Unless you accidentally clicked on the wrong link, chances are you’ve clicked through to this page because you’re either considering whether to start a furniture rental business or you’ve already created a furniture rental business. With this introductory guide, we hope we can help a few readers interested in the furniture rental industry. If anything we say helps you or inspires more questions, please feel free to reach out.
Why Start a Furniture Rental Business?
First off, before we go into some specific advice for anyone starting a furniture rental business, we’d like to talk about the industry as a whole and why it has become such a viable option for people looking to start a new business.
According to TYB, the furniture rentals industry grew by 1000% between 2016 and 2019, and this growth is predicted to continue until at least 2024. There are other more modest industry growth figures, but all sources show that the furniture rental industry is enjoying a meteoric rise. This growth alone is enough reason for any entrepreneur to invest in furniture rentals.
Also consider the added transience of modern office space in reaction to the COVID-19 pandemic, as businesses refrain from committing to long office leases and to acquiring burdensome physical assets, such as office furniture. Another new factor to consider is the inevitable rush on the events industry as weddings, conventions, and various other events start up again in earnest, making up for lost time.
First Things First: Find Your Furniture Rental Niche
The decision of which furniture rental niche you target is perhaps the most important part of your business development journey. Why? Because many of the opportunities and challenges are very different with each specific niche. While other people may separate the overall furniture rental industry into different categories, we believe it makes the most sense to categorize the niches as follows:
- Office furniture rentals
- Event furniture rentals
- Home furniture rentals
- Outdoor furniture rentals
You can break things down even further into specific niches, but we think that most companies will usually choose one of the four paths above — perhaps even combining niches 3 and 4. The reason we recommend limiting your business to one of the above niches is because they all come with their own logistical challenges, risks, and rewards. Not only would it be overwhelming to attempt to crack the event furniture industry at the same time as the office furniture rental industry, neither niche complements each other well, and neither do they inform each other in terms of marketing or logistics.
For instance, furniture rentals for the events industry usually involves highly sensitive deadlines and labour-intensive contracts where you often must deliver, set up, and then remove your inventory all within a one or two-day timeframe. Compare this to office rentals, where the furniture is usually rented out for several months at a time, with few of the tight deadlines found with event furniture rentals. If you’d like to know more about the events rental industry, read our guide to starting a party rental business.
Ultimately, our advice on this matter is that you avoid stretching yourself too thin; you can always add a new niche to your offering later, once you’ve got a good handle on your first rental niche.
Carry out Market Research into Your Furniture Rental Niche
Now that you’ve made a decision about the furniture rental niche you’d like to work within, you need to conduct some market research. Information is power, and informed decisions will always trump gut feelings and guesswork. First off, attempt to gauge the demand for your specific furniture rental niche within a realistic service area (you can always extend your service area later). Look for the real numbers as opposed to the numbers you want to see, and be ready to change preconceptions. The data needs to inform your business’s actions, so be prepared to change how you behave based on what you find.
Competitor analysis is crucial at this early stage. If you’re more than up to the task, do it yourself, but it’s also a good idea to pay a consultant or agency to do this for you as they will come at the task with a completely unbiased perspective. While you should absolutely analyse top businesses in your area within your niche, don’t neglect the smaller businesses as no new business competes in the big leagues straight away. It is much more likely that your competitors will be the smaller companies, at least for the first year or two. Allow everything you find in your competitor analysis to inform your business strategy.
Deciding Which Rental Furniture to Invest in Early On
Rome wasn’t built in a day… but some of it was. The same goes for your business and you shouldn’t expect to have your entire range of rental furniture sorted within the first year. In fact, doing this could prove disastrous for you. Try to be conservative when buying new stock, choosing items customers will always expect from a business in your niche while also focusing more on items that offer the greatest return on investment. There are different ways of figuring this out in relation to the furniture rental industry, but one simple, intuitive angle is to work out how much a particular item can earn throughout its rental lifetime. Make a conservative estimate of this and then subtract the initial cost of the item. This can help you figure out which kind of stock to put more money into in the short term, when your catalogue of stock must be lean by necessity.
Invest in the Right Software for your Furniture Rental Business
There is so much we could talk about in relation to starting a furniture rental business, but we want this guide to serve as a starting off point for readers. So, while we could go into advice relating to warehouses, office space, marketing, pricing strategies, etc, we will perhaps follow this guide up with a sequel covering these areas in the future. The final topic for today’s guide is rental software. Rentrax offers its own Furniture Rental Software and it’s perhaps best to discuss some of its features and why they are so beneficial to the day-to-day running of a furniture rental company. In a world of repurposed sales software and generic functionality, Rentrax is one of the only software companies that creates a system specifically designed to empower and enable rental businesses.
Track your inventory’s ROI
One great feature Rentrax offers involves effortlessly tracking inventory’s return on investment over time. This feature automatically tracks how much revenue each item generates, allowing you to set specific thresholds. This means that you can sell stock after it has earned a certain amount over the initial investment. This allows you to sell inventory at the right time, when it is still in good condition but has worked hard for your business. Selling stock also allows you to replenish your inventory, always maintaining the high standards that inspire good reviews and return custom.
SKU-based inventory management
The range and complexity of your furniture rental inventory is completely up to you. It may make more sense to compete on quality, or it might be best to offer as wide a range of products as possible, competing on choice/variety. Whatever you choose, a good SKU-based inventory management system can help you organise your stock for customers, presenting the most relevant features on your online store. Allowing customers to easily select and filter through your stock can save time and increase your chances of making a sale. Just reflect on some of your more frustrating moments trying to buy or book something online and you’ll see how powerful a good SKU-based inventory management system can be. The SKU tracking system is helpful when the customers come to the store and want specific items to be assigned to their order. For instance, imagine you have five identical tables and one of them is cleaner than the others and the customer chooses that one.
Integrated marketing features
Our integrated marketing features allow you to make good and easy use of any sales data by sending SMS and email messages to previous customers, offering special deals and discounts. Of course, marketing can encompass a huge range of activities, but this kind of easy remarketing to past customers can be very effective, and with little to no effort on your part.
Full support (software as a service, not a product)
It is our view here at Rentrax that any software aimed at helping businesses should be offered as an ongoing service as opposed to a one-time-only product. This is why we offer so much support to anyone who uses our software. While we have created our rental software to be as intuitive as possible, there are some incredibly useful functions that inevitably get a little tricker as you increase the complexity of what you’re trying to do. This is why we don’t charge extra for consultations and we have one-on-one video calls with customers to help explain how they can do even more with Rentrax. If you’d like to learn more, please feel free to book a free rental software demo with one of our expert technicians.
That’s all we have time for today. We hope we’ve helped a few readers on their journey towards creating a thriving, successful furniture rental business. This industry is growing exponentially and we’re excited to see what happens next!