Starting an Inflatable Rental Business 1 (Contributed)

The Following is a fantastic article contributed to our database by an owner/operator of Blast Zone inflatables.
 
Anthony Rayl
Co-Owner / Operator of Leaps Abound
Phoenix, Arizona

Starting An Inflatable Business

INTRODUCTION

Starting an inflatable rental business is a whole lot more than simply buying some inflatables. 

Look at your market. Are there competitors to your business? If the answer is yes then what differentiates you?

You really aren't selling a new or innovative product or service since all companies more or less rent out similar products by similar manufacturers.

You can't set yourself apart on price too much. Coming in and setting your prices drastically below the competition will cause them to lower their prices and depress the whole market. Also keep in mind that larger established companies can afford to lower their prices way below you in the short term to drive you out of business if you start a price war.

The areas where you can really set yourself apart are marketing and service.

I decided to get into the inflatable rental business after going through the process of finding and hiring a company for my daughter's birthday. I spent weeks searching through websites, reading reviews, contacting companies, and researching. 

I was rather shocked at how bad the design of websites and logos were, how grammatically incorrect and misspelled verbiage was, how often links were broken, how outdated content was, and how hard it was to find the information I was really looking for. I thought, I could do this and do it better.

Once I began contacting companies I was amazed at how often I got personal cell phone voicemails or people just answering "hello". It didn't feel like I was calling a legitimate business, just some guy. Lots of calls and emails weren't returned in a timely manner. Once I finally hired a company the guy just delivered the inflatable out of the back of his pickup wearing street clothes. He was almost an hour late. He was cordial, but certainly not overly friendly, enthusiastic, or helpful. He was supposed to pick the inflatable back up at 8 pm and didn't return till 2 am, letting himself into our back yard and waking us up. I thought, I will do this and do it better.

I ended up spending $325 on a water slide and while the slide itself was fantastic and the kids LOVED it, everything else about the experience left a bad taste in my mouth.

Make sure your marketing is professional. Hire a designer to do your logo, promotional materials, and website. It is an expense most people don't consider but I believe it is vital to setting yourself apart and giving yourself a professional visage. You don't have to go to an agency and spend big bucks. You can find a freelancer on craigslist or hire an online company. These are the things that will make people feel good about your company and drive new business.

Make sure your service is professional. Have a phone specifically for your business and answer it professionally and with your company name. Have logos printed or embroidered on shirts for your deliveries, have vehicle graphics on what you deliver with, be punctual, and be very friendly and helpful. These are the things that will make people feel good about your company and drive repeat and word of mouth business.

MARKETING YOUR INFLATABLE RENTAL BUSINESS

How are you getting people to your site or calling you on the phone? There are lots of things to keep in mind.

Are you connected with any organizations or communities that give you access to lots of parents with kids? Things like churches, schools, daycares, scouts, sports, and clubs offer a great place to start generating customers. Are you active in your neighborhood or community? Think of what family and friends have connections that can help you get the word out. Are there non-competing businesses in the same field that you can build reciprocal relationships with? Cake makers, clowns, magicians, etc all target the same demographic without directly competing and can share clients and partner up.

Aside from grassroots marketing there are lots of professional options. You can rely heavily on search if you have a site designed and optimized well for search. You can do search engine marketing like pay per click. You can place ads in local newspapers or kid / parent magazines. You can do direct mail postcards or door hangers. There are lots of options, but start slowly and on a small scale so you can track results and find out what works. Sometimes coupons through Valpak or Groupon can be a great way to kick start a client list. You may have to offer dramatic discounts but the repeat and referral business it can lead to may be well worth it in the long run.

The best, most effective, and most cost-efficient way to drive people to your business may be social media. Find a way to encourage your customers to talk about your company on facebook and twitter and provide testimonials. Build contests and campaigns. Offer deals. A friend or family member's recommendation is vastly more effective than a random anonymous stranger. Each happy customer can be worth hundreds of future customers.

WHAT YOU NEED TO START YOUR INFLATABLE RENTAL BUSINESS

All you need is bouncers right? Not even close. Not if you want to do it the right way. When I hired a company I wanted someone who had a water slide, a snow cone machine, and tables and chairs that I could rent. A company that didn't have a snow cone machine for rent would have lost my business all together. So look at what your competition does.

When we started we found we needed the following: 

Bare Minimum: inflatables, concession machines (cotton candy, snow cone, popcorn), concession supplies, tables and chairs, extension cords, hoses, generators, commercial cleaner, plus a vehicle that can tow and a trailer of some sort 

Because of where we live (Phoenix, AZ) we also got: Tents, misting systems, and misting fans 

For our marketing we needed: Business cards, postcards, yard signs, vehicle graphics, shirts and hats, magnets, rack cards, and door hangers, 

After I set one up I found out I needed: Lifting belt and knee pads

How are you going to manage your business? We needed: Scheduling program, book keeping program, a cell phone, and a credit card reader 

Plus, depending on where you live you may need: Insurance, and business licenses

PRICING FOR INFLATABLE RENTALS

Pricing is totally dependent on what the competition is doing in your area. You want to make sure that your prices are competitive as this is the differentiating factor people will see first but you don't want to depreciate the value of what you do.

Another good baseline might be charging 1/12th of the cost of your equipment for a rental. So a $1,200 bouncer would rent for $100, a $2,800 slide would rent for $230, and a $500 popcorn machine would rent for $40 (plus the cost of supplies).

In addition leave yourself room to be able to offer sales, discounts, and package deals. People would rather spend $150 on a bouncer that normally costs $175 than spend $140 on a bouncer at regular price.

IS AN INFLATABLE BUSINESS RIGHT FOR YOU?

The first time I set up and took down an inflatable I was VERY discouraged. It was hard work. Much harder than I had anticipated. However after doing it several times it got easier and I got much better at it. It is still hard work, but it is easier. So stick with it and get the hang of it. Places say putting up and taking down an inflatable is a one person job, and it is if you are a pretty strong one person. I'm 30 years old, 6 feet, 200 pounds, and fairly athletic and while I can handle it myself, I struggle. My girlfriend could never handle one alone.

$150 to rent out a bouncy house sounds like great money right? Well it can be. But lets say you only have one rental in a day and it is 45 minutes away. That is 45 minutes to drive there, an hour to set up, take payment, and review rental agreement, 45 minutes to drive home, 45 minutes to drive back, an hour to take down and clean equipment, 45 minutes to drive home. Now lets say you have a half hour of additional work for that rental between email and phone correspondence, scheduling, prep, and bookkeeping. You have put 5 and a half hours of work in for $150. Take away the cost of gas, depreciation to your product, and taxes and you probably make less than $20 an hour.

Don't be scared because hopefully you don't have many days like that. Ideally you want to have 5 or 6 rentals in a day so you can maximize your gas costs and driving time. Then you'll see that hourly rate shoot up. Just know getting in that there is a lot of time and work and this is most definitely not a get rich quick business.

This is a way to be independent, make good money, and hopefully do something you enjoy and something that makes people happy. What's better than making a kid smile on their birthday?

Now let's look at a good day. Let's say you have six rentals on a Saturday. $900, now we're talking. If you set your route well let's say you can set up and get to the next set up in an hour and fifteen minutes. Then you can take down and get to the next take down in an hour and fifteen minutes. Add back in that half hour of additional work per rental and now you are looking at 18 hours of work for $900. Now you are up to around $40 an hour after taxes and expenses.

ADDITIONAL ADVICE

Always have a backup blower, try to always have a back up bouncer, and be ready, waiting, and available while you have rentals out in case your customers need anything. Nothing will make you feel worse than ruining a child's birthday because one of your blower motors go out.

Do your research. There are TONS of instructional videos, tutorials, articles, and blogs out there. They cover everything from the best way to deflate a bouncer to how to clean your popcorn machine. Trial and error is fine, but learning from someone else's trials and errors is infinitely better.

Get an LLC and do it yourself. Do not pay a lawyer. It is cheap and easy and there are lots of resources out there to learn how to do it.

Before you start a business put together a business plan. It is good to have a road map and a way for you to get your ideas down in a cohesive manner. It also allows you to share your business with other people particularly if you are looking for partners, investors, or a loan. There are lots of resources online to guide you through the process.

See what resources are available to you. Places like local chamber of commerces, small business associations, and economic development centers are full of people happy to help you out. The advice is often times free. I highly recommend seeing if a SCORE office is near you. They are a volunteer organization of retired business people that offer business counseling free of charge. They are associated with the Small Business Administration and can also help you with an SBA small business loan if you need it.