How to Start a Party Rental Business in 13 Steps

Starting your party rental business? Here are the most vital considerations:

1. Services — Decide on the range of services you will offer, such as delivery, setup, and teardown of rental items. Offer additional services like event planning and on-site support to enhance your value proposition.
2. Specialization — Consider offering specialized services like themed party packages, corporate event setups, or wedding rentals to attract a wider range of clients.
3. Rental inventory — Invest in a diverse range of high-quality rental items, such as tables, chairs, tents, linens, tableware, lighting, sound systems, and decor. Ensure your inventory caters to different types of events and customer preferences.
4. Storage — Set up a storage facility to keep your rental items organized and well-maintained.
5. Vehicles — Invest in reliable delivery vehicles, such as trucks or vans, to transport rental items to and from events. Ensure your vehicles are well-maintained and equipped for safe transportation.
6. Register your business — A limited liability company (LLC) is the best legal structure for new businesses because it is fast and simple. Form your business immediately using ZenBusiness LLC formation service or choose one of the top services available.
7. Legal business aspects — Register for taxes, open a business bank account, and get an EIN.
8. Online presence — Create a professional website with detailed information about your services, rental inventory, pricing, and contact information. Get listed on Google Business and Yelp and encourage positive reviews.
9. Social media — Use platforms like Instagram, Pinterest, and Facebook to showcase your inventory.

Step 1: Decide if the Business Is Right for You

Pros and cons

Starting a party rental business has pros and cons to consider before deciding if it’s the right path for you.

Party rental industry trends

Industry size and growth

• Industry size and past growth – The US party supply rental market is worth more than $5 billion. It had steadily grown in the five years prior to the pandemic.((​​https://www.ibisworld.com/industry-statistics/market-size/party-supply-rental-united-states/)) 
• Growth forecast – The market is expected to recover strongly from the pandemic and grow more than 16% in 2022.
• Number of businesses – There are nearly 10,000 party supply rental businesses in the US.((https://www.ibisworld.com/industry-statistics/number-of-businesses/party-supply-rental-united-states/)) 
• Number of people employed – The industry employs more than 50,000 people.((https://www.ibisworld.com/industry-statistics/employment/party-supply-rental-united-states/))

Trends and challenges

Trends in the industry include:

• Demand in 2022 is expected to have a go-big mentality, with high-end big impact items being sought. Outdoor events are expected to be more common, presenting an opportunity to specialize in tents, outdoor furniture, and other items.
• Rental décor, such as decorative backdrops, is becoming more common, in addition to more functional items.

The industry is also experiencing some challenges, which include:

• Since outdoor events are trending and indoor activities for groups are still somewhat on hold, the party rental business is experiencing higher than usual seasonality.
• The continuing uncertainty caused by the pandemic offers a challenge for party rental businesses as people may continue to postpone events or cancel at the last minute.

How much does it cost to start a party rental business?

Startup costs for a party rental business range from about $13,000 to $50,000. Costs include purchasing rental items, renting a storage facility, and making a down payment on a truck to transport the items. Your costs will depend on which items you already have, and which you’ll need to start your business. 

You’ll need a handful of items to successfully launch your party rental business, including: 

• Tents, tablecloths, bar, bouncy houses, karaoke machine, games
• Truck, such as a box truck, to transport large items

Learn more about starting your own karaoke business. 

Start-up Costs	Ballpark Range	Average
Setting up a business name and corporation	$150 - $200	$175
Business licenses and permits	$100 - $300	$200
Insurance	$100-$300	$200
Business cards and brochures	$200 - $300	$250
Website setup	$1,000 - $3,000	$2,000
Items to rent	$5,000 - $30,000	$17,500
Storage facility rental deposit	$2,000 - $5,000	$3,500
Truck to transport items down payment	$5,000 - $10,000	$7,500
Total	$13,550 - $49,100	$31,325

How much can you earn from a party rental business?

Tent rental averages about $500 per day, while bounce house rentals run about $300 per day. You’ll need workers to assist with setup, so your profit margin, if you’re running your business from home, should be about 50%. This will assume that your average event price is about $1,000.

In your first year or two, you could work from home and do an average of one event per week, bringing in $52,000 in annual revenue. This would mean $26,000 in profit, assuming that 50% margin. As your brand gains recognition, sales could climb to 6 events per week. If you have acquired more items, your average event price might be $2,500. At this stage, you would rent an office space and hire additional staff, reducing your profit margin to around 20%. With expected annual revenue of $780,000, you would make about $156,000.

What barriers to entry are there?

There are a few barriers to entry for a party rental business. Your biggest challenges will be:

• The cost of your rental items, a storage space, and a truck
• Stiff competition from established companies

Step 2: Hone Your Idea

Now that you know what’s involved in starting a party rental business, it’s a good idea to hone your concept in preparation to enter a competitive market. 

Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.

Why? Identify an opportunity

Research party rental businesses in your area to examine their products and services, price points, and customer reviews, as well as what sells best. You’re looking for a market gap to fill. For instance, maybe the local market is missing a bar and barware rental business. 

This could jumpstart your word-of-mouth marketing and attract clients right away. 

What? Determine your products or services

Your products and services will depend on what you decide to specialize in and what items you’re able to acquire. Your services will at least include delivery, setup and pickup of items.

How much should you charge for party rental items?

Tent rentals cost about $500 per day. Bouncy houses run about $300 per day, but can be more depending on size and features. Other items vary in price. You’ll need staff to help with delivery, setup, and pickup, so if you run the business from home you should aim for a profit margin of about 50%.

Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up and final price point. Remember, the price you use at launch should be subject to change if warranted by the market.

Who? Identify your target market

Your target market will depend on the type of events you decide to specialize in. It could be companies if you decide to do corporate events, or parents if you decide to do birthday parties. Either way, the target market is going to be more established people who can afford party rental items so you can find them on Facebook or LinkedIn.

Where? Choose your business premises

In the early stages, you may want to run your business from home to keep costs low. But as your business grows, you’ll likely need to hire workers for various roles and may need to rent out an office. Find commercial space to rent in your area on sites such as Craigslist, Crexi, and Instant Offices.

When choosing a commercial space, you may want to follow these rules of thumb:

• Central location accessible via public transport
• Ventilated and spacious, with good natural light
• Flexible lease that can be extended as your business grows
• Ready-to-use space with no major renovations or repairs needed

Step 3: Brainstorm a Party Rental Business Name

Here are some ideas for brainstorming your business name:

• Short, unique, and catchy names tend to stand out
• Names that are easy to say and spell tend to do better 
• Name should be relevant to your product or service offerings
• Ask around — family, friends, colleagues, social media — for suggestions
• Including keywords, such as “party rentals” or “party tent rentals”, boosts SEO
• Name should allow for expansion, for ex: “All Occasion Rentals” over “Photo Booth Fun Rentals”
• A location-based name can help establish a strong connection with your local community and help with the SEO but might hinder future expansion

Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool below. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these. 

Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that sets your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.

Step 4: Create a Party Rental Business Plan

Here are the key components of a business plan:

• Executive Summary: A brief summary of your party rental business plan, highlighting key points and goals.
• Business Overview: A concise description of your party rental business, including its mission, vision, and location.
• Product and Services: Explanation of the items and services you’ll offer for rent, such as party supplies, equipment, and event planning assistance.
• Market Analysis: An examination of your target market, including demographics, size, and potential demand for your rental services.
• Competitive Analysis: An assessment of your competitors in the party rental industry, highlighting their strengths and weaknesses.
• Sales and Marketing: Your strategies for promoting your business, reaching your target audience, and generating sales.
• Management Team: An introduction to the key individuals involved in running the business and their roles.
• Operations Plan: Details on how your party rental business will run day-to-day, covering inventory management, logistics, and customer service.
• Financial Plan: Financial projections, including income statements, cash flow, and balance sheets, to demonstrate the viability of your business.
• Appendix: Supplementary materials, such as market research data, resumes of key team members, and additional documentation to support your business plan.

If you’ve never created a business plan, it can be an intimidating task. You might consider finding and hiring a business plan specialist to create a top-notch business plan for you.

Step 5: Register Your Business

Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business! 

Choose where to register your company

Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you are planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to party rental businesses. 

If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state. 

Choose your business structure

Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your party rental business will shape your taxes, personal liability, and business registration requirements, so choose wisely. 

Here are the main options:

• Sole Proprietorship – The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
• General Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
• Limited Liability Company (LLC) – Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts.
• C Corp – Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation.
• S Corp – An S-Corporation refers to the tax classification of the business but is not a business entity. An S-Corp can be either a corporation or an LLC, which just need to elect to be an S-Corp for tax status. In an S-Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.

We recommend that new business owners choose an LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your Articles of Organization and be on hand to answer any questions you might have. 

Step 6: Register for Taxes

The final step before you’re able to pay taxes is getting an Employer Identification Number, or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN. 

Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.

It is important to consult an accountant or other professional to help you with your taxes to ensure you are completing them correctly.

Step 7: Fund your Business

Securing financing is your next step and there are plenty of ways to raise capital:

• Bank loans: This is the most common method but getting approved requires a rock-solid business plan and strong credit history.
• SBA-guaranteed loans: The Small Business Administration can act as guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan.
• Government grants: A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
• Friends and Family: Reach out to friends and family to provide a business loan or investment in your concept. It’s a good idea to have legal advice when doing so because SEC regulations apply.
• Crowdfunding: Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund your vision. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business.
• Personal: Self-fund your business via your savings or the sale of property or other assets.

Bank and SBA loans are probably the best option for funding a party rental business. Alternatively, you could use a combination of personal funding and friends and family funding. You might also try crowdfunding if you have an innovative concept.  

Step 8: Apply for Licenses and Permits

Starting a party rental business requires obtaining a number of licenses and permits from local, state, and federal governments. Federal regulations, licenses, and permits associated with starting your business include doing business as, health license and permit from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits. 

You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more. 

You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package. They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.

If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.

Step 9: Open a Business Bank Account

Before you start making money, you’ll need a place to keep it, and that requires opening a bank account. Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your party rental business as a sole proprietorship. 

Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.

Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account. 

Step 10: Get Business Insurance

Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.

Here are some types of insurance to consider:

• General liability: The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
• Business Property: Provides coverage for your equipment and supplies.
• Equipment Breakdown Insurance: Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
• Worker’s compensation: Provides compensation to employees injured on the job.
• Property: Covers your physical space, whether it is a cart, storefront, or office.
• Commercial auto: Protection for your company-owned vehicle.
• Professional liability: Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
• Business owner’s policy (BOP): This is an insurance plan that acts as an all-in-one insurance policy, a combination of any of the above insurance types.

Step 11: Prepare to Launch

As opening day nears, prepare for launch by reviewing and improving some key elements of your business. 

Essential software and tools

Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks.  

You can use party rental software, such as Quipli, Good Shuffle, or Booqable, to manage your scheduling, orders, tasks, billing, and payments.

Accounting

• Popular web-based accounting programs for smaller businesses include Quickbooks, Freshbooks, and Xero. 
• If you’re unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences for filing incorrect tax documents can be harsh, so accuracy is crucial. 

Develop your website

Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism.

You can create your own website using services like WordPress, Wix, or Squarespace. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.

They are unlikely to find your website, however, unless you follow Search Engine Optimization (SEO) practices. These are steps that help pages rank higher in the results of top search engines like Google. 

Marketing

Here are some powerful marketing strategies for your future business:

• Strategic Partnerships: Collaborate with local event planners, catering services, and venues to create mutually beneficial partnerships, expanding your reach and providing bundled services.
• Social Media Engagement: Leverage the power of social media to showcase your rental items in action, run contests, and engage with your audience, creating a buzz around your offerings.
• Online Reviews and Testimonials: Encourage satisfied customers to leave positive reviews on platforms like Google, Yelp, and Facebook, building trust and credibility among potential clients.
• Themed Packages: Develop attractive and convenient themed party packages to simplify the planning process for customers, offering a one-stop solution for their event needs.
• Referral Programs: Institute a referral program that rewards customers for referring others to your business, fostering word-of-mouth marketing and customer loyalty.
• Email Marketing Campaigns: Build an email list and regularly send out newsletters featuring promotions, new inventory, and party planning tips to keep your business top-of-mind for potential clients.
• Loyalty Programs: Implement a loyalty program offering discounts or special perks for repeat customers, encouraging them to choose your rental services for their future events.
• Interactive Content: Create engaging and shareable content such as how-to videos, event planning guides, and interactive quizzes on your website and social media to position your brand as an authority in the industry.
• Local Sponsorships and Community Events: Sponsor or participate in local events and community gatherings to increase your brand visibility and establish a positive connection with your target audience.
• Targeted Online Advertising: Use online advertising platforms like Google Ads and social media ads to target specific demographics and local audiences, ensuring your marketing efforts are highly focused.

Focus on USPs

Unique selling propositions, or USPs, are the characteristics of a product or service that sets it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your party rental business meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire. 

Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your party rental business could be:

• Luxury party tents for your big event
• Let the good times roll with your own bouncy house 
• Outdoor event seating and tent rental for your summer bash

Networking

You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a party rental business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in party rentals for years and can offer invaluable insight and industry connections. 

The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in party rentals. You’ll probably generate new customers or find companies with which you could establish a partnership.

Step 12: Build Your Team

You will likely need workers to fill various roles. Potential positions for a party rental business would include:

• Rental Assistants – delivery, event setup
• General Manager – scheduling, staff management, accounting
• Marketing Lead – SEO strategies, social media, other marketing

At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need. 

Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent. 

Step 13: Run a Party Rental Business – Start Making Money!

As the pandemic recedes, people are ready to have fun, and you can help! With a party rental business, you can help create memorable events of all types and grab your own little slice of this $5 billion industry. 

You can make good money and spread joy at the same time. You can start by specializing in a certain item and then expand over time to become a one-stop-shop party rental business. Now that your homework is finished, get ready to launch your new party rental business and bring in some cash!

Frequently Asked Topics

How can I finance a party rental business?

Financing options include personal or family and friends funding, or you might be able to qualify for a bank loan or an SBA loan. To do so, you’ll need a good business plan. If you have a unique concept, you could also try crowdfunding. 

What’s the best kind of party rental business to start?

There are all types of party items that you could rent. You could rent tents and furniture for outdoor events, which are very popular right now. You could instead focus on things like banquets and wedding receptions and rent tablecloths, dinner and glassware, and other items.

How can I create a brand identity for my party rental business?

Define your target audience and values, design a unique logo and visual style, and consistently apply your brand identity across all marketing materials and customer touchpoints.

How can I differentiate my party rental business from competitors in the market?

Offer a distinctive selection of rental items, provide exceptional customer service, and focus on unique themes or customization options to stand out from competitors.

How can I handle logistics and delivery of rental items to event venues?

Implement an efficient inventory management system, establish partnerships with reliable delivery services, and ensure clear communication and coordination with event venues.

Can I start a party rental business on the side?

Yes, starting a party rental business on the side is possible, but it requires careful planning, time management, and a strong focus on customer satisfaction to ensure success.