Party supply stores offer supply rentals, costumes, party favors, seasonal items, balloons, decorations and disposable silverware items. They’re a one-stop-shop for anything seasonal, often revamping entire product lines to take care of seasonal crowds. They’re often prioritized providers on Halloween, Christmas and birthdays due to their niche products and services.
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Learn how to start your own Party Supply Store and whether it is the right fit for you.
Start a party supply store by following these 10 steps:
- Plan your Party Supply Store
- Form your Party Supply Store into a Legal Entity
- Register your Party Supply Store for Taxes
- Open a Business Bank Account & Credit Card
- Set up Accounting for your Party Supply Store
- Get the Necessary Permits & Licenses for your Party Supply Store
- Get Party Supply Store Insurance
- Define your Party Supply Store Brand
- Create your Party Supply Store Website
- Set up your Business Phone System
There is more to starting a business than just registering it with the state. We have put together this simple guide to starting your party supply store. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
Exploring your options? Check out other small business ideas.
STEP 1: Plan your business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How much can you charge customers?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening a party supply store?
A party supply store’s initial investment is about $90,300. This accounts for all certifications, insurance and products. A starting party supply store needs to obtain a number of products, including paper products, decorations, banners and tablecloths. It will also need a full line of wedding accessories, such as cake tops, server sets and similar items. Halloween costumes, candy and entertainment supplies will need to be purchased. In some cases, an additional $10,000 in startup expenses will exist, channeled into etching and engraving machinery.
What are the ongoing expenses for a party supply store?
As a rule of thumb: For every $1 spent on labor, operators can expect to spend $0.30 on capital investment. These investments are minimal, and yearly expenses can be as low as $15,000. These expenses account for utility costs, annual rent, product sourcing and advertising. Assuming the party supply store is of average size, and in a profitable shopping location, a rent expense of about $3,000 per month is acceptable.
Who is the target market?
A party supply shop’s best customers will be seasonal “holiday shoppers.” Holiday shoppers may shop exclusively at a party supply store during Christmas, Halloween and the Fourth of July. That said, holiday shoppers can often be rushed. For this reason, an ideal shopper will be one who doesn’t exploit holiday product return policies. Because holiday-purchased items aren’t useful during non-holiday hours, product purchase exploitation frequently happens.
How does a party supply store make money?
While a party supply store can make money year-round, much of its revenue will be gained during the holidays—specifically Halloween. A store makes money by selling costumes, party favors, candy, balloons, costume makeup and decorations. Several party supply stores offer bounce house, fogger and professional party display rentals, too. If a party store offers such big-cot rentals, they frequently limit their availability. Again, a party supply store’s ability to maximize sales greatly depends on its customers’ holiday and party needs. Often, a party supply store is a local area’s only provider of costumes and specialty holiday products. It simply isn’t profitable for department stores to carry such items, year-round.
How much can you charge customers?
Basic party supplies should cost between $4 and $15, depending on their use. High-demand, disposable items like paper cups, plates and banners will be slightly less expensive. Costumes, meanwhile, will need to be priced competitively while also making money. Average costumes should be priced between $40 and $80, depending on their complexity. Low-quality costumes—and child costumes—can be sold for about $20. Candy, balloons and other small, bulk-purchase items can be sold for under $5.
How much profit can a party supply store make?
A party supply store can make a little over $100,000, if it’s operating efficiently. Once expenses, investments and advertisement are paid, a party supply store manager can make approximately $57,000 per year. Assistant managers can expect to make approximately $33,000 per year.
How can you make your business more profitable?
Attract local support. Once your business has grown, vary its services to suit monetary needs. A party supply store capable of offering the area’s only bounce houses, professional displays and specialty costumes will thrive. Effective cost control, too, will help a costume supply store thrive.
What will you name your business?
Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Party Supply Store Name Generator
When registering a business name, we recommend researching your business name by checking:
- Your state's business records
- Federal and state trademark records
- Social media platforms
- Web domain availability.
It's very important to secure your domain name before someone else does.
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your party supply store is sued.
Form Your LLC
Read our Guide to Form Your Own LLC
Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services. You can choose to hire a registered agent or act as your own.
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
Small Business Taxes
Depending on which business structure you choose, you might have different options for how your business will be taxed. For example, some LLCs could benefit from being taxed as an S corporation (S corp).
You can learn more about small business taxes in these guides:
- LLC Taxes
- Sole Proprietorship vs LLC
- LLC vs Corporation
- LLC vs S Corp
- How to Start an S Corp
- S Corp vs C Corp
There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Additionally, learning how to build business credit can help you get credit cards and other financing in your business's name (instead of yours), better interest rates, higher lines of credit, and more.
Open a business bank account
Besides being a requirement when applying for business loans, opening a business bank account:
- Separates your personal assets from your company's assets, which is necessary for personal asset protection.
- Makes accounting and tax filing easier.
Recommended: Read our Best Banks for Small Business review to find the best national bank or credit union.
Open net 30 accounts
Net 30 accounts are used to establish and build business credit as well as increase business cash flow. With a net 30 account, businesses buy goods and repay the full balance within a 30-day term.
NetMany net 30 credit vendors report to the major business credit bureaus (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how businesses build business credit so they can qualify for credit cards and other lines of credit.
Recommended: Read our best net 30 vendors, guide and start building business credit.
Get a business credit card
Getting a business credit card helps you:
- Separate personal and business expenses by putting your business' expenses all in one place.
- Build your company's credit history, which can be useful to raise money later on.
Recommended: Apply for an easy approval business credit card from Divvy and build your business credit quickly.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
Make LLC accounting easy with our LLC Expenses Cheat Sheet.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a party supply store. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
For information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
Certificate of Occupancy
A party supply store is usually run out of a storefront. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws and government regulations have been met.
- If you plan to lease a storefront:
- It is generally the landlord’s responsibility to obtain a CO.
- Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a party supply store.
- After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
- If you plan to purchase or storefront:
- You will be responsible for obtaining a valid CO from a local government authority.
- Review all building codes and zoning requirements for you business’ location to ensure your party supply store will be in compliance and able to obtain a CO.
STEP 7: Get business insurance
Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.
There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.
Learn more about General Liability Insurance.
Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners, we'll give you helpful tips and advice for creating the best unique logo for your business.
If you already have a logo, you can also add it to a QR code with our Free QR Code Generator. Choose from 13 QR code types to create a code for your business cards and publications, or to help spread awareness for your new website.
How to promote & market a party supply store
Promote before, during, and after the holidays. Printed ads and local Facebook advertisements are your friend. Your marketing plan should focus on bulk items and unique party displays. Don’t worry about luxury rental product marketing—like bounce houses and Hollywood-level costumes. These items will promote themselves. Holiday shoppers want quick, accessible and cheap items. Over Halloween, they’re looking for unique costumes, affordable makeup and cheap, disposable gag items
How to keep customers coming back
To attract customers, focus on pre-holiday events. Partner with local shops who’re hosting monthly events and parties. Use printed ads. Promote on Facebook, Twitter, and Instagram. To retain customers, create a return policy which both makes the business profitable while giving customers the freedom to exchange and return products at need. High-quality party supply stores are reliable, have unique options and—above all—have great prices. Because the party supply business hungers for sales, prices are usually sky-high. By offering low prices, you’ll keep year-round customers.
Still unsure about what kind of business you want to start? Check out the latest Small Business Trends to help inspire you.
STEP 9: Create your business website
After defining your brand and creating your logo the next step is to create a website for your business.
While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.
Here are the main reasons why you shouldn’t delay building your website:
- All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
- Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
- Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.
Using our website building guides, the process will be simple and painless and shouldn’t take you any longer than 2-3 hours to complete.
STEP 10: Set up your business phone system
Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.
There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use. Check out our review of the Best Business Phone Systems 2022 to find the best phone service for your small business.
Recommended Business Phone Service: Phone.com
Phone.com is our top choice for small business phone numbers because of all the features it offers for small businesses and it's fair pricing.
Start a Party Supply Store in your State
- District of Columbia
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Rhode Island
- South Carolina
- South Dakota
- West Virginia
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Is this Business Right For You?
A party supply store is often a small business. While large party store chains exist, any who own or manage a local party store will need to enjoy small business operations. Perfect for party-lovers, retail gurus and fun-loving store owners, a party supply store is an excellent business for those interested in advertising, professional selling, and merchandising.
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Take our Entrepreneurship Quiz to find out!
What happens during a typical day at a party supply store?
A party supply store needs to be a preferred location during the holidays, due to its niche product stock. For this reason, day-to-day activities during holiday hours are drastically different than during non-holiday hours.
Over the holidays, a holiday supply store owner must handle rush orders, filing go-back items, handling costume fittings, managing increased product shipments, creating a custom return policy, and prioritizing customer service. During non-holiday hours, an owner must be able to conduct the regular responsibilities associated with any small business owner. In-house finances, marketing, management, promotion, and shop upkeep are important.
While owners shouldn't focus on product upkeep too much, several items in part stores—due to their disposable nature—may need to be replaced over time. Party supply stores often face slow periods when holidays aren’t near. These time periods deserve extra attention, so as to keep the shop operational.
What are some skills and experiences that will help you build a successful party supply store?
Above all, a strong sense of finance and marketing is needed. Because party supply stores face considerable difficulties with year-round financing, a strong grasp on local economics, product sourcing, and promotion is needed. A successful party supply store owner is often well-read in local customer needs, too.
A knack for customer service is also important. During holiday hours, a party supply store can become hectic. All staff should be capable of handling tough customer decisions. Professional selling, a background in retail—specifically clothing—and knowledge of current trends certainly helps. Because Halloween is a notoriously party-store-centric holiday, having knowledge about current costume favorites is a must.
What is the growth potential for a party supply store?
Party supply stores do have difficulty growing. Because they’re in a niche product and service category, they often have financial growth and scaling difficulties during non-holiday hours. For this reason, larger chains like Party Land and Party City dominate the market. A party supply store can, however, become a local area’s preferred location rather easily. Party supply store franchises certainly exist, but they’re difficult to obtain.
Take the Next Step
Find a business mentor
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Learn from other business owners
Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
What are some insider tips for jump starting a party supply store?
Prepare for holiday hours well before they arrive. Party supply retailers face exhaustive considerations, and they’re constantly facing slow periods capable of shutting down the entire establishment. Market analysis, cash flow projections and a firm grasp on profits and loss is vital. During Halloween, local shoppers will flock to whichever location has the most expansive product line. If you can provide unique, low-cost or bulk costume items, you’ll dominate your area’s market for a very important month.
How and when to build a team
You only need a team of two to three workers in the beginning. Fortunately, a party supply store is—basically—a small retail outlet. Have a worker to manage back-of-the-house supplies. Have another worker engage customers. The final worker should work at the register. Build your team to at least five before the holidays roll around, however. During the holidays, accidents and theft aren’t only possible—they’re likely.