register your trademark, you are expected to begin the process by filing an application with the USPTO. The final approval of your trademark is subjected to the review of attorneys as required by USPTO.
11. Get the Necessary Professional Certification
When it comes to tuxedo rental shop business, you do not need to have any formal training or special certification before you can be allowed to start a tuxedo rental shop business. All you need is informal training that will expose you to the in and out of tuxedo rental shop business.
On the other hand, if you come across any form of certification that can aid you to effectively manage and grow your tuxedo rental shop business, then by all means try and pursue such certification.
12. Get the Necessary Legal Documents You Need to Operate
The essence of having the necessary documentation in place before launching a business in the United States of America cannot be overemphasized. It is a fact that you cannot successfully run any business in the United States without the proper documentations.
If you do, it won’t be too long before the long hand of the law catches up with you. These are some of the basic legal documents that you are expected to have in place if you want to legally run your own tuxedo rental shop business in the United States of America;
- Certificate of Incorporation
- Business License
- Tax Payer’s ID/Tax Identification Number
- Business Plan
- Copy of license for the warehouse facility and/or a recent inspection report
- Employee Handbook
- Employment Agreement (offer letters)
- Operating Agreement for LLCs
- Insurance Policy
- Company Bylaws
- Memorandum of Understanding (MoU)
- Building License
- Contract Document
13. Raise the Needed Startup Capital
Starting a tuxedo rental shop business can be cost effective especially if you choose to start on a small scale. Securing a standard and well-positioned shop facility, purchasing quality designer tuxedos and other corporate wears are part of what will consume a large chunk of your startup capital.
But if you choose to start the business on a large scale, you would need to go source for fund to finance the business because it is expensive to start a standard large scale tuxedo rental shop business.
When it comes to financing a business, one of the major factors that you should consider is to write a good business plan. If you have a good and workable business plan document in place, you may not have to labor yourself before convincing your bank, investors and your friends to invest in your business.
Here are some of the options you can explore when sourcing for startup capital for your tuxedo rental shop business;
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Selling shares to interested investors
- Applying for Loan from your Bank
- Pitching your business idea and applying for business grants and seed funding from donor organizations and angel investors
- Source for soft loans from your family members and your friends
14. Choose a Suitable Location for your Business
When it comes to choosing a location for your tuxedo rental shop, the rule of thumb is that you should be guided by the demand for tuxedo rentals. Of course, if you are able to secure a central location for your tuxedo rental shop, it will give people easy access to locate your store.
It cannot be overemphasized that the location you chose to open your tuxedo rental shop business is key to the success of the business, hence entrepreneurs are willing to rent or lease a facility in a visible location; a location where the demography consists of people with the required purchasing power and lifestyle.
Most importantly, before choosing a location for your tuxedo rental shop, ensure that you first conduct a thorough feasibility studies and market survey. The possibility of you coming across similar business that just closed shop in the location you want to open yours can’t be ruled out.
These are some of the key factors that you should consider before choosing a location for your tuxedo rental shop;
- The demography of the location
- The demand for tuxedos in the location
- The frequency at which weddings and corporate parties are done in the location
- Accessibility of the location
- The number of tuxedo rental shops and any other businesses in the corporate wears and costume industry in the location
- The local laws and regulations in the community
- Traffic, parking and security
15. Hire Employees for your Technical and Manpower Needs
On the average, there is no special technology or equipment needed to run this type of business except for Point of Sales (POS) Machines, shelves and software applications. You will also need computers, internet facility, telephone, fax machine and office furniture (chairs, tables, and shelves) amongst others and all these can be gotten as fairly used.
As regards leasing or outright purchase of a store facility, the choice is dependent on your financial standing, but the truth is that to be on the safe side, it is advisable to start off with a short – term rent/lease while test running the business in the location.
If things work out as planned, then you go on a long – term lease or outright purchase of the property but if not, then move on and source for other ideal location/facility for such business.
When it comes to hiring employees for a standard tuxedo rental shop business, you should make plans to hire a competent Chief Executive Officer (you can occupy this role), Human Resources Manager, Shop Manager, Sales and Marketing Officer, Accounting Clerk and Cleaners.
On the average, you will need a minimum of 3 to 6 key staff members to run a small scale but standard tuxedo rental shop business.
The Service Delivery Process of the Business
When it comes to the business services process of tuxedo renting, the process is simple and straightforward and can be run on autopilot.
Generally, a tuxedo rental shop lists out the sizes, colors and label of tuxedos and other corporate wears that they have for rent. When a party organizer or customer approaches them, they agree on the price of the tuxedo to be rented, payment is made, and deposit is also made.
The deposit is compulsory because it is used to repair any tuxedo that was rented. In most cases, once the payment and deposit are done, the client tests the tuxedo and if it fits properly, they are taken and then returned as agreed. It is important to state that a tuxedo rental shop may decide to improvise or adopt any business process and structure that will guarantee them efficiency and flexibility.
16. Write a Marketing Plan Packed with ideas & Strategies
Running a business requires that you should be proactive when it comes to marketing your goods or services. If you choose to launch a tuxedo rental shop business, then you must go all out to employ strategies that will help you attract customers or else you will likely struggle with the business because there are well – known brands that determine the market direction for the corporate wears and costumes rental industry.
People and organizations will rent tuxedos and other corporate wears from your store if they know that they are going to get the best and of course value for their money.
As a matter of fact, your marketing strategy should center on swift delivery, quality, pricing and above all excellent customer service. You should ensure that whenever your customers rent tuxedos from you, they will get the best and excellent service.
The truth is that if you are able to put the above stated in place, you won’t struggle to retain your old customers and at the same time win over new customers.
Businesses these days are aware of the power of the internet and which is why they will do all they can to maximize the internet to market their services or products. In other words, a larger percentage of your marketing effort will be directed to internet users. These are some of the marketing ideas and strategies that you can adopt for your tuxedo rental shop business;
- Introduce your tuxedo rental shop by sending introductory letters alongside your brochure to potential grooms and groomsmen, corporate executives, college students, high school students amongst others in the neighborhood where your tuxedo rental shop will be located
- Advertise on the internet on blogs and forums, and also on social media like Twitter, Facebook, LinkedIn to get your message across
- Create a basic website for your business so as to give your business an online presence
- Directly market your products
- Provide discount days for your customers
- Advertise your business in community based newspapers, local TV and radio stations
- List your business on yellow pages ads (local directories)
- Encourage the use of Word of mouth marketing (referrals)
17. Work Out a Reasonable Pricing for your Services & Products
One key factor that will help you rent out your tuxedos at rock bottom prices is to purchase your tuxedos and other corporate wears and costumes directly from the manufacturers in pretty large quantities. The truth is the higher the quantity of items that you purchase directly from the manufacturers, the cheaper you tend to get them.
Another strategy that will help you rent out your tuxedos at the right price is to ensure that you cut operational cost to the barest minimum and channel your efforts towards marketing and promoting your brand name. Aside from the fact that this strategy will help you save cost, it will also help you get the right pricing for your products.
18. Develop Iron-clad Competitive Strategies to Help You Win
The availability of a wide range of tuxedos in your store, your business process and your pricing model are part of what you need to stay competitive in the industry.
Another possible competitive strategy for winning your competitors in this particular industry is to offer free delivery and pickup to all your clients. Over and above, ensure that your organization is well positioned, key members of your team are highly qualified and your tuxedos can favorably compete with some of the best in the industry.
19. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
If you are in business and you are not conscious about boosting you brand awareness and communicating your corporate identity, then you should be ready to take on whatever the society portray your business to be. One of the secrets of larger corporations is that they spend fortunes to boost their brand awareness and communicate their corporate identity.
If your intention of starting a tuxedo rental shop business is to grow the business beyond the city where you are going to be operating from to become a national and international brand by opening chains of tuxedo rental shops and franchising, then you must be ready to spend money on promotion and advertisement of your brand.
No matter the industry you belong to, the truth is that the market is dynamic and it requires consistent brand awareness and brand boosting cum promotion to continue to appeal to your target market. Here are the platforms you can leverage on to boost your brand awareness and create a corporate identity for your tuxedo rental shop;
- Place adverts on both print (newspapers and events and lifestyle magazines) and electronic media platforms
- Leverage on the internet and social media platforms like; Instagram, Facebook, Twitter, YouTube, Google + et al to promote your tuxedo rental shop business
- Install your billboards in strategic locations all around your city or state
- Engage in roadshows from time to time in targeted neighborhoods to create awareness of your tuxedo rental shop
- Distribute your fliers and handbills in target areas
- List your tuxedo rental shop in local directories/yellow pages
- Advertise your tuxedo rental shop in your official website and employ strategies that will help you pull traffic to the site
- Position your Flexi Banners in strategic positions in the location where your tuxedo rental shop is located
- Ensure that all your staff members wear your branded shirts and all your vehicles are well branded with your company logo