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 haunted attraction. 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 startup and ongoing 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.
What are the costs involved in opening a haunted attraction?
This is heavily dependent on the type of experience you offer. Costs may vary depending on the state or neighborhood. To rent out an old jail or asylum, you may end up spending hundreds of thousands of dollars to secure the space. Huge attractions in major cities can total $100,000 just for lighting and sound alone. However, if you have portable attractions that can be set up at carnivals around the nation, you can likely get away with as little as $10,000 for everything. If you own your own farm, you can do haunted hayrides to cover the cost of the costumes and the actors.
What are the ongoing expenses for a haunted attraction?
Because this business is somewhat seasonal, ongoing expenses are low.
- Rent/property costs
- Employee wages
- Prop replacement
- Advertising costs
- Commercial insurance
- Sound/lighting equipment maintenance
Who is the target market?
Your best clients are normally young people (teenagers) with a taste for adrenaline. Older people may have conditions where they can’t engage in heart-racing activities. Those who visit you should be people who understand that no matter how scary things may seem, they are never in any real danger.
How does a haunted attraction make money?
Haunted houses generally charge a flat fee to participate in one or more houses. These costs need to cover and exceed the cost of the space, employee salaries, and props.
How much can you charge customers?
Haunted house tickets are typically anywhere from $15 to $40, but they can go even higher than that. People may spend as much as $100 or more on a custom experience.
How much profit can a haunted attraction make?
The large attractions can make up to $3 million a year, while even the small businesses may make around $50,000. Your profits will be dependent on your resourcefulness when it comes to finding the equipment, costumes, and actors. For example, you may want to find all of your costumes solely at thrift stores for additional savings.
How can you make your business more profitable?
Considering Halloween is such a profitable holiday, you can become a consultant for would-be business owners. Or you can look into other thrilling experiences as well. For example, escape rooms trap participants in a room, and invite the players to solve puzzles and mysteries in a given amount of time to get out of the room. These can be kept open all year round, but are typically only popular in the larger cities.
What will you name your business?
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 haunted attraction is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
You should also consider using a registered agent service to help protect your privacy and stay compliant.
For most small businesses forming an LLC is a great option, but if you still want to weigh all your options check our our article, What Structure Should I Choose for My Business?
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?.
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.
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.
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 haunted thrill park. 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 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.
To avoid liability and potential lawsuits, haunted attractions should have their clients sign waivers.
An example of an appropriate waiver can be found here.
Certificate of Occupancy
A haunted thrill park is generally run out of a large indoor or 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 location:
- 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 haunted attraction.
- 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 location:
- You will be responsible for obtaining a valid CO from a local government authority.
- Review all building codes and zoning requirements for your business’ location to ensure your haunted attraction will be in compliance and able to obtain a CO.
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.
How to promote & market a haunted attraction
Flyers, internet advertising and television ads are the best way to market your website. You can even consider billboards too. Your target demographic already knows they want to attend a haunted house this year, they just need to know exactly what their options are. To distinguish yourself amongst competitors, you’ll need to be aggressive when it comes to your advertising. After all, you won’t have the luxury to establish yourself when you’ll be packing up by the first of November.
Recommended: Get started with local advertising for your business with a $300 credit from Yelp.
How to keep customers coming back
Let your customers know why you’re different. Instead of the same old scenes they’ve seen, tell them about your clever alternatives or show them on television or on your website. To boost your retention for next Halloween, stand apart by offering twist or surprise endings.
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.
Start A Haunted Attraction In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
There is an art to scaring people while keeping them safe, so an entrepreneur will have to coordinate the right scenes while ensuring workers understand how to handle the guests. Those who already have a love of haunted houses likely understand what's currently out there, and what people would like to see in the future.
What happens during a typical day at a haunted attraction?
Owners typically deal with the following activities on a daily basis.
- Finding/booking facilities
- Traveling to different towns
- Hiring workers
- Designing/buying costumes
- Creating scary scenes
- Advertising the business
What are some skills and experiences that will help you build a successful haunted attraction?
This is the right business for someone who is a jack-of-all-trades type. For the most part, it will require owners who are extremely thorough when it comes to making decisions. There are many things that can go wrong when opening a haunted thrill park, so it comes down to how well you’ve planned for the catastrophes. It will also take a certain amount of people skills and a real interest in the science of horror.
Owners should have an idea of what their customers want to see in their particular location. Offering different experiences is the best way to get people interested in what you do. Today, many haunted house owners are concentrating on more interactive experiences rather than just having people walk through a house.
What is the growth potential for a haunted attraction?
A haunted house is a niche market, but there is still room for growth. While haunted houses are more popular during Halloween, they can technically be run all-year round which can generate a lot of growth. If you’re able to come up with creative scenes and employ the right workers, you may find that you can branch out to more towns throughout the U.S. as well.
TRUiC's YouTube Channel
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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.
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 haunted attraction?
Because the costs to get started can be so high and the public interest is highest in October, many people end up losing money on their first year. You should think of a haunted thrill park as a time investment, as it may be a few years before you make your money back on the initial costs.
To ensure you meet your goals sooner rather than later, you need to pay attention to what’s happening with your core market. Television series like Fear Factor, Naked and Afraid, or American Horror Story can inspire new ideas and help your business stay trendy with your demographic. The public doesn't necessarily need extremely expensive effects, but they do need an experience they'll want to tell their friends about.
How and when to build a team
Your actors will be the key to your success, so you’ll need to get them scheduled at least a few weeks in advance. They’ll need to not only be scary, but also flexible enough to add a little of their own personality into the mix. Staying in character is important, but that doesn’t mean the character has to be one-dimensional. Chances are, you’ll get a lot of younger people applying, but that may just mean you'll have a lot of untapped potential in your midst.