Party Rental Business Overview

A party rental business provides equipment and supplies for events, celebrations, and gatherings. These rentals include tables, chairs, tableware, decorations, tents, audio equipment, and other items needed for parties and events.

Rental companies serve both individuals planning personal celebrations and businesses organizing corporate functions. These businesses work with event planners, catering companies, and venues to supply necessary items for occasions ranging from small backyard parties to large corporate gatherings and weddings.

The most common business models in the party rental industry include:

• Full-Service Rental Company: Offers a complete inventory of party supplies with delivery, setup, and pickup services
• Equipment-Only Rental: Focuses on renting tables, chairs, and basic event equipment without additional services
• Specialty Rental Provider: Concentrates on specific items like wedding decor, carnival equipment, or themed party supplies

Related: Checklist To Start A Business

How Do Party Rental Businesses Make Money?

Party rental businesses generate income by charging rental fees for equipment and supplies. Customers pay based on the quantity of items rented and the duration of the rental period, typically with deposits required to cover potential damage.

Industry Statistics

Party rental services operate under NAICS code 532289 All Other Consumer Goods Rental. Here are some statistics on the current state of the industry.

Party Rental Industry Size & Growth: The party rental industry generated $7.3 billion in revenue last year. Over the past five years, the industry showed steady growth with an average annual increase of 1.8%. Growth projections remain positive due to rising disposable income and increases in wedding celebrations. Additionally, pent-up demand for social gatherings following pandemic restrictions continues to drive industry expansion. (IBISWorld)

Number of Party Rental Businesses: There are 9,353 party rental businesses operating across the country. The industry remains fairly fragmented, with no company controlling more than 5% of the market. The three largest companies – Bright Event Rentals LLC, Party Rental Ltd., and DC Party Rentals LLC – collectively represent a small portion of total industry revenue. (IBISWorld)

Party Rental Profit Margin: Party rental businesses typically see profit margins between 8% and 18%, with variations based on factors such as inventory size, service offerings, and operating costs.

Also See: Ideas for Naming a Party Rental Business

Costs To Start a Party Rental Business

Starting a party rental business typically costs between $25,000 and $150,000. The wide range in startup costs reflects differences in inventory size, storage needs, and whether the business starts with new or used equipment.

There are several expenses to start a party rental business, but here are some of the larger costs to consider:

Initial Inventory: The largest expense when starting a party rental business is purchasing inventory. Basic items like tables, chairs, linens, dishware, and tents can cost between $15,000 and $75,000, depending on quality and quantity. Many businesses start with a smaller selection of commonly requested items and expand their inventory over time.

Storage Space: A warehouse or storage facility to house rental inventory typically requires $1,000 to $5,000 per month, depending on size and location. The space needs proper climate control to protect items from damage and enough room for organizing, cleaning, and maintaining equipment.

Delivery Vehicles: A cargo van or box truck for transporting rental items to events costs between $20,000 and $50,000. The vehicle needs proper shelving and equipment to secure items during transit and prevent damage.

Cleaning Equipment: Commercial washing machines, sanitizing equipment, and cleaning supplies for maintaining rental items can cost $5,000 to $15,000. This equipment ensures items are properly cleaned and sanitized between rentals.

These estimates represent general ranges; actual costs will vary based on location, business size, and equipment choices.

Resources:
American Rental Association