Start a balloon distribution business by following these 10 steps:
You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple guide to starting your balloon distribution business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
Check out our How to Start a Business page.
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 balloon distribution business?
The exact cost of opening your business hinges on where you base your operations. For instance, many balloon distributors start from their own homes, which negates the overhead of a business lease or business utilities. In this case, your only real costs will be your opening inventory (which will likely cost $5,000 or less, depending on the amount and type of balloons you are buying), industrial helium tank (which should cost $350 or less), and a vehicle large enough to transport inflated balloons (this cost may vary, but you can obtain a decently-sized SUV for $10,000 or less). If you decide to have a standing location, you must pay a monthly lease (which will vary by city, but will likely be $2000 or more) and utilities (which will be $500 or more depending on the size of your building). Finally, don't forget to consider investing $1,000 to $2,000 into some modest traditional advertisement, though you should also be embracing the free advertising possible with social media.
What are the ongoing expenses for a balloon distribution business?
The ongoing expenses for such a business are minimal. If you are operating from your own home, there is no monthly lease or utility costs. You are basically paying for the balloons themselves (which you will buy as your stock sells, so this amount may vary, but will likely be less than $1,000 per month depending on your volume), gas for delivering the balloons, and the cost for any ongoing traditional advertising you may do (though, as mentioned earlier, social media advertisement is functionally free and very effective, largely negating the need for traditional advertising). You will periodically need to replace your helium, and this will likely cost $100 or less per canister.
Who is the target market?
As mentioned earlier, your best clients are young children. Selling to children allows you to sell more balloons with popular tv and movie characters printed on them, as this will make the child even more enthusiastic about the balloon. You can also charge more for character balloons.
How does a balloon distribution business make money?
The model for your business is quite simple: you charge customers different sums of money for different styles of balloons.
How much can you charge customers?
How much you charge clients varies by whether the balloons are licensed or not, how many you are selling, balloon size, balloon material, and whether you have personally inflated them. For instance, some venues might sell six or seven non-inflated latex balloons with characters printed on them for three dollars, and they may sell larger foil balloons of the same character for three to ten dollars, depending on size. Non-character balloons may cost half of that amount, but other factors (such as special printing) can affect the cost. You may also sell things like helium tanks for fifty dollars, and if you are personally delivering the balloons, you may want to charge a delivery fee based on mileage. You should charge a higher price for things like custom balloon animals: up to ten dollars per creation, or if you are working at an event, about $100 per hour to make as many balloons as you can during this time (typically no more than twenty).
How much profit can a balloon distribution business make?
How much profit you make depends greatly on your area as well as what you specialize in. Some individuals make $25,000 a year or more serving only as balloon decorators for parties, whereas others make $50,000 or more primarily making balloon animals for private events. By doing both of these things and also simply selling balloons, you can greatly increase possible revenue streams and easily turn this into a six figure business.
How can you make your business more profitable?
As your business picks up, don't forget to consider raising your prices; this remains one of the easiest ways to make your products and services more profitable across the board. Also, while birthday parties are typically your bread and butter in terms of events that you help decorate, don't forget to advertise your services to help decorate weddings and high school functions. Finally, depending on your comfort level, you may take on a persona or a theme when it comes to balloon delivery; as silly as it is, it feels even more fun when kids get deliveries from funny, beloved characters, and this can lead to more repeat business!
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 Balloon Distribution Business 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 balloon distribution business 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:
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
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Recommended: Read our Best Banks for Small Business review to find the best national bank, credit union, business-loan friendly banks, one with many brick-and-mortar locations, and more.
Open net-30 accounts
When it comes to establishing your business credit, net-30 vendors are considered the way to go. The term "net-30," which is popular among vendors, refers to a business credit arrangement where the company pays the vendor within 30 days of receiving goods or services.
Net-30 credit terms are often used for businesses that need to obtain inventory quickly but do not have the cash on hand.
Besides establishing business relationships with vendors, net-30 credit accounts get reported 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 guide on the best net-30 vendors so you can start building business credit now, so you never have to worry about cash flow in the future. Keep in mind that poor cash flow is the #1 reason businesses fail!
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
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.
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 balloon distribution business business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
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.
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.
How to promote & market a balloon distribution business
In addition to marketing yourself via birthday parties, you should look for public opportunities to demonstrate what you can do. If you create balloon animals, doing so at a public park or other space where children gather will help build their excitement and interest parents who want to buy from you later on. While you should start with some traditional advertising via newspapers and radio, social media is one of the best ways you can advertise. Setting up dedicated Facebook and Instagram pages can help you reach your community better while using the visual nature of online media to show off how colorful and diverse your balloons are. Don't forget to set up your own web page so that there is a central location where customers can quickly look up things like your address, phone number, and business hours.
How to keep customers coming back
One of the best ways to both attract and retain customers is to change up your offerings by season. Make sure you have spooky Halloween balloons, spirited Christmas balloons, colorful Easter balloons, and so on. This keeps customers coming back for more and ensures that you will be the go-to shop for seasonal decorations as well as birthday parties.
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.
Recommended: Find the best phone system for your business; check out our review of the Best Business Phone Systems 2021.
Start A Balloon Distribution Business In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
Is this Business Right For You?
Because your primary audience is young children, this business is solid for those who are great with children. If you choose a specialty such as creating balloon animals, you must already be highly-skilled at creating balloon animals on demand. Finally, this business is best for someone who really knows their area: many balloon businesses operate from mobile trucks or stands, so knowing the best areas to reach the most people is a major part of your success.
Want to know if you are cut out to be an entrepreneur?
Take our Entrepreneurship Quiz to find out!
What happens during a typical day at a balloon distribution business?
Most of your daily activities come from ordering, displaying, and/or creating balloons and balloon animals for children. A big part of your salesmanship comes from entertaining the children, so there is more interaction with individual customers than in a normal retail job. When you are not ordering, displaying, or selling, you will likely be working on your website and social media presence and looking ahead to future special events that your business can best capitalize on.
What are some skills and experiences that will help you build a successful balloon distribution business?
Any prior experience selling balloons or creating balloon animals is crucial. Similarly, any experience working with children can help you as you get started. Additionally, while while a formal education is not required, any business courses or degrees you have completed can help you establish your business that much more quickly.
What is the growth potential for a balloon distribution business?
The growth potential for this business is modest, with industry growing by about 2.5% from May of 2012 to May of 2016. The exact potential for growth is typically determined by your region and whether there is much competition for your specific services.
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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 balloon distribution business?
Take the time to really market your products. This includes explaining the significance of imported vs. domestic balloons and really highlighting what makes some of your creations and merchandise special. Make sure you have a catchy name and logo to help brand yourself as you get started. Also, integrate some related side businesses into your promotional model, such as offering services to help parents decorate birthday parties for children. This makes you extra money even as it establishes your business as a balloon authority within the community.
How and when to build a team
The decision to build a team with this business usually happens only if you branch out to a standing location. When working from home, the business usually only requires one person, and this eliminates most of the overhead and greatly increases profits. If you open a store, you will need a team, but you must be confident that the additional cost of a monthly lease and employee salaries will be offset by an increase in profits.