Now that things are slowly getting back to normal after COVID-19 restrictions, there are a lot more opportunities for events, parties, and all other large get-togethers, meaning more people will be looking for party rental businesses.

If that sounds like something you can do, and you wish to start your business from home, these are all the bases you’ll need to cover when starting out. 

  • Make a business plan. 
  • Choose a business structure.
  • Register your business. 
  • Market your business. 
  • Budget for startup costs. 
  • Get familiar with bookkeeping. 
  • Open a business current account. 

Make a business plan

Your business plan is the foundation for your future success. It outlines your general strategy and the resources you’ll use to carry out that strategy. The best business plans are made up of seven key parts.

1. Executive summary

The executive summary is a broad overview of your party rental business. It should include:

  • A basic definition of your business.
  • A list of business goals.
  • A list of products and services. 
  • Your target customers
  • Where and how you intend to sell your services.
  • Your financial strategy.

2. Business overview

Similar to an executive summary but more about the big picture stuff. A business overview should include: 

  • The name of your party rental business. 
  • A rundown of your brand identity. 
  • The legal structure of your business. 
  • Your mission statement.

3. Market research and analysis

Your market research should include all of your research about the party rental business as a whole. 

Analyse your competitors, recent market trends, and think about how you plan to exist as a new business in the market. Figure out why your target audience would choose your business instead of your competitors. Maybe you offer better prices, better service, or you’re catering to a previously overlooked demographic. 

4. Products and services snapshot

Expanding on the product/services list from the executive summary, go into more detail about the services you can offer. The snapshot should include a pricing guide and a reason for the prices you’ve set. 

If it’s more expensive, explain why it’s worth it. If it’s cheaper, explain how you can offer the reduced rate without sacrificing quality. 

5. Marketing plan

Your marketing plan outlines how and where you’ll find customers for your party rental business. As a home business, this poses a particular challenge because you won’t have an actual storefront to attract new customers through foot traffic, so you’ll need a greater emphasis on online marketing. 

The plan should include your total marketing budget and where you plan to allocate your resources. 

6. Operations plan

The operations plan describes the resources you’ll need for daily operations, like equipment, supplies, shipping options, funding, and any other resources you’ll need. 

Outline exactly what you need, how much it will cost, and where you plan to get it. 

7. Financial plan

If you plan on seeking investors, you need to prove you’ll be able to handle the repayments with a financial plan. 

Financial plans are made up of:

  • An income statement: How much money your business will earn per week, month, quarter, or year (minus your business-related expenses).
  • A balance sheet: A list of your business assets and liabilities.
  • A cash flow statement: Your monthly income and outgoings. 

Choose a business structure

When you start your own business, you have a choice of legal structures. Most businesses register as either a sole trader or a limited company

Sole trader

As a sole trader, you’ll have complete control over profits, but you’ll also be personally responsible for any debts your business has. So, it can be a riskier business structure. 

Limited Company

Setting up a limited company means you are a legally separate entity from your business, giving you limited liability for debts. With limited liability, you’re protected against any debts your company has, so your personal finances are safe. 

Register your business 

If you’re a sole trader, register as self-employed with HMRC so you can manage your taxes. Sole traders pay the regular income tax rates:

  • Personal Allowance: Up to £12,570 (0%)
  • Basic rate: £12,571 to £50,270 (20%)
  • Higher rate: £50,271 to £150,000 (40%)
  • Additional rate: over £150,000 (45%)

If you set up as a limited company, you must register with HMRC as an employer. If you want to take a salary, you must also sign up to PAYE as an employee of your business. 

Rather than income tax, limited companies are subject to corporation tax (19%) on all of their taxable income.

Market your business

As you’re running your business from home, you’ll need to put a lot of thought into your marketing strategy. There are three areas you need to cover:

  • Branding
  • Online marketing
  • Traditional marketing.

Branding

Branding affects how the public views your business, so it directly impacts the number of clients you’ll attract. 

First, you need to build your brand. Decide on a particular look, feel, and set of values, then maintain a consistent brand identity

Second, there are some legal implications to consider. Make sure all of your intellectual property, like logos, slogan, and company name, are in line with the copyright, designs, and patent act.

Online marketing

Online marketing will be your most effective marketing tool as a home business. Build your online customer base with a combination of:

  • A business website.
  • Social media marketing.
  • Email marketing.

Business website

Building a  business website isn’t as difficult as it used to be. There are loads of website builders that are cheap and easy to use.

Once you’ve perfected your business website, improve your online search rankings by:

Social media

Platforms like Facebook, Twitter, Snapchat, LinkedIn, Instagram, TikTok, and YouTube are all full of potential customers. 

Here are some general rules for social media marketing:

  • Post content often and regularly. 
  • Post content that’s interesting to users, not just sales pitches for your business.
  • Engage with users by replying to comments, taking polls, making quizzes, and running competitions. 
  • Switch up your content between written posts, videos, and photos. 
  • Always link back to your business website in your posts. 
  • Follow other profiles related to your industry. 

Even though they’re video platforms, sites like TikTok and YouTube can still be effective marketing tools. You can post simple video content, like:

  • Tutorial videos.
  • Product reviews. 
  • Footage from events and parties. 
  • Client testimonials. 

Email marketing

Believe it or not, email marketing is still one of the most effective ways to attract business. 

You can send newsletters and promotions straight to your followers’ inboxes, and even automate some processes to trigger emails at certain times. 

The hardest thing about email marketing for a new business is finding people to sign up to your mailing list. If you need some advice, check out our article, “How to build an email list for a startup”.

Traditional marketing

While a considerable amount of effort should go to your online marketing, some traditional tactics could also be effective. Try these for a start:

  • Hand out business cards.
  • Collaborate with local businesses that regularly host events.
  • Encourage your existing customers to leave reviews. 
  • Ask your friends and family to recommend your business.

Budget for startup costs

As a party rental business, most of your startup budget will go toward supplies and equipment. 

Stock and equipment

There are some general items that you’ll most likely need for every event, such as:

  • Tables and chairs.
  • Tents and canopies.
  • Signs and banners

Then there are the more expensive things you’d need for bigger events, such as:

  • Power supply and cables.
  • Lighting equipment.
  • A collapsable stage.
  • Sound equipment.
  • Visual effects equipment.

Finally, you’ll need to find a place to safely store all of your equipment. So, you’ll need to spend a fair amount on storage fees. 

Insurance

Just because you’re running your business from home doesn’t mean your regular home insurance protects your business. You’ll still need extra cover to protect you against the extra risk added by your business. 

You can get specialised home business insurance policies that include most of the common business cover, such as:

  • Public liability insurance. 
  • Professional indemnity insurance. 
  • Employers’ liability insurance. 
  • Business contents insurance. 

Get familiar with bookkeeping

Owning your own business means you’ll need to manage your own finances, so you should get familiar with some bookkeeping fundamentals.

Bookkeeping is the practice of recording and organising your business transactions to create useful financial reports. It can take a while to get the hang of, especially if you don’t have much accounting experience, so we’ll cover a few of the essentials here:

  • Cash flow.
  • Profit and loss statements.
  • Recording business expenses.
  • Invoicing.

Cash flow 

Cash flow describes the actual cash moving in and out of your business account. Tracking cash flow is important if you want an accurate picture of your business’ immediate financial health. 

The Countingup app has built-in accounting software that will show you real-time cash flow insights. You can see exactly how much is in your business account at any point with no data lag. 

Profit and Loss statements

With accurate financial data, you can create profit and loss statements.

They’re financial reports that show how much you’re spending compared to how much you’re earning, 

Accurate profit and loss statements can show you where your business is performing well and where it’s losing money. They can also be used to make tax estimates and apply for loans. 

Invoicing

Invoicing can take a lot of time, especially as you build your list of clients and customers, but it’s a lot easier and faster with the Countingup business app. 

With the Countingup app, you can: 

  • Create an unlimited number of customised invoices.
  • Add a logo to invoice templates.
  • Send invoices to customers.
  • Receive a notification when an invoice is paid.
  • Match a payment to an invoice.
  • Duplicate an invoice.
  • Change an invoice’s due date.

Business expenses 

To avoid paying too much tax, you‘ll need to get into the habit of recording your business expenses.

Here are some common categories for business expenses:

  • Office costs.
  • Travel costs.
  • Clothing expenses.
  • Staff costs.
  • Things you buy to sell on.
  • Financial costs.
  • Costs of your business premises.
  • Advertising or marketing.
  • Business-related training courses.

Because you’re running your business from home, you may be able to claim a proportion of your home running costs are business expenses too. 

You can claim for things like:

  • Heating.
  • Electricity.
  • Council Tax.
  • Mortgage interest or rent.
  • Internet and telephone use.

Normally, you’d have to keep records of your expenses and sort them into different HMRC categories, but the Countingup app can do that for you. 

The app’s automatic expense categorisation and receipt capture tool make it quick and easy to keep accurate, digital records of all your business expenses. 

Whenever you pay for something that could be considered a business expense, just snap a receipt, then they’ll be saved on the app and automatically sorted into HMRC approved categories.

Open a business current account

When running your own business, you should keep your personal and business finances separate from day one. If you don’t, it’ll lead to more time-consuming financial admin later on. 

When you sign up for a Countingup business current account, you’ll receive free accounting software with a range of time-saving tools. With features like automatic expense categorisation, invoicing on the go, receipt capture tools, tax estimates, and cash flow insights, you can confidently keep on top of your business finances wherever you are. 

You can also share your bookkeeping with your accountant instantly without worrying about duplication errors, data lags or inaccuracies. Seamless, simple, and straightforward! 

Find out more here.