Party Rental Companies Make The Same Mistakes. Repeatedly.

Here’s something you aren’t going to hear most bounce house or party tent manufacturers tell you, especially not right out of the gate. Are you ready? Here it comes … owning a party rental company is hard work. A lot of our competitors like to say it’s easy, but it’s just not. And they’re hurting party rental companies like yours by perpetuating that myth.

Commercial inflatables like bounce houses, inflatable water slides, sealed air frame games, and inflatable obstacle courses, and party tents like frame tents and pole tents are expensive. They’re heavy. They’re sometimes difficult to clean. And they’re also expensive to insure. This isn’t “easy money” and there’s nothing “turnkey” about it. This business requires dedication and hard work, and dialing those in will undoubtedly result in failure.

If those first two paragraphs didn’t scare you off, we can move onto some good news: party rental companies do tend to be fairly, if not highly, profitable. It’s not universally true, of course—businesses fail every day, in every industry—but with a good approach, a sensible strategy, and realistic goals, most party rental companies see solid profits and impressive, steady growth within their first one to three years.

Unfortunately, our industry does see quite a few burn-outs as well; Party rental companies that spring up but fade away just as quickly. And more often than not, it’s the same mistakes causing all of that damage each and every time, over and over and over again.

So what are these common mistakes so many party rentals companies succumb to? How can they be avoided? And just how big of a slip-up does it take for these issues to damage, if not ruin, a party rental company? Let’s take a look at the 15 most common mistakes party rental companies make and find out!

1. Don’t Undervalue the Paperwork

Never underestimate the value of paperworkAll too often, aspiring entrepreneurs assume “small business” means “skip the stuff bigger companies do.” They see things like business plans, inventory spreadsheets, and customer databases as superfluous. I mean, I’m operating out of my garage. Why do I need to do all of this fancy paperwork?

But you do need all of that fancy paperwork. It provides invaluable information and data that your business cannot and frankly will not survive without. You’ll stay more organized. Your customers will be better served. If you need to take out a small business loan, it will help facilitate that. And it’s just all-around more professional, too.

Before you consider buying a bounce house or party tent, you first need to invest time in creating a business plan. As soon as you get the company moving, you should also create a few spreadsheets (Google Docs has a great tool called Sheets for doing this) and use them to track customers, inventory, and more. All of this paperwork might seem like a drag, but a few months down the line you’ll appreciate the daily value you get from having it.

2. Prioritize Safety

Ensuring the safety of your customers and their party or event guests should be your highest priority. It should define everything you do as a party rental company. And the primary reason you should prioritize safety is pretty obvious: it’s the right thing to do

Injuries not only keep you from sleeping at night, but harm your business as well. Accidents and injuries can result in lawsuits … lawsuits that will end in a particularly unfavorable way should lawyers prove there were steps you could have and should have taken to avoid catastrophe.

Negative reviews can decimate a small business, too. A one-star review with the subject line “my kid was hurt in this guy’s bounce house!” is all it takes to damage your business and steer potential customers to your competitors. Make safety a priority and never phone it in.

3. Get Liability Insurance

Liability insurance insulates party rental companies from litigationSpeaking of accidents, you should be prepared to face the fact that at some point, someone will likely get injured—hopefully not seriously—using your party rental equipment. It’s inevitable. And when that does happen, liability insurance can mean the difference between your business staying afloat or not … or you being held personally liable for tens of thousands of dollars, if not more.

Liability insurance is mandatory for party rental companies in some cities, counties, and States. Your business won’t legally be allowed to operate without it in those places. But it’s something you don’t want to operate without regardless. And many potential customers will consider you more trustworthy if you present them with proof of that insurance, too.

4. Clean Your Commercial Inflatables and Party Tents

This one is pretty simple: you absolutely must clean your commercial inflatables and party tents after each and every use. We’ve written guides on how to clean a bounce house, how to clean an inflatable water slide, and how to remove mildew and mold from a bounce house. We’ll be creating more of these guides later, too. No one wants to have that reputation of being the slummy company with dirty equipment, and you don’t want to get children sick, either.

5. Enlist the Help of Family and Friends

You cannot set up most party tents by yourself, and bounce houses weigh a lot. We’re talking hundreds of pounds per unit. You’re going to need help on all of the physical elements of this work.

Of course, getting help from others doesn’t need to stop there. Perhaps you know someone with website design experience. Or an aspiring writer who’d love to take on your blog. Or maybe your significant other is good at keeping books and managing spreadsheets. Get people involved in as many facets of your business as they’d be willing to collaborate on and never be afraid to ask others for help.

6. Network as Much as Possible

Party rental companies can benefit from networking with caterers, entertainers, and other service providers in the party planning sectorTo be successful in nearly any industry, who you know is as important as what you sell (or in our case, what you rent). Networking is an incredibly important element of successfully running a business in this space, and for lots of good reasons, too.

When your competitors are overbooked, who will they refer their business too? When a catering company is looking to recommend great wedding tents to their client, who are they going to mention? What if an entertainer is booking a big birthday party gig ... wouldn’t it be nice if they mentioned your bounce house rentals?

Take the time to reach out to party planners, event planners, and other businesses within the local service industry. Get to know people. Recommend their services to your customers. Don’t make the all-too-common mistake of assuming your business can thrive on its own. In most cases, it can’t and it won’t.

7. Offer Lots of Variety to Your Customers

Your customer is booking a party. They need a party tent and a bounce house slide combo unit, both of which your company can provide. But what about everything else your customer needs? Why are you not offering that stuff, too?

Folding tables, folding chairs, dance floors, lighting systems, PA systems, concessions/ food and beverages, carnival games, prizes, folding bars, event staging … there are a lot of products your customers want and need. And if they can get all of that through a single vendor, relying on you to get them what they need versus three or four separate companies, that’s the option they’re most likely to take, nine times out of ten.

Take the time to ask customers what sorts of rental equipment they’re looking for, and if you don’t offer it, ask yourself why you don’t. You’ll see trends emerge pointing toward big popular items, like bounce houses and party tents, but also toward those smaller items, like dunk tanks, popcorn machines, and birthday balloons. Having those items in your garage or warehouse helps you fulfill more of a customer’s needs in one sitting. You won’t rent them out with every event, but you’ll certainly see them supplementing your rentals pretty often.

8. Don’t Pick the Wrong Bounce Houses or Party Tents

who invented the bounce house?Speaking of equipment, here’s another common mistake people tend to make: they get the wrong bounce houses or party tents, or they end up buying more or less than they need. And that goes for all of that additional equipment we mentioned a moment ago, too.

Your early bounce houses, inflatable water slides, and other commercial inflatables should appeal to as many potential customers as possible. You’ll want to focus on gender neutral options that work for boys’ and girls’ events. Also, avoid licensed products, too. Not only are these more expensive (the manufacturers need to pay exorbitant licensing fees for intellectual property rights), but they have limited usability. That Batman bounce house isn’t going to get rented out as often as a more generic and equally-fun rainbow bouncer would. 

Ideally, you’ll want to start with one or two gender neutral bounce houses, at least one bounce house with slide combo (they rent for more money and they’re more fun), and one or two party tents as well. Tables and chairs are always a solid investment, too. Supplementing these with some carnival games, sealed air frame games, and other inflatable interactives will allow you to upsell your customers in a useful, non-sleazy way that’s as beneficial to them as it is to you.

One more thing to take into consideration is outscaling yourself. Don’t buy equipment that’s too large or too heavy for you to move around, and make sure you have enough storage space to keep your equipment safe as well. Some companies have learned this the hard way; they buy equipment they can’t really set up given their manpower and resources, or gear they can’t store, and this can have disastrous results.

Gender Neutral Bounce Houses

9. Register Your Party Rental Business as an LLC

A sole proprietorship is a business owned by a single individual, who supports that business and backs it with their private, personal assets. And that’s great for some styles of business … but not so much for a party rental company.

An LLC (“Limited Liability Company”) is a company with one or more owners (“members”) that is structured in such a way that the company acts as its own entity. If there were a lawsuit resulting from your company’s operations, the company itself would be sued, rather than you being sued.

Forming an LLC insulates and protects your private finances and assets. It also legitimizes your business with your customers, too. Simply put, there are too many great reasons to form your party rental company as an LLC to not do it.

10. Create a Business Bank Account

Speaking of insulating your personal finances and assets, creating a bank account for use exclusively by your company is another idea some companies just starting out fail to capitalize on. Using your private banking accounts for business purposes exposes your personal assets to legal payouts and can cause a real headache during tax season. Avoid these pratfalls by simply creating a bank account for your company (you did register as an LLC, right?).

11. Research Your Competition and Know Them Well

Be sure to take some time to research your competition locally. If they’re operating in your service area, you should learn what sorts of products they offer, how local customers view them, and where all of your overlap points will be. Figure out what differentiates you from those competitors. 

You don’t need to dress up in a black spandex outfit and dangle from ropes above a computer to acquire information about your competitors and their businesses. Most businesses offer details about their products and services on websites or social media pages. Or you can simply call them and ask what they offer. 

12. Price Yourself Competitively … and Wisely

Look into other party rental companies in your area and price yourself competitivelyHere’s an item in that same vein as #11 was, but important enough to make it as its own separate point: you really badly need to comprehensively understand what your competitors are charging, what your potential customers are willing to pay, and how much you need to charge in order to break even in a reasonable amount of time.

It’s important you keep your prices close to those of your competitors. Wildly undervaluing your rentals not only makes it harder for your company to break even on your equipment costs, but it makes local consumers think twice about renting from you, too. Why is this company so cheap? Is their equipment bad? Are their bounce houses riddled with bed bugs? What’s up with them?

Over the summer we compiled some research data on average bounce house rentals, which we used to help explain how much to rent a bounce house to customers for. Give those articles a read. They should help you price your rentals more competitively!

13. Avoid Being Excessively Frugal

As your business grows, you’ll find your profit margins expanding. You’re making more money, and now you can feel yourself being pulled by two opposing forces. On one hand, you could invest that money back into your business and continue that growth. But on the other hand, shouldn’t you be keeping hold of that money for a rainy day? And I’m sure some of you might be thinking something a bit different, too … that new video game console I just bought would look pretty dope on a new 60” flat screen TV, right?

Tune that latter voice out as best you can (albeit the “save for a rainy day” voice or the “enjoy your spoils” voice) and continue to invest in your business to maintain growth. Many companies have found themselves stagnating because they were being too frugal (or too wasteful) with their earnings. 

You should of course save money, and enjoy your money too. But investing back into your business is always a sound decision. Buy more bounce houses or party tents. Hire more employees. Add another box truck or trailer to your fleet. There’s always room for growing your company, and you should be investing some reasonably sized portion of your net revenues into growth.

14. Don’t Undervalue Internet Resources

Party rental companies often underestimate the value of websites and internet marketing toolsIn this day and age, it almost boggles the mind that companies still exist with limited web presence. Your party rental company should have a modern website and an established presence on a few social media platforms (Facebook, Twitter, and Instagram at the very least).

A whopping 82 percent of consumers will consult their phones before making a purchase. Most of your potential customers are going to do the same. They’re going to Google you. They’re going to read your reviews. Many, if not most, are going to look for your website and try to find you on social media. And if they can’t find that website or those social pages, or if they’re poorly made or insufficiently completed, it’s going to ultimately reflect poorly on your company.

Hire a professional to build your website for you, or find someone in your circle of family and friends who can help. Take your time and fill in all of the information those big social media websites ask you for. Spend some time every two or three days responding to reviews on Google. The companies that invest the least time online tend to be the first ones to ask where it all went wrong.

15. When it Comes to Marketing/ Advertising, Spend the Money

In order to get your business anywhere substantial these days, you need to invest money in proper advertising. And many small businesses have been killed off as a direct result of their undervaluing marketing and advertising.

Newspapers, local magazines, and local radio are all great, cost-effective places to spend your advertising money. Social media marketing and Google AdWords tend to be slightly more expensive (depending on how big of a campaign you’re launching), but reap much better results. Television ads are generally worth it, too, especially if they connect with your target audience in a strong or worthwhile way.

Advertising is costly, but necessary. Your business won’t get very far without it. We recommend you do some reading on advertising, ask local companies for their advice, and reach out to local marketing agencies to see what they can offer your business. Shop around and avoid overspending or under-spending.

The Party Rental Companies that Avoid These Common Mistakes Can Prosper

Party rental companies can prosper if they avoid mistakes, and correct problems when they make errorsOwning and operating a small business isn’t easy. It requires dedication and hard work, and starting that business takes a whole lot more. But in the end, managing to grow your small business into a functional, profitable, established entity can pay huge dividends. Not just financially, but in terms of having accomplished something tremendous.

Party rental companies are just like any other type of business. They’re going to encounter problems. Some will be small bumps in the road. Others might be significant headaches. And some might even develop into full blown disasters. But knowing what those incidents might look like before they take up starring roles (or maybe just cameos) in your inability to sleep at night can mitigate the chances of those awful, no good, dreadful things happening in the first place.

There’s no such thing as a perfect business model. You will make mistakes. You will run into unforeseen calamities. It genuinely cannot be helped. But you can at least do your best to avoid those problems, and prepare for any eventuality you can think up. As a small business owner, that’s the best you can ever really hope to do.

Thankfully, other party rental companies have gone through all of these issues already. They’ve seen how to tackle each problem head-on, and they know what steps could’ve been undertaken to avoid them. We hope this list of common mistakes party rental companies make helps you avoid those problems. And if you have any questions, suggestions, or ideas that might help other companies through a jam, we’d love for you to post them in the comments section below!

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