In the modern era of 2021, when innumerable entrepreneurial projects are sprouting up, starting your own venture may appear daunting. Nearly 90 out of every 100 new startups will ultimately fail. As a result, aspiring entrepreneurs must exercise extreme caution when searching for the right market to enter. Currently, one of the best such markets is furniture rentals.
Furniture rentals have grown by 1000 percent globally in the last three years. Also, the industry is now estimated to be worth between $5 and $8 billion. This demand is influenced by both economic and environmental factors that shape the millennial generation.
However, since more than one-third of US households rent, there is still a substantial flexible furniture demand gap. Which is continuously asking to be filled while it’s only getting bigger.
Why not take advantage of this low-hanging fruit? Have a look below:
1. Find Your Furniture Rental Niche
The choice of which furniture rental market segment to target is possibly the most important aspect of your business development journey.
Why?
This is because many of the opportunities and challenges differ greatly depending on the particular niche. While other people may divide the overall furniture rental industry into different categories, we strongly believe that it makes the most sense to divide it into the following niches:
- Office furniture rentals
- Event furniture rentals
- Home furniture rentals
- Outdoor furniture rentals
You can further subdivide things into specific niches. But we believe that most businesses will take one of the four paths outlined above.
Finally, we highly recommend that one must avoid spreading yourself too thin. In simple words, you can always add a new niche to your offering later, once you’ve mastered your first rental niche.
2. Carry out Niche Related Market Research
Since you’ve now decided on the furniture rental niche, in which you want to work, it’s time to do some market research. Information is power, and well-informed decisions will always triumph over gut instincts and hunches. To begin, try to estimate the demand for your specific furniture rental niche within a reasonable service area. Keeping in mind that you can always extend your service area later.
Look for the real numbers rather than the numbers you want to see. Also, be willing to change your mind. The data must inform your company’s actions, so be prepared to change your behavior based on what you discover. At this early stage, competitor analysis is critical.
Now that you’re up to the task, go ahead and do it yourself. But it’s also a good idea to hire a consultant or agency to do it for you because they’ll approach the task objectively.
3. Planning Which Rental Furniture to Invest In
Rome was not built in a day, but at the same time, some parts of it were. The same is true for your business. So you should not expect to have your entire rental furniture inventory sorted within the first year. In fact, doing so could be detrimental to your health. When purchasing new inventory, try to be conservative.
Always select items that customers will expect from a business in your niche. At the same time, also focusing on items that offer the best return on investment. For example furniture molding industry is one of the top one when it comes to generating high ROI.
There are various approaches to this in the furniture rental industry. The most simple and intuitive approach is to calculate how much a specific item can earn over the course of its rental lifetime. Make a conservative estimate and then deduct the item’s initial cost.
Doing so can assist you in determining which types of stock to invest more money in the short term. Especially when your inventory must be lean due to necessity.
4. Invest in the Right Business Software
We could go on and on about starting a furniture rental business, but we want this guide to serve as a jumping-off point for readers. So, while we could provide advice on warehouses, pricing strategies, office space, marketing, and so on, we may follow up with a sequel covering these topics in the future.
The focus of today’s guide is on rental software. Inventory management, scheduled pickups & deliveries can get hectic at times for you and your customers. So, carefully select a rental software that meets the requirements of your furniture rental business. Choosing an on-premise solution(like YoRent) can be a cost-effective choice concerning higher subscriptions for SaaS solutions.
5. Take Legal Requirements Seriously
Before you really launch your business, you must first meet all of the legal requirements. To begin your furniture rental business, you must first register with the state in which you intend to operate.
To protect their assets from business debts, the majority of the businesses prefer to register as a Limited Liability Corporation. After you’ve registered your company, apply for an Employee Identification Number (EIN).
This will allow you to legally operate your business in the United States. You will need an EIN to open a business bank account, apply for licensing and permits, and file taxes.
6. Get a Physical Space
The very next step is to locate a physical location for your company. You’ll need to rent warehouse space to store your furniture until someone hires it. Ensure that the warehouse is large enough to accommodate all of the furniture and that it is not stacked one on top of the other. This frequently damages the furniture and raises the cost of maintenance and repair.
A good location is always essential for running a successful business. In the early stages of your business, you may choose to work from your garage. It did, however, suggest having a separate office space. It will assist you in developing a marketable brand image.
7. Sourcing Finance
You will need a significant amount of money to purchase various types of furniture. Also, to store it in a warehouse, and finally to hire a company that will handle the transportation. If you do not have the required savings, you can apply for an SBA loan or even a bank loan. You can also see if there are any business incubators in your area.
They will help you save money and provide support. If you are a member of a credit union, you can also apply for a loan. This will allow you to obtain financing at a lower interest rate.
Wrapping Up
The steps outlined above are the fundamental and basic steps to launching your furniture rental business. As you begin and grow in this business, you will gain valuable experience.
Work on what you believe will help your rental business grow. Well, remember to always ensure that your customers are satisfied.
