smallbusiness.co.uk: Helping your business think big

Fancy dress hire is quite a seasonal business, with Christmas being both a blessing and a nightmare. All the costumes go out over Christmas but have to be back in and laundered in time for New Year parties!

Other busy occasions are Valentine’s Day and possibly Easter. Apart from these special days, the main sources of business will be corporate entertainment events, such as medieval banquets or theme nights. As the business is so patchy, many costume hire businesses have another trading activity running alongside to smooth out the irregularities.

The British Costume Association (www.costumiers.org) can be helpful about suppliers. Try phoning them on 01425-620300. The Association tells me that there are two kinds of fancy dress business: one rents through party stores and the other hires out higher-quality costumes. The party-store kind usually deals with importers rather than manufacturers. Manufacturers prefer not to deal with the ‘man-in-the-street’ and so it would be more productive to contact the Association, which is a trade association.

There are quite a lot of pitfalls. For example, don’t forget the continuing expenses, such as cleaning and repairs. There is also the problem of fire retardancy: the responsibility currently falls on the owners of the costumes.

Be wary of licensing and copyright problems. There may be only one licensed source of a costume, so watch out for rogue manufacturers.

Finally, you have to be alert for trends in costume hire. Braveheart kilts, 80s revivals, Austin Powers – even mr Blobby has had his day. With a typical cost of £100 per costume, and an average hiring fee per customer of £20, you’re going to have to work hard to cover your overheads. Draw up some very careful cash flow plans to ensure that you have sufficient resources to set yourself up and keep yourself going until you have passed the breakeven point - which could be quite a while.