Learning how to start a hot tub rental business is not difficult. You’ve come to the right place if you want to turn your hot tub passion into a home-based rental business. Apart from customer phone calls and hot tub delivery and pickups, the main advantage of starting a hot tub rental business is that you don’t have to be present all of the time to run it. Furthermore, the initial investment required to start a hot tub rental business is relatively small. This step-by-step guide will assist you in learning more about this business venture and determining whether it is the right next step for you as an entrepreneur.
1. Familiarize yourself with Hot Tub Rental Industry
Since the spa is always in demand, hot tub rental companies cater to certain demographics. Hot tub rental firms typically rent out a variety of hot tubs. Spa enthusiasts and those who do not want to spend a lot of fortune on buying hot tubs can borrow them for a short time. This service is perfect for those who only need a hot tub for one day or maybe a weekend. When you rent a hot tub, it is delivered to a certain location and returned at the end of the rental period.
People don’t have to worry about blowing their budget on a hot tub they’ll only use for a few days. Regular rental fees on hot tubs allow hot tub rental companies to benefit from their one-time purchase and perhaps scale their business by purchasing additional hot tubs in the future.
Market Research
Most hot tub rental businesses cater to residential clients. Moreover, party organizers and hotels/resorts can also be regular clients of a hot tub rental business. Their typical target market includes those interested in the spa, hydrotherapy, relaxation, sports, or maybe just chilling on the weekends.
With so many uses, a hot tub rental business may be highly lucrative if you target the right customers. A hot tub can make life much more enjoyable, and this rental business will assist anyone who requires a hot tub on a temporary basis. Both new and used hot tubs are reasonably priced. As a result, if you want to break into the rental market, beginning a hot tub rental business is an ideal choice.
How much does it cost to buy a hot tub?
Hot tubs start at $12,000 and go up from there. However, for more luxurious hot tubs, you can expect to spend $18,000 plus. Therefore, if you want to start a hot tub rental business, you’ll need at least four standard hot tubs and one luxury hot tub, which would cost around $65,000 in total.
How much does it cost to start a hot tub rental business?
For just $75,000, you could establish a basic hot tub rental business. (assuming you purchase four standard hot tubs and one luxury hot tub). The allocation of around $10,000 for marketing and other related expenses could help you get your business off to a great start. If you want to operate on a larger scale and provide a variety of hot tub alternatives, you’ll need to start with at least 10 hot tubs, which costs around $130,000. As a result, beginning a large-scale hot tub rental company will set you back at approximately $150,000. (hot tub plus marketing and other related costs).
Remember that you may either buy used hot tubs or buy as you grow if you want to save money. You would be able to save at least 30% if you go through used hot tub routes. If you don’t mind a little hard work, hot tub rental is one of the best businesses to start and grow.
Is the hot tub rental business profitable?
A hot tub rental business can be incredibly profitable if you conduct a thorough market analysis. The success of your hot tub rental business will be determined by the number of customers you can attract. A single standard hot tub will cost around $12,000. You can also rent the same hot tub for $350 per week to other businesses. To recuperate your whole investment, you’ll only need to lease a hot tub for at least 34 weeks. It’s all profit after that for you. In addition, unlike car rentals, hot tubs require very minimal maintenance. All you need to take care of a hot tub is some basic water chemistry knowledge and some cleaning chemicals.
Is the hot tub rental business worth it?
It is definitely worthwhile to start a hot tub rental business. You might begin your business with just one hot tub. Best of all, you may start a hot tub rental business by purchasing used hot tubs. Each week, a standard hot tub can make between $350 and $400. Furthermore, this business is extremely scalable, and by reinvesting a portion of your income, you may soon grow it to a million-dollar rental business.
2. Plan your Hot Tub Rental Business
The planning step is critical to the success of any business. The hot tub rental industry is in the same boat. Let’s take a look at some of the key steps to consider while beginning your hot tub rental business.
Choose a name for your hot tub rental business
Whether you’re starting a hot tub rental company or a forklift rental company, you’ll need a name that symbolizes your beliefs and viewpoints.
Keep in mind that the legal business name must comply with state naming laws in the states where you intend to operate; otherwise, the state may refuse to accept the documents filed to incorporate or qualify the firm.
Before settling on a business name, it’s also a good idea to talk about branding and how it will affect your hot tub rental business. The key question is whether your legal business name will also be your brand name or whether your brand name will be distinct from your legal name.
To be honest, when you initially start out, it’s best to utilize your legal business name as your brand name. Why? You’re welcome to inquire. This is because it simplifies things, is really straightforward, and is substantially less expensive.
Some states, however, require you to use your surname as the official name of your firm if you manage an informal business (sole proprietorship, limited liability partnership, or general partnership).
Would it bother you if your last name became your legal business name? You can move on to the next stage if the response is yes. If your response is no, though, please bear with me.
If you don’t want to use your surname as your legal business name, you must file a Fictitious Business Name Statement with the county where your hot tub rental business’s main office is located.
Shopify’s Business Name Generator comes in helpful when it comes to coming up with brandable names for your hot tub rental business. Make three last checks after you’ve decided on a name for your hot tub rental firm.
- First, check your State’s business name database to see if your desired business name is available.
- Second, do a domain name search to check if your business name is available as yourbusinessname.com. If it is available go ahead and register the domain before anyone else gets it. BlueHost offers domain names free of cost if your purchase a 1-year hosting package with them. You can use the tool below to see if the domain name is available.
- And lastly, do a federal search on the US Trademark Electronic Search System and make sure nobody has already trademarked your name.
If your hot tub rental business name is available, you can trademark it, but don’t worry about it for now. It’s a time-consuming process that’ll cost you around $600. I’d rather spend my time and money on advertising.
Hot Tub rental business plan
At the absolute least, you’ll need a compelling business plan to launch a profitable hot tub rental business. A well-written business plan should outline the company’s main goals and how it intends to accomplish them. A hot tub rental business plan’s purpose is to make your company appear competent and appealing to potential lenders and investors.
Overall, your company will need a well-written and functional hot tub rental business plan. You’d be rushing around like a headless chicken without it.
A compelling business plan has many sections, some of the must-includes are:
- Executive Summary
- Business Description
- Market Analysis
- Competitor Analysis
- Services to Offer
- Competitive Pricing Strategy
- Marketing Strategy
- Fundings
- Financial Projections
You may create a professional-looking business plan with applications like BizPlan and Enloop. Don’t be cheap and hire someone to draft a business plan for your hot tub rental company for $5. Producing professional, high-quality work will be required.
3. Register your Hot Tub Rental Business
You must first register your hot tub rental business in order to legally operate it. You must first study and choose a business structure before registering a hot tub rental firm. Because how you set up your hot tub rental business may affect your taxes and legal obligations, you’ll want to make an informed selection.
Consider the following example of a typical business structure:
Sole Proprietorship
This form of unincorporated business is owned by a single person or a married couple. Your business will not need to register, and your taxes will appear on your personal tax return.
General Partnership
In terms of registration and taxes, it is similar to an unincorporated business with numerous owners. It also runs similarly to a sole proprietorship model.
Limited liability company (LLC)
In the event that your business is sued, a registered corporation provides personal liability protection to all of its members. You have the option of taxing your business as a partnership or a corporation.
When it comes to forming an LLC for your hot tub rental business, Incfile is one of the greatest options. Their prices start at $0 plus filing fees. These expenses are frequently tax deductible.
Corporation
S-corporations and C-corporations are the two most frequent types of corporations. The type of corporation you incorporate will determine the taxes you pay.
4. Register for Taxes and Obtain an EIN
You must always observe the law as a personally liable business owner. This means that all applicable tax, licensing, and labor laws must be obeyed. In the long run, taking the effort to learn about any legal laws that might apply to your hot tub rental business might save you a lot of time, money, and frustration down the line. What taxes you must pay and how you must file will be influenced by the type of business entity you pick, as well as other features of your hot tub rental business. Consult a tax professional as soon as possible to guarantee you’re on the right track.
You’ll need an employer identification number if your hot tub rental business employs others. This is also known as a company’s EIN or tax identification number. You may get an EIN for free from the IRS online and use it to file taxes for your hot tub rental company. To open a business bank account, get a business credit card, or apply for a business loan, you’ll need it. Obtaining an EIN offers various advantages, even if you do not intend to hire staff.
5. Get Funding for your Hot Tub Rental Business
Even if you have the best hot tub rental business in the world and can capture the hearts of your customers from miles away, if you don’t have enough money, your business will fail. It may seem counterintuitive, but you must first have money in order to make money. It is impossible to deny that buying a hot tub is an expensive investment. If they weren’t so expensive, everyone would purchase one, and the hot tub rental industry would be obsolete. Not to mention paying exorbitant rent, marketing your service, and paying employees’ wages and benefits.
Hot tub rental companies can take advantage of a variety of incentives, subsidies, loans, and equity investments. Regardless of the funding source you choose, you must have the following documents of your hot tub rental business(at a minimum):
- A Hot Tub Rental Business Plan
- Projected Financial Statements
- Tax returns of both the business owner and the business itself (when available)
- An explanatory document on how the money will be used
- A description of services offered by your hot tub rental business
After you’ve done the number crunching and figured out how much money you’ll need for your hot tub rental business, you may look into the following choices.
- Obtain funds through SBA-backed lenders (Wells Fargo, US Bank, MidFirst Bank, etc.)
- Get funding through Banks
- Obtain funds through P2P lenders (Prosper, Peerform, Lending Club, Funding Circle)
6. Promote your Hot Tub Rental Business
For some reason, most business owners do not include marketing in their business planning. This is likely to be one of the most costly errors you can make, so avoid it at all costs. Marketing and promotion may make or break a service-oriented firm like a hot tub rental business. Furthermore, if you do not have a huge amount of money to invest right immediately, you must know how to correctly promote a hot tub rental company. It is critical to have a sound marketing plan as well as effective communication tactics.
Let’s take a look at some traditional and modern hot tub rental marketing tactics.
Build a Website
This is something I can’t emphasize enough. To run a hot tub rental business, you’ll need a website. There’s no getting around it. Your hot tub rental company must have one as well because the world has gone digital.
Make the most of the internet’s resources. In addition, your hot tub rental website should be distinct and consistent with your brand. Offer photographs of your hot tubs as well as testimonials to generate a lasting impact on your visitors. Actions, after all, speak louder than words.
Remember to include your hot tub rental website’s mission statement. Also, tell your consumers why they should rent from you. A website gives your hot tub rental company a digital presence, allowing potential consumers to search for and find you online.
Check out my tips for creating a simple website for your small business, if you want to do it yourself. We can assist you if you’d want someone else to handle the technical aspects of your hot tub rental business while you focus on attracting new customers. A professionally built website, unique email, 24/7 support and maintenance, SEO, and digital marketing services are all included in our $499 digital bundle. This is an opportunity you do not want to pass up. Before the offer expires, please contact us as soon as possible.
Establish social media accounts
Create social media accounts for your hot tub rental company to give it a digital presence. You must be selective in this regard since you do not want to waste time by appearing on every social media platform available, especially those that do not target your target market.
You want your hot tub rental business to be on, depending on the size of your operation:
- YouTube
These days, almost everyone uses social media to communicate with friends and family, as well as shop for goods and services. Getting your hot tub rental business in front of your target market will result in more leads and cash. It can also be used to keep current customers informed and attract new ones.
Run Paid Ads
Paid adverts allow you to target certain demographics and geographic areas, making them an excellent tool for your hot tub rental company. Use platforms like Facebook Ads, Yelp, or Google AdWords for sponsored advertising. Sponsored promotions yield quick results, allowing you to expand your hot tub rental business both vertically and horizontally.
If you need expert advice on running paid adverts for your hot tub rental business, please contact us. We will gladly provide you with free assistance and materials.
