How to price party rentals: build a party hire price list that pays

Many rental businesses start by copying a competitor's price list. That's a quick way to find out, a year later, that your linens cost more to launder than you charge for them. A rental price has three jobs: pay back the item, cover every cost each rental creates, and leave a margin.

#The formula

For each item:

True cost per rental = (purchase cost ÷ expected rentals over its life) + costs every rental creates

Price = true cost per rental ÷ (1 − your target margin)

Costs every rental creates include cleaning or laundry, repairs, packing, and a share of storage and admin. Price delivery, setup and breakdown as separate lines, because they depend on the order and the distance, not the item.

#Be honest about expected rentals

"Expected rentals" means how many times you'll really rent an item before it's worn out, lost or out of fashion, not how many times it could be rented. Most rentals happen on weekends and in peak seasons, and trendy items date quickly. If you're unsure, pick a lower number; it protects you.

#Worked example: a sample price list

Example figures only — use your own. Target margin: 60%.

Item	Purchase cost	Expected rentals	Per-rental costs	True cost per rental	Price
Folding chair	$25	60	$0.40	$0.82	$2.05
Chiavari chair	$45	50	$0.60	$1.50	$3.75
6 ft banquet table	$70	80	$0.80	$1.68	$4.20
Round tablecloth	$18	25	$3.00 (laundry)	$3.72	$9.30
20 × 20 ft frame tent	$1,800	40	$25.00	$70.00	$175.00

Look at the tablecloth: laundry is most of its cost, so a price based only on the purchase cost would lose money every time it goes out. The tent price covers the tent only; installation, which needs a crew and time on site, goes on the quote as its own line.

#Check the payback

Work out how many rentals it takes for each item to pay for itself: purchase cost ÷ (price − per-rental costs). The Chiavari chair pays back after about 15 rentals ($45 ÷ $3.15), and the tent after 12 ($1,800 ÷ $150). If an item needs more rentals to pay back than you realistically expect in its first year or two, rethink the price or the purchase.

#Delivery, setup and collection

Charge for these separately:

• Delivery and collection: by zone or distance, with a minimum charge
• Setup and breakdown: per item (for example, per chair set out) or by crew hours
• Stairs, long carries and timed deliveries: extra time means an extra fee
• Out-of-hours collection: late-night, Sunday or holiday collections

#Minimums, rental periods and extras

• Minimum order: so a delivery of six chairs still pays
• Rental period: price a standard period (for example, one day or a weekend) and charge for extra days
• Damage waiver or security deposit: a damage waiver is an optional, non-refundable fee that covers minor accidental damage; a security deposit is refunded when items come back in good condition. Say which you use in your terms.
• Late returns, extra cleaning and lost items: set these charges in advance

Take a booking deposit as well, to hold the date and the stock. See Event deposits: how much to ask for, and when the balance is due.

#A party hire price list for the UK

The same method works in pounds. If you're VAT-registered, show consumer prices including VAT, and build your margin so crossing the £90,000 VAT registration threshold doesn't wipe it out. Plenty of UK clients search "party hire price list", so a clear public list with "from" prices helps you get found and filters inquiries.

#Check against your local market

Once you know each item's floor, compare with local rental companies. Prices vary widely by city and by the quality of the stock. If you're well above the market on a basic item, recheck your expected rentals and per-rental costs. If you're far below, you're probably undercharging.

Related: How to start a party rental business from home.

Sarvyam puts your rental items on quotes with their real margins and reserves the stock by date once the client books. Start free at sarvyam.com.