Starting a new event rental business can be an exciting and rewarding experience, but it’s not without its challenges. Many new business owners make mistakes that can significantly impact their success. Some common traits are shared between event rental businesses that fail, and the mistakes they make can easily be avoided with just a little extra effort and planning.
It is essential to comply with every legal requirement, plan your marketing, invest in equipment smartly, create a robust pricing strategy, and have your day-to-day processes in place from the start. By completing these tasks, you will be better set up for success and be in a position where you can avoid facing unnecessary challenges down the road as your business grows.
10 mistakes event rental business owners should avoid
1. Lack of a business plan
One of the most common mistakes new event rental businesses make is failing to develop a comprehensive business plan. A business plan is essential for outlining your goals, target market, financial projections, and more. Without a strategy, you risk making decisions that could harm your business’s long-term success. This is why taking the appropriate time to consider every aspect of your business is vital.
You should analyse your target market and research your competitors and similar businesses in other areas. This will help you to get an understanding of where to position yourself. Consider your budget and project what your revenue will look like, as this will allow you to predict the viability of your business model. Finally, you should set some long-term goals to measure the success of your business.
2. Overinvesting in inventory
Another mistake new businesses make is overinvesting in inventory. When starting an event rental business, getting excited and purchasing every product and decoration your clients need is easy. However, investing in too much stock can hurt your cash flow and leave you with products you don’t rent out as often as you’d hoped. This is one of the quickest ways to lead your business to failure.
The better strategy for investing in inventory is specializing in products for a specific style or niche. For example, if you cater to family parties, you may invest in tables, chairs, and tents. While if you cater couples looking to create a mid-century wedding, you may invest in decorations that match that style. This will set you up to meet your target markets needs and prevent you from overinvesting in inventory.
3. Poor pricing strategies
Pricing can make or break your business. Setting your prices too high or too low can lead to lost revenue or undercharging your customers. It can be tempting to offer low prices initially to undercut your competition. However, this can be unhealthy for your business and make it difficult to raise prices once you’re more established. So, you want to get this right from the beginning.
Many things go into calculating the pricing of your rentals, from competitor analysis to purchase costs, time costs, predicted usage, and customer expectations. Setting prices that align with your brand and the value your company offers is important. This calculation will consider everything mentioned, the positioning of your business in the market, and the quality of your service.
4. Failing to target the right customers
Not understanding your target market is another mistake many new event rental businesses make. Each demographic will have different values and requirements when renting out equipment. Some will want affordable prices and for you to drop the equipment off and leave them to it. In contrast, others will expect you to set it up and take it down when the event ends and will pay for that experience.
If you market your business incorrectly, you could attract customers you weren’t expecting to deal with. That’s why it’s important to position yourself correctly and align the marketing across your website, social media, and advertising. This will help you to attract your target customers and help qualify them before they even interact with your rental business online or through phone and email.
5. Waiting to implement a management system
When starting, many event rental business owners will manage their business with spreadsheets. This can make it easy to manage when you’re alone and only have a few customers. However, it can make it challenging to scale as the more customers you get, the more complex it becomes to manage and schedule bookings and inventory, leading to bottle necks.
At this point, you will likely look into a rental management system, which means learning a new workflow and training team members. This takes time, and is why implementing a mangement system, like Booqable, from the beginning is vital. It allows you to manage your business, while giving you room to scale in the future without facing these challenges in your growth.
6. Adding services to increase revenue
Some event rental businesses add services when their rental revenue isn’t meeting their expectations. This could be in the form of offering event planning, co-ordinating services, or selling products. While this might seem like a good idea, it means that you’re overextending your business, leading to higher costs to keep on top of these services on top of your rentals.
If you take a honest look at it, though, if your rental business isn’t successful, it’s unlikely assing additional services will help. As mentioned, these services increase your workload and costs. You should focus on providing the best experience and offering possible for your customers. This isn’t to say that looking at other avenues isn’t a good idea, you just need to make sure your rental business can stand on it’s own feet first.
7. Poor customer service
Great customer service is crucial to building a positive reputation and repeat business. Failing to respond to customer inquiries promptly or being unresponsive can damage your business’s reputation. One of the most significant growth drivers for event rental businesses is word-of-mouth, and people sharing negative experiences because you provided poor customer service isn’t great advertising.
Customer service is often overlooked because it’s easy to forget, especially when getting your first customers. However, it is essential that you get it right from the beginning. This means being customer-oriented and making the rental experience as smooth as possible from booking to delivery. Positive experiences create positive word-of-mouth, which attracts more customers to your business.
8. Inadequate preparation for events
Event planning can be complex and time-consuming. Failing to prepare adequately can lead to logistical issues, unhappy customers, and lost revenue. Your customers have expectations that everything will go smoothly, and that all starts with your planning. It’s essential to have processes to ensure all details are accounted for, and everything is prepared in-advance instead of last minute.
To prepare for events, you should create a comprehensive checklist that you run through leading up to the occassion. This will help you to stay on track and have everything prepared for your customers. Some items may include planning travel to the venue, setting aside stock, and assigning team members. By doing these things in advance, you can save yourself much stress when an event comes around.
9. Ignoring legal requirements
Operating an event rental business comes with legal requirements and regulations. Failing to follow these requirements can lead to legal issues, fines, and damage to your business’s reputation. You need to ensure that all legal aspects of your business are covered, as you can’t retroactively apply them. This is why it’s best to consult with an attorney before launching your business, so you know you’re meeting requirements.
This is not legal advice, but you should start by creating an LLC or corporation for your company. You should also have terms and conditions, cancellation policies, contracts, and insurance. These are all things you can discuss with your attorney, and they will be able to help you get them sorted legally. They will also be able to advise you on any other requirements in your local area that need to be met.
10. Lack of flexibility
Finally, being inflexible in your services and business practices can be a mistake. Customer needs and trends change over time, and it’s essential to adapt to these changes. It can be easy to think that you have everything covered, but the truth is that there will always be situations you aren’t prepared for. This can change from customer to customer, so you need to be flexible with how you operate.
Not every customer will be the same, and you should have some flexibility in your practices to meet their requirements. Of course, this doesn’t mean moving heaven and earth to meet demands, but you need flexibility. Be willing to modify your services and offerings to meet your customers’ needs. It is also important to keep up with trends so that your offering remains competitive in your target market.
Start your rental business for just $29/month
Put your toes in the water and test the demand in your area with a rental website for just $29/month.
Putting your best foot forward
Starting a new event rental business can be a rewarding experience. However, to avoid the common mistakes, it’s essential to develop a comprehensive business plan, understand your target market,, and prioritize good customer service. Be flexible, prepared, and willing to adapt to changes in the industry. By doing so, you’ll be on your way to building a successful and profitable event rental business.
