Advice on a Starting a Furniture Rental Business
August 22, 2006 1:45 PM Subscribe
I am a college student looking to start up a furniture rental business for University students but don't exactly know where to start. ANY advice would be greatly appreciated.
I think you need to give us a little more information so we can help you. Location? Do you need us to tell you what to rent? Do you need us to tell you how much to rent it for? You should probably redefine your question just a bit.
posted by MeetMegan at 2:46 PM on August 22, 2006
posted by MeetMegan at 2:46 PM on August 22, 2006
I think you'll be competing with the already established Rent-to-Own furniture stores that are found in every large college town and poor community (well, actually, that depends... where are you?). Study the evil, customer screwing business plan of the average furniture and appliance rental store, and try to come up with something less heinous.
But, I think your proposed business has a low chance of success. For example, as a KU student, I have the options of renting a fully furnished apartment (many are), living in a furnished dorm, using second hand furniture (there's a lot of decent furniture floating around that is cyclically offered up for the taking as people graduate and leave), going to the thrift store, or getting furniture from the parents as they buy new stuff. It seems like your market is relatively small and you already have well established (if evil) competition.
posted by Derive the Hamiltonian of... at 2:58 PM on August 22, 2006
But, I think your proposed business has a low chance of success. For example, as a KU student, I have the options of renting a fully furnished apartment (many are), living in a furnished dorm, using second hand furniture (there's a lot of decent furniture floating around that is cyclically offered up for the taking as people graduate and leave), going to the thrift store, or getting furniture from the parents as they buy new stuff. It seems like your market is relatively small and you already have well established (if evil) competition.
posted by Derive the Hamiltonian of... at 2:58 PM on August 22, 2006
Try contacting the SBA (Small Business Administration) and google around to see if there are small business incubators in your area. They should be able to help you develop a business plan at no cost to yourself. They can also help you estimate your upfront costs and the time commitment to start a business. And they can help you figure out what kind of financing will best help get you off the ground.
posted by croutonsupafreak at 3:17 PM on August 22, 2006
posted by croutonsupafreak at 3:17 PM on August 22, 2006
Response by poster: I am hoping to provide a resource for students on a campus with a unique living situation. Basically, students live on campus the first and second year then move off campus Junior year and almost all must move back on senior year. During their third year, students live in the city and almost all rentals come unfurnished. Most stundents then must shell out money for brand new furniture such as matresses, couches, and desks and then are forced to sell them to other students at a fraction of the cost or store it once they move back onto campus senior year.
I feel like this is the same problem caused by high text book prices and fairly easy to alleviate. (students are now exchanging and selling books to each other rather than purchasing them at campus book stores then selling them back at a mere fraction of the cost)
The research I have done so far has shown that almost none of the students rent furniture from existing companies because it is not advertised on campus, it is often too expensive, and most are not their style of furniture (targeting businesses and higher income families).
I would like to start a company that targets and markets to these students by renting furiture that is student friendly such as those sold at ikea (econmomical, yet still stylish). I want to provide stundets with a online interace where it is easy for them to go online and chose the furniture they like and have it delivered and removed at the end of each school year. This, I believe solve both the problem of having to buy brand new furniture for just one year and also the incredible hassle of having to move the furniture in and out.At some point I would also like to rent electronics such as televisions and stereo to students.
I am not sure what is the best way to go about starting this company as there are many facets to be concidered such as storage, costs, and advertising. I am also not sure how the supply chain would work. Should I 1) Buy used furniture that people are getting rid of from craigslists or various other sources or 2) Try and find a wholesaler to provide inventory.
Sorry for the longwinded reply. I wanted to keep the original post breif, but it seems like most of you wanted more information. Thank you all so much for advice.
posted by nyu2 at 3:32 PM on August 22, 2006
I feel like this is the same problem caused by high text book prices and fairly easy to alleviate. (students are now exchanging and selling books to each other rather than purchasing them at campus book stores then selling them back at a mere fraction of the cost)
The research I have done so far has shown that almost none of the students rent furniture from existing companies because it is not advertised on campus, it is often too expensive, and most are not their style of furniture (targeting businesses and higher income families).
I would like to start a company that targets and markets to these students by renting furiture that is student friendly such as those sold at ikea (econmomical, yet still stylish). I want to provide stundets with a online interace where it is easy for them to go online and chose the furniture they like and have it delivered and removed at the end of each school year. This, I believe solve both the problem of having to buy brand new furniture for just one year and also the incredible hassle of having to move the furniture in and out.At some point I would also like to rent electronics such as televisions and stereo to students.
I am not sure what is the best way to go about starting this company as there are many facets to be concidered such as storage, costs, and advertising. I am also not sure how the supply chain would work. Should I 1) Buy used furniture that people are getting rid of from craigslists or various other sources or 2) Try and find a wholesaler to provide inventory.
Sorry for the longwinded reply. I wanted to keep the original post breif, but it seems like most of you wanted more information. Thank you all so much for advice.
posted by nyu2 at 3:32 PM on August 22, 2006
Just one note of caution - how are you going to deal with the inevitable wear-and-tear that student furniture normally undergoes? While not every student is a careless, clueless party animal who gets cigarette burns and curry stains on the furniture, lots are (I shared houses with plenty!). I'm not trying to dissuade you, it sounds like you have identified a local market, just proposing something else to take into consideration.
posted by Joh at 4:23 PM on August 22, 2006
posted by Joh at 4:23 PM on August 22, 2006
Response by poster: Because rentals would be made online with a credit card, I was considering including a pre-purchase renters agreement stating that any damage inccurred after the delivery of the item would be charged to the credit card. Although many rental companies use this to screw the customer, I am hoping to be very honest and only charge customers the actual ammount it cost to repair any damages.
What do you think?
posted by nyu2 at 4:35 PM on August 22, 2006
What do you think?
posted by nyu2 at 4:35 PM on August 22, 2006
Although many rental companies use this to screw the customer
That's what your customers will expect of you, then, just like you'd expect it of another anonymous company.
But seriously, it's a complete waste of time to think about any of the details if you haven't figured out how you are going to get all this furniture, where you are going to store it, how you are going to get it into apartments, and what you are going to do when people are ready to return it.
(Also, given the junior year scenario that you described, I'd be surprised if your rentals would survive what must be a very active used-furniture market.)
posted by mendel at 5:46 PM on August 22, 2006
That's what your customers will expect of you, then, just like you'd expect it of another anonymous company.
But seriously, it's a complete waste of time to think about any of the details if you haven't figured out how you are going to get all this furniture, where you are going to store it, how you are going to get it into apartments, and what you are going to do when people are ready to return it.
(Also, given the junior year scenario that you described, I'd be surprised if your rentals would survive what must be a very active used-furniture market.)
posted by mendel at 5:46 PM on August 22, 2006
I'm not an expert on business or furniture, but it seems to me that you'll have to shell out for sturdier furniture than you're used to buying. In my experience, if you take a cheap Ikea desk apart and put it back together again yearly, it'll be dead within a few years. And that was when I owned the desk myself, and had spent an enormous (to a freshman) amount of money on it.
posted by nebulawindphone at 5:49 PM on August 22, 2006
posted by nebulawindphone at 5:49 PM on August 22, 2006
Response by poster: I had the same worries about ikea. Although it is economical and stylish, I was doubtful about the durability. Any ideas on who I could use as an affordable furniture supplier or for storage?
posted by nyu2 at 6:47 PM on August 22, 2006
posted by nyu2 at 6:47 PM on August 22, 2006
Uh, you're not planning on paying retail for furniture, are you?
Right now, figure out how little you think you could spend on furnishing one student's apartment. Couch, coffee table, tv stand, TV, desk, kitchen table and chairs, bed, night-table, dresser? Think you can come under $1000 for that? It'd be tough, especially once you have to buy a mattress.
Now how many apartments are you going to furnish in your first year of operation: 100? Suddenly you need $100,000 in capital just to buy your furniture, and you haven't even started to think about paying for storage, movers, advertising, legal advice. How's your credit rating?
How much are you going to charge to rent $1000 worth of furniture for a year? $200 a year? All your furniture better last for five years just to get back the cost of the furniture. You still won't have made any money; you won't have even paid for any non-capital costs yet.
You need a business plan, but you won't like what it tells you. I don't see how any of this could ever be profitable.
posted by mendel at 7:23 PM on August 22, 2006
Right now, figure out how little you think you could spend on furnishing one student's apartment. Couch, coffee table, tv stand, TV, desk, kitchen table and chairs, bed, night-table, dresser? Think you can come under $1000 for that? It'd be tough, especially once you have to buy a mattress.
Now how many apartments are you going to furnish in your first year of operation: 100? Suddenly you need $100,000 in capital just to buy your furniture, and you haven't even started to think about paying for storage, movers, advertising, legal advice. How's your credit rating?
How much are you going to charge to rent $1000 worth of furniture for a year? $200 a year? All your furniture better last for five years just to get back the cost of the furniture. You still won't have made any money; you won't have even paid for any non-capital costs yet.
You need a business plan, but you won't like what it tells you. I don't see how any of this could ever be profitable.
posted by mendel at 7:23 PM on August 22, 2006
Response by poster: As far as cost minimization, I was thinking of either 1) finding a furniture wholesler (still probably going to be fairly expensive)
2) Buying used furniture for cheap off of craigslists and students moving back onto campus or
3) The middleman approach: Advertising on campus to students and then renting from the Rental Companies and providing the movers to move students in and out of their apartments, thus eliminating a need for inventory and storage. If the student damages the furniture, I will charge them as much as the rental company charges me for repair. This strategy probably will not work out for the long haul, but once revenue is generated, I would consider buying furniture wholesale from retailers such as ikea with the profits or selling the company and website to the actual rental company.
That you all for the input, it is really helping me organize my thoughts.
posted by nyu2 at 8:53 PM on August 22, 2006
2) Buying used furniture for cheap off of craigslists and students moving back onto campus or
3) The middleman approach: Advertising on campus to students and then renting from the Rental Companies and providing the movers to move students in and out of their apartments, thus eliminating a need for inventory and storage. If the student damages the furniture, I will charge them as much as the rental company charges me for repair. This strategy probably will not work out for the long haul, but once revenue is generated, I would consider buying furniture wholesale from retailers such as ikea with the profits or selling the company and website to the actual rental company.
That you all for the input, it is really helping me organize my thoughts.
posted by nyu2 at 8:53 PM on August 22, 2006
You're in NYC. Furniture comes free on the sidewalk and free/ as cheap as a rental from craigslist. In my apartment, mattress and dining table were from my parents' basement, everything else was sidewalk, apartment lobby, or cheap on Craigslist. My friends' apartment has a living room with two couches, coffee table, dinner/work table, big screen TV, stereo, TV stand/cabinet, and another cabinet, of which one table was purchased on craigslist for about $20, and the rest was street/apartment lobby.
Consider that as both your competition and as a potential source. You may want to focus on mattresses, couches, or futons that people will be less willing to take from an unknown used source.
On your side, I've certainly met enough lazy rich NYU kids who are probably more ready to spend daddy's money to rent a couch than to haul one a couple blocks themselves. (I've also met hard-working, serious-about-their-studies NYU kids with no money.)
posted by TheOnlyCoolTim at 11:55 PM on August 22, 2006
Consider that as both your competition and as a potential source. You may want to focus on mattresses, couches, or futons that people will be less willing to take from an unknown used source.
On your side, I've certainly met enough lazy rich NYU kids who are probably more ready to spend daddy's money to rent a couch than to haul one a couple blocks themselves. (I've also met hard-working, serious-about-their-studies NYU kids with no money.)
posted by TheOnlyCoolTim at 11:55 PM on August 22, 2006
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My guess is that you're going to need a HUGE outlay of money. You're going to have to buy a lot of decent furniture that will fit into your market (are you renting to dorm rooms or apartments?) and you'll have to have movers and trucks. You'll have to rent a storage area for all of this stuff to fit in. You'll probably need insurance of some sort for the moving and the furniture.
You'll also need to look at legal ramifications - rental contracts, what happens if you have someone who doesn't pay or who steals the furniture, etc.
Have you done any local research? Are you sure there's a big enough market for this? Do you know what type of furniture people are interested in? What about electronics? Does the university in your area already have a contract with a rental company, or is that something you'd be interested in doing?
Again, research.
posted by bibbit at 2:46 PM on August 22, 2006