As with all businesses, it takes determination and hard work to run a venue rental company. Owning a building or space is not enough. To be successful in a venue rental business, one would need to manage the permits and accounting, as well as the marketing and customer service. The bottom line is that, although it’s rewarding and fun, it’s still business.
The good news is that it’s a booming industry. Oxford Economics claims that the event industry yields $845 billion in business revenue and $325 billion of direct spending. However, venues account for a large portion of this amount.
The U.S. Bureau of Labor and Statistics anticipates that this trend will continue and estimates a whopping 11% industry from now through 2026.
Wedding Venue Rental In An Industrial Design Theme Is Popular In The Event Planning Industry.
There is still a lot to be learned here. This guide should help any aspiring entrepreneur to get started on the path of owning a profitable rental business.
Towards the end of this article I will answer some of the most frequently asked questions on how to start a venue rental business…
To identify the right audience for this business, it is important to evaluate the market. And this should be the priority for anyone looking to launch a venue rental business.
The needs of the community that a business owner would like to cater to will dictate what type of venue is fitting to build. Perhaps there isn’t anyone in the area who has a 30,000 square feet ballroom, but the question is, “Are there any events that would need this amount of space?”
These are the important things to think about when starting a venue rental business. This market research and data will then be the driving force behind any marketing engine.
Once the target audience is identified, the next task should be to create the business strategy. This is often lengthy and in-depth as it details everything about the business. If this is to be useful, it needs to be as well researched as the target audience is.
A business plan should include budgeting for the first six months (Acquiring business credit cards is beneficial for the business operations). Also, allot about 30% for any overages in construction. This percentage is typical for any rental venue business.
Apart from understanding the cost of building a special events venue, it’s also important to consider the marketing side of things.
Make sure the right pricing is in place before booking any customer walkthrough. Is the pricing too high?
Is it too much?
Knowing the needs of the target audience, the price points of the competitors, and operational costs such as overhead, mortgage / rent payment, staffing, food, beverage, and utilities, will help determine the pricing.
This will allow the venue owner to set the right price that will satisfy any customer and keep the business afloat.
Setting the pricing is an important part of a business plan. This goes back to understanding the market. To ensure that the pricing is consistent with what other providers charge for similar services, it should be included in the market research.
Justify why there is a need to charge a premium if you so decide. Similarly, consider why you would charge less or offer a discount and how in the long run it would benefit the business.
Some venue owners start by setting lower prices to attract more clients. Once they have cash flowing in, they can adjust their rates upward.
These are the things to keep in mind before identifying the pricing or pitching any rental space.
Party or wedding venue owners do experience slower off seasons. These are times when the event space is empty.
Most venue managers know that there will be dark periods when no one rents. This is why it’s important to get the decision right away. Is it wise to rent or buy?
Or try to generate income through self production?
The planning process involves such important questions and more.
Some venue owners may decide to provide entertainment for their guests, such as music performances or seasonal parties, on the days when the venue isn’t occupied.
It can be an excellent way to attract new business and cushion the business income. However, additional marketing and event planning are required to achieve this.
Off-premise catering is also an option if full-service catering is offered. This can help maximize revenue from a full-service kitchen. But remember, it comes with its own challenges too, like marketing, handling full-time kitchen staff, delivery, and many others.
The first step is to find the exact building you want to use as a venue. Most likely, the creativity of would be venue owners is sparked as soon as different spaces are visited and possibilities are envisioned and imagined, which is great.
There are also certain factors to consider when looking for a particular location.
Does the area have enough space to accommodate another venue? It might be a good idea to search for buildings in different parts of town if there is a plan to open a small concert venue.
Once the type of venue and building is decided, the venue owner can now start exploring the nitty-gritty details.
Event Venue Business: Know What Your Expenses Will Look Like Ahead Of Time
Although expenses may vary depending on which type of venue is being created, there are fixed monthly expenses.
Depending on the type of business, word of mouth is something that can work than rely on expensive advertising. Some form of maintenance is still required depending on the physical condition of the building or space. And working with a smaller staff can also be a cost-cutting measure.
Most importantly, there will be an amount that business owners need to generate each month to break even. It is important to know what that number is as soon as possible. This will give an indication as to what the price range should be. If that price is too expensive to compete with businesses in the area, costs need to be reduced or venue owners need to find a way to gain an edge in the competition.
Aspiring venue owners need to know these things because this is absolutely important for starting a rental company.
There may be other costs that require capital investments, such as security system installation or furniture placement.
A common rookie error is to spend way too quickly. While it might be wonderful to have top-quality audio/ visual equipment right away, is it really necessary?
Although some venue owners may like to provide premium silverware and plates for catered events, for example, these are unnecessary costs at the start.
Let the caterers manage it.
After steady income is earned from regular bookings, examine the business’ financial position and determine strategic goals to enhance the services offered.
It is important to know how to remain legal when starting a rental space business. Multiple local permits and licenses are likely required.
Liquor licenses are required for anyone selling alcohol on the premises. To ensure that fire exits are properly marked and that everything is up to code, a fire inspector will need to visit the premises.
There are usually some limits on the maximum legal capacity as well. It is possible that the venue owner would have to regulate or manage the noise after a specific time.
It is important to have the right type of insurance for the company. General Liability Insurance, Umbrella Insurance, or Liquor Liability Insurance, among others, are some of the options available.
Best is to check local regulations before the business operates.
Experts suggest that when designing a venue space, a unique element should be created but at the same time is flexible enough to cater to other events and setups. In recent years, more event planners have been seeking out unique and novel venues.
Unique spaces are a trending topic in venues for the past five years. Clients do not want to book events at empty meeting rooms or ballrooms.
Clients desire a unique space with interesting shapes, grounds or flexible decor. It is important to plan ahead what can be done to the space to ensure that it stands out.
It doesn’t necessarily have to be outrageous or expensive. It could be interesting paint options or programmable lighting.
Event planners are keen to show the wow spirit at events and post the results on social media. This means that the event venue needs to be unique enough to make it stand out from other conference venues, but also flexible enough to fit the vision of the event planner.
The space should be spacious and flexible to accommodate different sizes of parties – from groups of 25 to 500. This means that the rental venue can be divided to smaller spaces to allow for smaller groups, or to host multiple parties that overlap.
It is essential that the venue and meeting rooms are ready to host weddings, birthday parties and corporate events. This is possible by marketing and building the target audience before the ribbon-cutting ceremony.
It’s harder for venue owners to fill the calendars if the website hasn’t been set up and a following online via social platforms hasn’t been created (especially Facebook, Instagram, Pinterest) before the opening day.
Rent or mortgage and all other utility costs are some of the major expenses that need to be paid. If there is no social media following yet, it would be extremely difficult to find the funds to start covering all of these expenses.
It is important to have all the necessary systems and software in place before receiving any bookings. Venue owners make costly mistakes by skipping this important component in the planning process.
Experts recommend to create a PlanningPod account immediately to begin managing bookings and marketing efforts. Planning Pod makes it easy to create reusable templates, such as contracts, proposals or invoices.
Dry runs are a great option for both new and experienced venue owners. A dry run can help the team work out any kinks and make the clients feel more confident.
Potential clients can visualize their space in different ways, which helps them get an idea if venue owners can accommodate their requirements.
Once everything is in place, the rental business is now ready to open. It’s a smart idea to host a soft-opening party or a similar event, inviting local influencers and journalists.
It’s possible to make this more specific depending on the type of venue. Hosting a cocktail party for local wedding planners if the venue is primarily used for weddings is a good idea. This is also a perfect place and time to recommend your venue to other couples. Everyone loves to wine and dine.
Consider also digital advertising via Facebook ads or Google ads. This is something that some people have experienced great success with.
In this way, customers can find rental venues and easily book. This not only protects them but will also help the venue owners save a lot of time.
It’s not easy to start and manage a new event rental company but the returns of this endeavor in the long term are worth it.
Our review team has come across a program in the real estate industry that is next level!
Although it’s not real estate in the traditional sense, it’s all digital.
With this digital real estate program, you can have the ability to completely walk away from manual labor!
Sound too good to be true?
Of course it does!
But it isn’t…in fact, business owners wish they had this skill!
All you have to do is build and rank a website and forward the jobs off to a business owner in town, you could even email it to them!
This works for literally any service based business, tree service, plumbing, towing, etc.
Simple, after you forward the jobs off to a business owner and he makes some money off of them, you simply ask to make the deal beneficial for each other.
A fair price to charge per lead, depending on the industry is 10-20%…let’s just use the tree service industry for example and go by worst case scenario.
Let’s say you build and rank the site and only 20 jobs a month come in. The average tree service job is anywhere from $500-$2000!
That means at bare minimum you have an asset worth $1000 a month!
See why they call it digital real estate now?
That’s a rent payment.
The great thing is how easy it is to scale. You don’t have to answer the phone…all you have to do is get the phone to ring.
Unlike the passive income ideas I mentioned earlier…
This one actually allows you to collect that without working in a brick and mortar business all day.
Truly passive income!
The training program takes making money online to a whole other level. The owner of the program walks you through how to build and rank a site hand in hand, with the occasional voice over when he is sharing his screen.
You will learn the importance of keywords, website name, how to send call notifications via email, backlinking, etc.
Once the training program is completed you will also have access to a Facebook group where you can ask questions and be in a community with others on the same journey as you.
Digital real estate allows you to have passive income with most of your day being spent OUT of the brick and mortar landscape.
Now, I know you probably have tons of questions… So, check this out to learn more.
To ensure the highest level of accuracy and the most recent up to date information Scam Risk is regularly audited and fact check by following very strict guidelines. All the content on Scam Risk meets the following criteria.
We use the highest level of authority sources such as: FTC (Federal Trade Commission), ICPEN (International Consumer Protection and Enforcement Network), Academic Associations & Journals are used for research reference while creating this content.
Feel free to contact us if you feel this data is incomplete or questionable.