business plan of linen

How to Start a Linen Rental Business

By: Author Tony Martins Ajaero

Home » Business ideas » Fashion Industry

Do you want to start a wedding linen rental business? If YES, here is a complete guide to starting a linen rental business with NO money and no experience .

Even though linens are mostly used in weddings, everyone in some way needs linens and this is because most people use them as curtains. There are so many uses of linens apart from curtains and on weddings as they can be used as napkins, towels, tablecloths and floor rugs.

This therefore has made starting the linen rental business very lucrative. If you are looking to start a linen rental business, you will be renting out linens to all those who need them in whatever way. Also, starting the business might not be as capital intensive as other businesses, making this a good business for any entrepreneur looking for something small to start.

No matter how small the capital needed to start a business, you must endeavour to conduct a market research on the business so that you do not waste your time and resources going into a business that will eventually fail. Once you have conducted the necessary market research for the business, you will need to write out a comprehensive business plan that will outline all the layout of your business.

Before going into the linen rental business, it is necessary that you take proper care of the linens that will be regarded as your inventory.

If you take care of your inventory properly, it will help increase their lifespan. In order therefore to ensure that your linens maintain their integrity whether in your care or out of it, you can ensure that your clients also take proper care of the linens when it is in their care.

You can enforce this care by either including a security deposit in your rental contract or in your terms and conditions which will make them liable should anything go wrong with your linens under their care.

Steps to Starting a Linen Rental Business

1. understand the industry.

The linen supply market in the united states of America is lumped with the industrial laundry industry and it is worth billion. The industry is one that has seen an annual percent growth rate of 3.6 percent between the periods of 2012 to 2017.

There are more than 4,400 industrial laundry and linen supply businesses in the United States of America employing more than 117,400 people and this industry is a bit fragmented as very few companies dominate the industry. The industry has also experienced a slump as the current level of employment still remained low as before the recession.

The linen supply and laundry industry is one that includes renting out a variety of mats, linens, uniforms as well as other fabric based products whilst also providing laundering services for businesses.

The demand for services in this industry has come mostly from sectors and industries such as accommodation, manufacturing and food services and due to the volatility in these sectors especially during the economic downturn, revenue declined.

Revenue has however started increasing slightly from 2012 as the industries and sectors dependent on this industry have started recovering moderately.

Most of the linen and uniform supply companies majorly rely on suppliers from overseas for not only the supplies but also for the equipment. Most of these garments and textiles usually come from China, Bangladesh, Mexico, Cambodia, Indonesia, Pakistan, Nicaragua as well as Vietnam.

Linen supply companies usually take care of aprons, beddings, tableware, hospital scrubs and gowns, as well as cloth napkins.

Therefore, the US linen and uniform supply service industry has nearly 2,500 establishments which consist of single units as well as companies with multiple locations which all brought in a combination of more than $13 billion. The linen rental business is also one that falls into the party supply rental market according to IBISWorld.

This market has no companies that completely dominate the industry with their market share. The market is valued at $5 billion annually and has a 4.3 percent growth from the periods of 2011 to 2016.

There are more than 11,900 party rental businesses in the United States of America, employing more than 49,000 people. The market is highly dependent on the stability or growth of the economy as consumers will only expand their budgets for parties and the demand for party supply rentals once their income improves.

Operators in this industry usually provide their clients with linens, tables, tents, chairs, decorations as well as other miscellaneous supplies that can be used for both indoor as well as outdoor events.

Even though the fall in the rate at which people married has limited the demand for rentals, there has been growing confidence in the industry that has boosted consumers’ confidence especially between the periods of 2011 to 2016 as more individuals and businesses have started hosting events that has spurred demand in the industry thereby boosting revenue for and growing the industry.

According to research from prweb, the party supply rental industry experienced strong growth before the recession; however the downturn of the economy caused most individuals, households and businesses to cut back on how much they spent for discretionary items.

This therefore forced consumers to reduce the budgets for their events and also host fewer parties which therefore led to a decline in demand. This therefore led to the industry’s revenue falling at an average of 0.3 percent from the period of 2006 to 2011.

However, demand has been solely increasing from late 2010 as the economy has improved along with the confidence of the consumer.

2. Conduct Market Research and Feasibility Studies

• Demographics and Psychographics

The demographic and psychographic composition of those who require the services of a linen rental business cannot be limited to just those that host weddings or have events but also to those who use linens for other purposes as well. Therefore in defining the demographics of your linen rental business, it is essential that you understand the market you are going into in order to better be able to decide who your customers are likely to be.

3. Decide Which Niche to Concentrate On

In starting your linen rental business, it is essential that you study the industry properly in order to understand how you will carve out a market share for yourself as well as stand out from others. Even though there are not much niches in the linen rental business, you can still decide on concentrating on just a segment for your business.

A niche is a specialized segment of the whole market and while it is easy enough for some businesses to offer several niches in order to get a major share of the target market, it is not possible for all businesses especially those running on a tight budget.

Therefore, if you are starting your business on a tight budget, it will be best if you concentrate on just a few niches. Below are niche areas you can look into whilst starting up your linen rental business;

• Flat linen rental and cleaning
• Linen garments rental and cleaning
• Supply of bed linens
• Supply of table linens

The Level of Competition in the Industry

In order to be able to compete in this business, the location you are in matters a lot because customers will want to look at what they are renting and what condition they are in before renting them. It will also not make a whole lot of sense to hope for clients far from your base since rentals are to be used and then returned after use.

Companies in the same area often compete amongst themselves by ensuring that they keep their linens in good quality by cleaning it themselves and also that they are able to offer rates that are competitive. Also, companies try to offer other services in addition to linen rentals in order to be able to keep a firm hold on their target market.

If you are therefore looking to start your linen rental business in the United States of America, you will do well to remember that even though there are few operators in this sector as compared to other industries, competition is still rife especially as demand for services is still low after the recession and so you must be ready to compete with others in the industry.

4. Know Your Major Competitors in the Industry

In every industry, there are brands that stand out and this is due to the fact that there are several factors that they take into consideration such as marketing and promotion, length of stay in the industry, rates and quality of service. The linen rental industry is no different as there are brands that stand out here as well.

Below therefore are some of the well-known linen rental companies in the United States of America;

• UniFirst Corporation
• Cintas Corporation
• G&K Services Inc.
• Aramark Corporation

Economic Analysis

Budgets for events have decreased a bit as clients are becoming more stringent on how they spend which has caused a drop in revenue for the industry, expectations are still high regarding an increase that will see the industry become the way it was before the recession.

Due to the fact that business has slowed in the industry, operators have started offering value added services in order to remain relevant and continue to generate the revenue that they would need for their business. Even though the industry is one that has improved, patronage is still low and while some owners are looking for how they can still remain relevant, others have simply closed shop.

The recession period saw a lot of businesses being acquired by those that were of large scale as the number of businesses in the entire industry dropped even though many companies discounted their rates in order to survive.

5. Decide Whether to Buy a Franchise or Start from Scratch

If you intend to buy a franchise for your business, it is important that you study the franchise companies in order to determine if what they are offering are in line with your set goals and objectives. However, this industry is one that is too fragmented and as such there are no companies that stand out much less offer franchise opportunities.

Instead the industry has seen a lot of acquisition especially during the recession. This therefore leaves the option of starting your business from the scratch which is no easy option for any entrepreneur.

There are several things that must be looked into when starting your business from scratch and they are, target market, how you intend to attract and keep customers, what you intend to charge, the quality of your services, and your competition.

All these can be overwhelming for an entrepreneur just starting out, which is why you should start small if you have no experience at all and then grow from there. The good thing about starting your business from scratch is that it allows you to be in control of your business which means that you can make changes where appropriate.

6. Know the Possible Threats and Challenges You Will Face

Just like any other business, any entrepreneur starting the linen rental business should be ready to face challenges and threats that if not handled properly might lead to the demise of the business.

If you are not prepared as an entrepreneur for threats and challenges in your business, then it would be easy for them to overwhelm you, which is why having a business plan is very important in order to know what threats and challenges you are likely to face when starting your linen supply business.

Therefore some of the challenges and threats that you are likely to face when starting or running your linen supply business are; threats from new entrants, the bargaining power of those supplying you linens, bargaining power of those renting your linens, competition and rivalry from already existing competition and the threat of substitution.

7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)

There are four basic legal entities for any entrepreneur looking to start a business in the United States of America and they are sole proprietorship, partnership, corporation and Limited Liability Company (LLC) and they all fall into two categories; the incorporated and the unincorporated.

When choosing a legal entity, it is best to consider certain factors such as taxation, liability, ease of ownership and control as well as flexibility. If you are confused on which would best suit your business, then it is advisable to engage the services of a lawyer with experience in your kind of business to advise you on which legal entity would best suit your business.

The LLC kind of legal entity is similar to that of the corporation, the only difference is that it is less rigorous than that of a corporation. Also, in an LLC, owners are taxed on their personal income returns. These two entities fall under the incorporated kind of legal entity.

8. Choose a Catchy Business Name

In starting a business, it is important to choose a name that is unique, memorable and attractive and indicative of the industry you are in.

Choosing a business name can be very difficult and many entrepreneurs have stalled their businesses too long because they haven’t found a suitable name for their business, while those that have chosen a name without having two or three more as alternatives have found themselves stuck because someone else has chosen the name.

Below are catchy business names that are suitable if you are starting your linen rental company in the United States of America;

• Linkin Services Inc
• D&S Linen Rentals
• Posh Patty Rentals
• Linens and Mo’ Corporation
• Luxury Linens Inc

9. Discuss with an Agent to Know the Best Insurance Policies for You

Having insurance policies for your business is very important and the authorities in the United States encourage it because they know how much the business can end up saving in the long run.

Having insurance saves you from so much heartache, it is important therefore that you know what insurance is right for your business. Approaching insurance agents or brokers is considered wise as they will help in choosing what insurance policies would be best for your business and also how much you would need to set aside.

Below therefore are some of the insurance policies you should consider purchasing if you are looking to start your linen rental business in the United States of America;

• Auto Insurance
• General Insurance
• Liability Insurance
• On-site Insurance
• Workers’ Compensation Insurance
• Property Insurance
• Business Owners’ Policy (BOP)

10. Protect your Intellectual Property With Trademark, Copyrights, Patents

The linen rental business is one that is a service oriented business and as such, you do not need to bother yourself with applying for an intellectual property protection and this is because, not only is the process rigorous and requires money, it can even take a while.

While most entrepreneurs in this industry do not consider getting an intellectual property protection a priority, there are some that have applied for IPP on their company name, logo, slogan and several materials they deem important. If applying for one is what you want and you have the money with which to accomplish it, then you should go ahead.

11. Get the Necessary Professional Certification

The linen rental business is a service oriented business and as such there is no professional certification of any sorts needed. Clients don’t care about anything else but that you are able to supply quality linens that are in good condition.

If you have to take any certifications of any sort, it can be in business management, marketing or accounting but clients in this industry are not too concerned about this.

12. Get the Necessary Legal Documents You Need to Operate

In starting your linen rental business, it is important that you have the necessary legal documents in order not to run into any problems with the law.

If you do not know what kind of documents you need for your business, it is best to approach the city council, an accountant or a lawyer who will have all the information you need regarding legal documents for your business. Below are some of the legal documents that you would need to be able to start and run your linen rental business;

• Certificate of Incorporation
• Operating Agreement for LLC
• Insurance Policies
• Business Plan
• Business License and Permit
• Special Taxation License
• Employer Identification Number (EIN)
• Federal Tax Identification Number
• Contract Document

13. Raise the Needed Startup Capital

As an entrepreneur, it is important that you have the necessary finance that you would need in order to start your business. While this is ideal, it is not always so as not all entrepreneurs have the start-up capital they need and so usually have to source for startup capital externally.

While this might look demanding and tasking but it is what an entrepreneur has to go through, which is why it is important that every entrepreneur put together a comprehensive business plan as this is what can be used to gain the attention of private investors.

Also, the business plan shows that you are serious and committed about the business which you intend to start. Some of the financing options that you should therefore explore when sourcing for startup capital include;

• Using part of your savings or sale of stock as part of your startup capital
• Sourcing for soft loan from family members and friends
• Approaching private investors for loan
• Getting start-up capital from business partners

14. Choose a Suitable Location for your Business

Deciding where you will locate your business is very important as the location of your business has a high impact on how your business is likely to progress. If you are starting your business on a tight budget, you can run your business from home as long as you have a place to store your equipment and your inventory.

However, if you look at your competition and find that most of them have leased or rented a place to run their business, then it is necessary that you also look to renting a place for your linen rental business so that you can be able to compete with others and look professional to your clients as well.

When choosing a location, ensure that it is one that can be easily accessible and convenient to locate. If you choose a place that is so far out, then you might be putting your business at risk as you would not only lose a lot of customers but you will also spend more to keep your business visible to your remaining clients.

Setting aside a budget for the facility you intend to lease is very important as it will help you not to cause a strain on your overall budget before you have even started the business. Engage the services of a real estate agent or tenant broker to help with sourcing for a location and facility that will be highly suitable for your linen rental business.

15. Hire Employees for your Technical and Manpower Needs

In starting your linen rental business, it is important that you acquire the necessary knowledge regarding the business. Even if there are no technical skills required from anyone starting this business, knowing about linens and how to care for them so as to be able to rent them out for as long as possible is a must especially if your intention is to grow and succeed in your business.

What make entrepreneurs stand out from others in this business is where they get their supplies from and how reliable their suppliers are, while some suppliers have an integrity to protect, others not so much. Therefore, it is important that you conduct a thorough research that will help you identify suppliers you will need for keeps and those you will need to discard.

You do not need much equipment in starting your linen rental business as this is a business where you will be lending out supplies in good condition and hopefully receive these supplies in the same condition in which you gave them out.

Some of the equipment that you would require for your linen rental business are ones that can be gotten for fairly used, especially as they are capital intensive in nature. Therefore the equipment you will require in order to run your business efficiently includes; power machines, commercial grade laundry machines, delivery van, phone, computer and accounting software.

It is important to build the right business structure for your business if you intend to succeed in your business. Ensure that you acquire employees that are not only proficient but also understand and align with your set goals and objectives.

While this is a business that you can run yourself, you would need to employ others especially if you intend to run the business on a certain scale. Some of those you would therefore need to employ are; Chief Executive Officer (CEO), Office Manager, Marketing Executives, Accountant, Front Desk Officer and Driver.

From the above breakdown, you will need at least 6 key people to help achieve your set goals and objectives regarding your linen rental business.

The Service Delivery Process of the Business

There is really no service delivery process when it involves running a linen rental business. In however starting your business you would need to know where you can get your supplies and how reliable your suppliers are. You must get in touch with them and let them send samples first.

Having one supplier might not be so good as there are times you might run into hitches which will require you to fall back on alternative but also reliable suppliers. Once you have created a good relationship with your suppliers, you will get tips and advices from them as to how well you can expand the life of your linens.

In supplying linens to your clients, you must create a contract document where they must agree to terms and conditions regarding how to take proper care of your linens while in their care. Alternatively, you can get them to make a security deposit that will only be returned back if your linens come back in good condition.

16. Write a Marketing Plan Packed with ideas & Strategies

Marketing one’s business is a way by which the entrepreneur tries to anticipate the needs of his or her intended target market and then tries to meet these needs. Before you can correctly determine what your target market wants, you will need to conduct a thorough market survey as this is the only way you can easily penetrate the market and get a sizeable share of the market.

In conducting a market survey, it would mean knowing what niche you intend going into, the target market for that niche, what they are expecting from you, what you should expect from them, what rates will be best and who your competitors are.

It is only after the market survey has been conducted that you can craft your marketing goals and objectives in line with your overall corporate goals and objectives and look for means by which you can achieve it.

Many entrepreneurs usually employ the services of marketing consultants who have the experience needed to help create marketing strategies that would generate revenue and grow the business in line with the set goals and objectives. Below are some of the ideas and strategies that can be used to market your linen rental business successfully;

• Encourage your loyal customers to help give testimonials that would attract more people
• Ensure that your business is listed in yellow pages as well as in online directories
• Empower your marketing executives to market your linen rental business to potential clients
• Ensure that you distribute handbills and fliers in various strategic places
• Place adverts for your linen rental business in local newspapers and magazines as well as on radio and television stations
• Place adverts on popular forums and blogs in order to create awareness and market your services to your intended audience

17. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity

If you want your business to grow and be recognized, then you must boost the awareness of your brand. There are several advantages to promoting a business which is why large companies do not mind spending a fortune annually to promote and publicize their brand.

The internet has made it very possible for entrepreneurs just starting out to be able to promote and publicize their businesses to as many customers as possible without causing a deep strain on their pockets. An entrepreneur can make use of websites and social media platforms to push the publicity of its business.

There are also various means offline that an entrepreneur can use in order to promote and publicize a business. Some of these offline means aren’t expensive and one could explore as many effective publicity channels as possible. Below are some of the channels that you can use to boost the awareness of your brand as well as create a corporate identity for your company;

• Make use of social media platforms such as Facebook, Twitter, Instagram and Snapchat to promote your linen rental business
• Create a website and use this to promote your business
• Join your local chamber of commerce in order to network and promote your business
• Distribute handbills and fliers in strategic locations
• Create a distinct logo and slogan in order to make your business stand out from others
• Join or sponsor a community program and use this to attract the necessary attention to your linen rental business

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