Start an inflatable bounce house business by following these 9 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 step guide to starting your inflatable bounce house business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
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 initial costs?
- Who is your target market?
- How long it will take you to break even?
- What will you name your business?
Luckily we have done a lot of this research for you. Skip on ahead to the Business Overview for more detailed answers to all your questions.
Choosing the right name is very important. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC prevents you from being personally liable if your inflatable bounce house business is sued. Consider using a registered agent service to help protect your privacy and stay compliant.
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
STEP 4: Open a business bank account
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.
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.
STEP 7: Get Business Insurance
Insurance is highly recommended for all business owners. If you hire employees, workers compensation insurance may be a legal requirement in your state.
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.
STEP 9: Establish your Web Presence
A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.
Select your state below for an in-depth guide on completing each of these steps in your home state.
Rarely do we attend an event, whether it be a birthday party or a fundraiser, where an inflatable bounce house isn’t present. In fact, it’s become so popular that children are hosting birthday parties centering around bounce houses and adults are including bounce houses in their adults-only parties, as well.
Bounce house businesses are generally set up in two different ways. Some people choose to rent bounce houses to customers for a party. Other bounce house businesses are set up to operate out of storefronts, where they fill the space with different inflatables and charge an entrance fee for children.
Who is this business right for?
The entrepreneur who is committed to building his/her business and is ready to dedicate their weekends to business activities are best suited for this career path. The average weight of a 15 x 15 inflatable is equivalent to 4-5 bags of mortar, so it is essential that you have the individual strength or manpower to deliver the equipment on a regular basis.
If your dream is to have a storefront filled with inflatables, many of the above requirements remain the same. While you won’t be required to move inflatables from one location to another, much of your business will be on weekends and during the summer. Entrepreneurs with families should consider getting the entire family involved to ensure ample family time.
What happens during a typical day at an inflatable bounce house business?
It’s a common misconception that your only role as an inflatable bounce house rental company is delivering bounce houses at the agreed upon time. There’s considerably more that goes into this business.
Your weekends will be filled with delivering and picking up bounce houses. During the week, your days will be filled with the following activities:
- Clean, sanitize, and maintain your inflatables.
- If it was a particularly wet weekend, you’ll need to dry out the inflatables to prevent mildew, mold, and odors.
- Repair damaged inflatables and ship ones out that you’re unable to repair yourself.
- Answering phone calls, scheduling reservations, and fielding questions.
- Invoicing and related paperwork.
- Marketing, networking, and administrative duties.
If your vision includes a storefront, you’ll also need to do the following:
- Work with vendors to ensure food and drinks arrive on time and your shelves are fully stocked.
- Oversee staff and ensure they’re properly trained.
- Schedule safety courses for staff.
What is the target market?
While many adults are now hosting parties that include bounce houses, a majority of your business will cater to children who are having birthday parties, graduations, family reunions, other big life events. Churches, businesses, and fundraising events are also a great audience to target in your marketing efforts.
How does an inflatable bounce house business make money?
Inflatable bounce house rental companies generate revenue from each event they deliver a bounce house to. Storefronts charge an entry fee for each child and often host birthday parties for younger children for a group rate.
What is the growth potential for an inflatable bounce house business?
This industry has experienced significant growth over the last decade, with inflatables present at almost every event catering to children. While gaining popularity everywhere, areas with harsh weather offer the most growth potential for storefronts with inflatables. For those interested in significant long-term growth, franchising with well-known organizations such as Monkey Joe’s might offer the greatest potential.
What are some skills and experiences that will help you build a successful inflatable bounce house business?
Due to the significant growth potential, there are a number of individuals seeking business opportunities in this industry. Therefore, strong networking and marketing skills would prove beneficial. It’s important that you understand the demographic you’re catering to and invest in the type of inflatables that best meets their needs. Additionally, strong interpersonal skills, a love of children, and a dedication to the business are also critical to your company’s long-term success.
What are the costs involved in opening an inflatable bounce house business?
Opening an inflatable bounce house rental company requires very little overhead. Each bounce house averages approximately $1,500 in cost and $200 for shipping. Consider investing in at least one combo unit, which will cost you approximately $2,800. You’ll also need to budget for a reliable vehicle, large enough to deliver multiple bounce houses at a time, as well as a trailer, for busier delivery days.
For a storefront location, your costs will be significantly higher. You’ll need a large, open building and an architect to help properly plan the space. The building should be equipped with multiple different types of bounce houses, as well as small rooms for hosting birthday parties. Total investment for franchising opportunities indicate a budget of $166,000 to upwards of $250,000 to open an indoor bounce house establishment.
Once you’ve acquired your space, you can begin stocking your inventory:
- Multiple bounce houses of various sizes - $1,500 to $2,800 each
- Food and drink - tables, chairs, soda machines, kitchen equipment
- Party rooms - equipped with tables, chairs, and decorations
Regardless of which path you take, you’ll need the following items:
- Insurance policy - Speak with a trusted insurance professional, regarding the type of liability coverage your business requires.
- Marketing materials
Where can I 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.
What are some insider tips for jump starting an inflatable bounce house business?
Successful bounce house business owners offer the following advice:
- Draw up a contract for each customer, ensuring they understand you assume no liability for injury.
- Follow up with each client to ensure they had a positive experience with your company.
- Start out with two to four inflatable houses for your rental company.
- Consider investing in used inflatables to reduce start-up expenses.
- Think carefully before investing in bounce houses that include cartoon characters or other current trends. How long will these characters really be popular? The last thing you want is to be stuck with an unused or unpopular item after only one season.
- To save on initial costs, store inflatables in your garage or rent a small storage space.
- For storefronts, include other activities in addition to bounce houses, like arcade games, table hockey, etc.
- Require a deposit before when your client reserves an inflatable or birthday party room.
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Growing Your Business
How to promote & market an inflatable bounce house business
Social media is a great way to reach a large number of people. Your marketing goal is to appeal to both children and their parents. This means getting a little creative with the business’ advertising. Consider taking out an ad in school yearbooks throughout the community. Donating your facility or an inflatable for a daycare, school, or church event is a great way to advertise your business while giving back to the community.
Recommended: Get started with local advertising for your business with a $300 credit from Yelp.
How to keep customers coming back
Customer retention comes down to competitive pricing and the quality of goods and services you provide. Consider a referral and repeat customer program, in which individuals or groups receive a reduced rate on rental fees or parties, after a certain number of visits or referrals.
How and when to build a team
In this industry, your staff will have a significant impact on your business. For a storefront, you’ll need a fairly large team to ensure everything is safe and secure at all times. Since your guests will all be children, try to build a team of reliable teenagers. Your guests will relate to them better and are more apt to listen to their instructions.
For an inflatable rental business, your staff should include reliable and strong individuals. Each inflatable is heavy and awkward to set up. Customers often need advice regarding where it should be set up, accounting for Mother Nature and ensuring there’s enough space for everyone to safely bounce.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a bounce house business. 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.
In addition, certain local licensing or regulatory requirements may apply. For more 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
Maintain Personal Asset Protection
Don’t think that just forming an LLC, or any other type of business, will save your personal assets in case of a lawsuit or other matter by itself.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your LLC is sued. In business law, this is referred to as piercing your corporate veil.
Two of the simplest steps that will protect your business, and yourself, are to:
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.
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.
Release of Liability
To avoid liability and potential lawsuits, bounce house businesses should have their clients sign a release of liability form. An example of such a waiver can be found here.
Recommended: Rocket Lawyer makes it easy to create a professional release of liability form for your bounce house business when you sign up for their premium membership. For $39.95 per month, members receive access to hundreds of legal agreements and on call attorneys to get complimentary legal advice.
Certificate of Occupancy
A bounce house business can be run out of a large storefront or large outdoor space. 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 space:
- 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 bounce house business.
- 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 build a space:
- 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 bounce house business will be in compliance and able to obtain a CO.
How much can you charge customers?
Prices vary by region and upon goods and services delivered. Regular inflatables average $125 for a four hour rental, toddler houses average $80 to $250, depending upon your needs, and combo bouncers average $250.
Admission to inflatable storefront locations is $7 to $10 per child, while private parties start at $250 for twenty children. Before setting your prices, research the average prices of similar businesses in the area.
What are the ongoing expenses for an inflatable bounce house business?
Again, these costs will vary depending upon how you decide to set up your business. Experienced storefront business owners recommend budgeting for the following items:
- Cleaning supplies
- Labor/payroll costs
- Energy costs
- General Liability insurance
- Business insurance
- Repair and replacement of damaged equipment
As a rental business, you’ll incur the above expenses as well as the following:
- Maintenance and repair of your vehicle
Regardless of which way you decide to structure your business, insurance and payroll costs will represent the largest portion of your budget.
How much profit can an inflatable bounce house business make?
Industry research indicates an average of 1.5 rentals per week, which comes out to $188 per week per bounce house. If you invest in 4 bounce houses, your business will draw in about $750 per week.
How can you make your business more profitable?
Consider some of the below strategies for maximizing your inflatable bounce house profits:
- Offer additional party services, such as slides, interactive games, dunk tanks, carnival attractions, face painting, tents, tables, chairs, sounds equipment, and concessions.
- Indoor establishments could include arcades, laser tag, food, and drinks.
- Indoor establishments can run special events, such as day camps, during summer, Spring break, and Christmas break.