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How To Start A Bounce House Rental Business

How To Start A Bounce House Rental Business

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How To Start A Bounce House Rental Business

How To Start a Bounce House Rental Business

As a child, bounce houses were the highlight of birthday parties, and that tradition continues today. Now, bouncy houses have evolved into more elaborate inflatables that include slides, obstacle courses, and more. Starting an inflatable bounce house business can be a lucrative career move. With most rentals being scheduled on weekends, it’s possible to start a smaller business while continuing to work part-time, making this industry more financially accessible than some other business options.

Running a successful bounce house rental business involves more than just having technical know-how and in this guide, we will explore the necessary steps to start a bounce house rental business.

Business Overview

Bounce house businesses rent out inflatable houses and other items, including games and obstacle courses. These businesses supply these products to consumers who are hosting a birthday party, wedding, or other special event and who want a fun entertainment feature.

Most rentals are for a full day, though some businesses may offer half-day or multi-day rentals. A bounce house business is responsible for delivering and assembling the house, then disassembling and removing the house at the end of the rental period.

Starting your own bounce house business can be a great choice if you’re looking to continue working part-time while also starting your own business. Because most rentals occur on weekends, it’s possible to start off part-time in this industry while continuing to work at another job. That schedule can have its downsides, though, and you’ll need to be prepared for the fact that you will be working most weekends and holidays. Business can also be largely seasonal in climates with cold winters.

Industry Summary

The party and event planning industry, where the bounce house rental business is a subset. According to IBIS World, the bounce house supply rental industry experienced a slight dip in annual revenues, which were driven by the Covid pandemic. The bounce house rental business plays a significant role within this sector, largely driven by consumer spending and disposable income.

The demand for bounce house rentals tends to be seasonal, with higher demand during warmer months when outdoor parties and events are more prevalent. Therefore, understanding the seasonality of the business is crucial for managing cash flow and inventory.

Despite its promising outlook, this industry faces challenges that prospective entrepreneurs need to take into account. These include stringent regulations surrounding children’s safety, intense competition, and the effects of adverse weather conditions on operations.

Several trends are affecting the bounce house industry, and business owners need to be able to adapt to these trends to stay competitive. Goodshuffle Pro reports that inflatable games have become more popular, with inflatable basketball, bowling, and jousting games being top picks for birthday parties and more. Inflatable obstacle courses have also emerged, and some incorporate water slides for ideal summertime entertainment.

Choosing the right types of inflatable rentals to purchase can be integral to your success. Fun Times Party Rental recommends that you invest in gender-neutral houses when you start your business, which are more versatile. Themed bounce houses only appeal to a specific audience, and when you’re just getting started, you’ll need a base inventory that can work for all sorts of different parties and occasions. As you get to know your audience, you can add new products every year to increase your appeal and expand your business’ versatility.

Bounce houses may traditionally be for birthday parties and festivals, but couples are increasingly seeking them out for wedding receptions, too. All-white bounce houses are ideal for this setting, and while the upkeep is more demanding, businesses can charge higher rental fees for these specialty houses.

Target Market

A bounce house rental business may have multiple target markets. The business may market toward parents who are looking for entertainment for a kid’s birthday party, or the business might also market to couples who are getting married and who want a fun, unique reception.  The business may also focus on corporate events or fundraisers.

Event planners are another important target market, and they can be a source of valuable referrals.

Checklist To Start A Bounce House Rental Business

If you’re thinking about starting a bounce house rental business, it’s important to do your research first. Here is a checklist to help you get started.

Step 1: Conduct market research

Researching market demand is a fundamental step in starting any business, including a bounce house rental business. Understanding the market demand can provide a wealth of information that is critical to the success of your business for several reasons:

Feasibility Assessment: Understanding the demand helps you gauge the feasibility of your business idea. If there’s insufficient demand for bounce house rentals in your intended area, your business may struggle to generate enough revenue to stay afloat.

Business Planning: Researching demand can help you make informed decisions about how to price your services, which types of bounce houses to invest in, and even when to operate, given that this business can be highly seasonal.

Risk Mitigation: Understanding market demand helps mitigate the risk of business failure. The more accurately you can predict demand, the better prepared you’ll be to meet your customers’ needs without overextending your resources.

Here are some ways to research whether there’s a market for a bounce house rental business:

1. Competitor Analysis: Look at existing bounce house rental businesses in your area. If there are several already operating successfully, it’s a good indicator of demand. Analyze their offerings, pricing, and customer reviews to understand what customers value and what gaps may exist in the current market.

2. Online Research: Use online tools like Google Trends to gauge the popularity of bounce house rentals in your area or nationally. Social media platforms can also give insights into people’s interest in bounce house rentals.

3. Events and Party Planning Agencies: Reach out to local event planners, schools, churches, or community centers. They often organize events and could provide insights into the potential need for a bounce house rental business.

4. Local Business Associations or Chamber of Commerce: These organizations often have valuable data about local businesses and can provide insights into the local market demand.

By conducting a thorough market research, you can validate your business idea, make informed decisions, and increase the chances of your business success.

Step 2: Create a business plan

With an understanding of the market, the next step is to write a business plan. It not only guides you in launching and managing your business but also helps convince potential investors or lenders of your business’s viability.

a well-crafted business plan is not only a tool for securing funding but also a roadmap that guides your business decisions and strategies. Tailoring your plan to highlight key aspects of your bounce house rental business can go a long way in ensuring its success.

For a bounce house rental business, while all sections of a business plan are important, certain areas might require extra attention when seeking funding:

Market Analysis: Lenders and investors will be interested to see evidence of demand for your business. Detailed market research and competitor analysis demonstrate that you understand the market landscape and are prepared to carve out a niche for your business.

Marketing and Sales Strategy: How you plan to attract and retain customers is crucial. Discuss your pricing strategy, advertising and promotion plans, sales strategy, and customer service approach. In a competitive market like bounce house rentals, a robust marketing strategy can set you apart.

Financial Projections: Detailed, realistic financial projections, including a break-even analysis, income statement, and cash flow statement will be used to evaluate the potential feasibility of the business.

Related: How to write a business plan

Step 3: Secure funding

A bounce house rental business can be started with a very small budget, and in many cases is funded with the owner’s personal funds.

Should the startup costs be more than what the owner has available, there are other funding options. One common choice is obtaining a small business loan from a bank, which may or may not need to be backed by a Small Business Administration (SBA) loan guarantee.

Business credit cards can also be used to manage cash flow and finance smaller purchases, but they usually come with higher interest rates.

Last, seeking investment from friends and family is another common funding option. This often involves presenting your business plan to convince them of your business’s potential profitability. It’s important to have clear agreements in place to maintain personal relationships if the business encounters difficulties.

Related: Finding the money to start a business

Step 4: Register for business licenses and permits

Starting a bounce house rental business involves several legal considerations to ensure you’re operating within the law. Here are some steps you should take:

Form a Business Entity: Typically, bounce house rental businesses operate as either a Limited Liability Company (LLC) or a Sole Proprietorship. An LLC is often preferred as it provides personal liability protection, meaning your personal assets are protected if your business is sued. Each business structure has its own tax and legal implications.

Related: Comparison of business structures

Business Name Registration: After registering the business structure, you may need to register your business name. This process will vary depending on what business structure you pick. Sole proprietors and partnerships will often be required to register a “Doing Business As” (DBA), while corporations and LLCs register with the state during the formation process.

During this time, it’s also a good idea to check if the name you want is available as a web domain, even if you’re not ready to set up a website yet.

Related: Finding a domain name for your business

Business Licenses and Permits: Depending on where the inflatables will be set up, some areas may require an amusement or inflatables permit.

In addition to specific permitting, there may be a few additional general business registrations that may be needed for a bounce house rental business including a local business license, sales tax permit, Employer Identification Number, and Occupancy Permit, among others.

Related: What licenses do bounce house rental businesses need?

Health and Safety Regulations: In addition to licensing, a bounce house rental business may be required to adhere to health and safety regulations set out by your state or local health department. This may include ensuring your bounce houses are cleaned and sanitized regularly.

Step 5: Purchase equipment

Once the funding is in place, it’s time to start having fun and purchase your equipment.

When researching equipment, consider opting for high-quality, durable commercial inflatables that can withstand frequent use. While they may cost more upfront, quality bounce houses typically require less frequent repair or replacement, saving you money in the long run.

Safety should also be a top priority. Look for bounce houses that come with safety features such as netted windows, reinforced stitching, and strong, secure anchors. Consider additional safety accessories such as mats for entrances/exits and sandbags for indoor setups.

Last, think about the size and weight of the bounce houses when deflated. You’ll need to store and transport them regularly, so they should be manageable and fit within your storage and transportation means.

Step 6: Establish a marketing strategy

Marketing for a bounce house rental company requires creative strategies that directly reach and resonate with your target audience.

One highly effective method is leveraging partnerships with local event planners, schools, community centers, and children’s party venues. By offering them incentives or commissions for referrals, you can tap into their extensive networks.

Participating in local events and fairs is another excellent way to gain visibility. By setting up a booth or providing a free bounce house, you can showcase your products, interact with potential customers, and create a memorable experience that could lead to future bookings.

Digital marketing should also play a key role. Building a visually engaging and user-friendly website with search engine optimization (SEO) can help potential customers find your business online. Social media platforms like Facebook, Instagram, and Pinterest are also excellent channels for showcasing your bounce houses, sharing customer testimonials, and promoting any special offers or discounts.

Email marketing can also be effective for keeping in touch with past customers and encouraging repeat business. You could send out regular newsletters with special promotions, new product offerings, or party inspiration.

Finally, consider leveraging customer reviews and testimonials. Encourage satisfied customers to leave reviews on your website or platforms like Google and Yelp. Positive word-of-mouth referrals are incredibly valuable and can significantly enhance your business’s reputation.

Remember, effective marketing requires consistency and responsiveness to customer feedback. By employing these strategies, a bounce house rental business can build its brand, attract more customers, and ultimately drive growth.

Related: Low-cost ideas to market a new business

Step 7: Prepare to launch your bounce house rental business!

While we have gone over the most common steps to start an inflatable rental business, every situation is going to be unique. The specific needs of your business might differ based on factors such as your location, target market, and business model.

There are likely a few more steps to take before starting your bounce house rental business, which includes:

Business Insurance: As a bounce house rental business, having adequate insurance is critical to cover any accidents or damages that may occur during rentals. Ensure you have a comprehensive bounce house insurance policy that includes general business liability insurance and property insurance at a minimum.

We recommend checking with local providers and online companies like Coverwallet or Hiscox and getting three quotes to get the best pricing and coverage.

Setting Up Bookkeeping: Establishing an efficient system for managing your finances is vital. This includes tracking income, expenses, and taxes. You might consider using bookkeeping software like Wave Accounting (FREE) or Quickbooks, or hiring a bookkeeper or accountant.

Contracts: Your business will need professionally drafted rental agreements that cover terms and conditions, liability waivers, and cancellation policies. Depending on your business model, you may also need contracts for partnerships or collaborations, such as with event planners or venues.

RocketLawyer and Law Depot have free and inexpensive templates that may be helpful.

Business Bank Account: Opening a business bank account separate from your personal account is crucial. It not only simplifies bookkeeping but also keeps your personal assets separate for liability purposes.

Set Pricing: Determine competitive but profitable pricing for your services. This will depend on various factors, including the cost of your equipment, operational expenses, and prices set by competitors in your area.

Payment System: Set up a reliable and convenient payment system for your customers. Many businesses today offer multiple payment options, including credit cards, online transfers, or mobile payment platforms. Popular options include Square or Stripe.

Preparing for the Grand Opening: Plan a grand opening event to generate buzz and attract your first customers. This could involve partnering with a local charity or community event where you offer free or discounted rentals.

This material is property of StartingYourBusiness.com

Greg’s Tip: When setting prices, be sure to not undervalue your time. What many new bounce house rental business owners overlook is the time and effort involved in setup and teardown of the bounce houses, which can collectively take up to two hours per rental. This should be considered in addition to the rental time of the bounce house itself.

Greg's Business Tip

Common Questions When Starting A Bounce House Rental Business

How much does it cost to start a bounce house rental business?

Starting a bounce house rental business involves various upfront and operational costs. The total startup costs can range between $10,000 to $50,000 depending on the size and scale of your operation. This estimate includes the costs of purchasing inflatables, transportation, storage, insurance, legal expenses, marketing, and other necessary equipment.

The major costs include:

Equipment: High-quality commercial bounce houses typically cost around $1,000 to $3,000 each. If you plan to start with a few different options, this can be your most significant initial expense.

Vehicle and Trailer: You’ll need a reliable vehicle and trailer to transport your bounce houses, which can range from $5,000 to $20,000 depending on whether you buy new or used.

Storage: Depending on the number of bounce houses you have, you may need a storage facility which can cost around $100 to $300 per month.

Insurance: The cost of insurance can vary significantly depending on your location, the size of your operation, and other factors, but you might budget around $2,000 to $3,000 per year.

Legal and Licensing Fees: These fees can range from $200 to $1,000 depending on your location and the specific permits you need.

Marketing Costs: Initial marketing costs for things like website development, business cards, and flyers might be around $500 to $1,000.

Other Equipment: Items like sandbags, tarps, extension cords, and a dolly for moving the inflatables can add up to around $500 to $1,000.

Operational Costs: On top of these initial costs, it’s crucial to have enough funds to cover operating expenses for the first three to six months as a buffer. These operating expenses include things like fuel, ongoing marketing costs, phone and internet, maintenance and cleaning supplies, and any loan repayments. These expenses can range between $1,000 to $2,000 per month, so a three to six month buffer would be between $3,000 to $12,000.

How much can a bounce house rental business owner make?

The profit potential for a bounce house rental business can be significant, but it is dependent on a number of factors including the scale of the operation, location, demand, competition, and business efficiency.

Assuming a medium-scale operation, you might have five bounce houses rented out during the weekends. Let’s consider an average rental rate of $200 per day per bounce house, so over a weekend (two days), the potential revenue is 5 houses x $200 x 2 days = $2,000.

Assuming 30 weekends of operation per year, projected annual revenues would be $2,000 x 30 = $60,000.

Then we need to subtract out operating expenses. First of all, there will be costs directly ties to an event such as fuel and event wages. There will also be overhead expenses like maintenance, cleaning supplies, marketing, phone and internet, insurance, and storage costs. In this example, let’s suppose these operational costs are effectively around $2,000 per month.

For the sake of simplification in this example and that some costs will still occur throughout the year, we will estimate that the expenses occur each month.

The total projected expenses would then be $2,000 x 12 = $24,000.

Therefore, your gross profit for the weekend would be revenue minus operating expenses: $60,000 – $24,000 = $36,000.

Now, if you have additional fixed costs, such as loan repayments or office rent, or variable costs like repairs, these will need to be subtracted to get your net profit.

However, remember that these are rough estimates. Your revenue and profit can be higher or lower based on the factors mentioned earlier. Increasing your rental rates, reducing operational costs, optimizing your rental schedule, and effective marketing can significantly improve profitability. As with any business, success in a bounce house rental business requires diligent management, market understanding, and customer focus.

To increase profits further, you may consider renting additional complementary products like snow cone machines, popcorn machines, and dunk tanks to be a one-stop shop for party rentals.

What skills are needed to run a bounce house?

While you won’t need a business degree to start a bounce house business, certain skills and experiences are helpful.

Problem-solving skills: Creative problem-solving skills are an asset in any industry, but they’re particularly helpful when running a bounce house business where a business owner may have to sort out scheduling issues, malfunctioning equipment, and more.

Customer Service Skills: A large portion of running a bounce house business involves providing customer service. Previous customer service experience will be a benefit.

Attention to Detail: A business owner will need to pay attention to details like how houses are folded and packed, how they’re maintained, and how they’re cleaned to keep them in the best shape possible.

Physical Strength: Moving bounce houses is physically demanding work. A business owner will benefit from being strong and physically fit.

Organizational Skills: Experience working with schedules and budgeting time will be an advantage in this industry, especially since most parties will take place on the weekends, leading to potential scheduling conflicts.

What is the NAICS code for a bounce house rental business?

The NAICS code for a bounce house rental business is 532289.

The NAICS code (North American Industry Classification System) is a federal system to classify different types of businesses for the collection and reporting of statistical data.

Related: What is a NAICS code?

Additional Resources
American Rental Association

How To Start A Bounce House Rental Business

How To Start A Bounce House Rental Business

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