Tips on Founding Party Rental Business
How to Start a Party Rental Business? Here it offers tips and advice about getting started in this exciting business. She shares her insight about income potential, marketing, and buying the right equipment such as moonbounces, inflatable slides, and much more.
Start by giving us an overview of the party rental industry.
There are different types of party rental companies, they may be the people that bring the bounces for your backyard parties, or a party rental company may come and do a post-prom or a church event, or they may be there to do your wedding event or special photography, there’s all types of party rental companies, though the most basic is usually the backyard party with the moonbounces and other smaller inflatables.
How much money does it take to get started in the party rental business?
If you want to start with a backyard party, which is probably where most of them start, you can get into it for under $5,000, possibly even a bit less than that. But if you go it around the $4,000 to 5,000 level you kind of have to maximize what you get out of your money, mainly because you want to have a little bit more because there’s a minimum amount you pay for insurance.
What kind of income is realistically possible?
I know companies that make $20,000. I have good friends out on the East Coast that probably make two or three million. The trend I have seen is most companies seem to double their business for about the first five years, every year. And then it depends on which direction they want to go. It will almost get as big as you want it to get, which is a really good thing, and it can be a really bad thing, because sometimes it gets bigger than what you expect it to.
Is it possible to run this business out of your home part-time, or do you really need to be full-time with a storefront?
Generally most people start at home with, you know, you add in a second phone line which I highly recommend because as it gets bigger having someone call your house during dinner kind of you lose a lot of control on your life, but you can start with a phone line, a couple of moon bounces, I recommend you keep them in your garage and that you don’t expand until you absolutely have to. There’s a really, really good profit in this, and if you keep the overhead down, it can just be amazing what you can make out of it. The trend tends to be probably to get the overhead a little faster than what you need to. So if you’re smart and you stay home and work it from home, I don’t advise quitting your other job in the beginning. Most people do eventually, you’ll hit a point where you’ll have to, but you can run it from home with an answering machine. And you just take your messages and call people back and book your parties and that’s it.
Do you need any kind of special training? Is this business hard to learn?
No, but it’s work. There’s no question about that. Most of the moonbounces weigh 135-145 lbs., all the way up. Some of the bigger ones are 700 lbs. It takes a little bit of time to learn how to roll them. I could walk you through rolling a moonbounce. I could walk you through the setup. Most of the equipment comes with training books or some information on what you’re supposed to do. In terms of learning how to use them, and how to use them properly, a good thing is that a good salesperson will walk you through the safe way to handle the unit. In many cases states have specific guidelines on what has to be done. Probably the biggest thing that you’ve got to learn is you always stake, especially inflatables, down. And you make sure you don’t put too many kids in them. You follow some of the guidelines and they are just really practical things that you would do normally. But the important thing is you just know that you’re going to operate your company correctly and that’s how your company grows.
What about party equipment rental franchises? Is this a good choice for someone starting out in this business?
For some people they may work well. Years ago inflatables were really expensive, a moonbounce cost about $3,500, it cost $10,000 to get started. At that point getting into a franchise where they furnished some of your equipment at a lower cost probably made sense for a lot of people. Now moonbounces cost $1,200 to $1,300 and learning how to use the equipment is fairly simple. There’s all kinds of guidelines we talked about earlier on how to do it, so there’s no real reason to go with a franchise and give up the money unless you just absolutely don’t want to try to walk through any part of it on your own. Basically I think the real reason for the franchise was getting in at a lower cost, and there’s just no reason for that anymore.
Cheryl, in most areas of the country is there a lot of competition?
It varies. Out on the West Coast there is so much competition that I don’t really know why a lot of people do the backyard bounces, though there’s a lot of people happy with them. On the West Coast, a moonbounce, it may very well rent for $85 for the day. We’re in the Midwest, most of our rentals run $200, now we’re talking backyard bounces, we’re not talking the bigger events, which is really where the money is. On the East Coast the moonbounce may go for $300 a day. So it’s different in different cities. If you stick with just moon bounces, you’re probably going to have a little more competition. If you take yourself out of the moonbounce-type venue, and decide to start doing corporate events, specialty events, then you won’t run into the competition, and there’s also a lot more money in what you do.
So there isn’t as much money in home party rentals as there is the larger events? Talk about that.
I’ve got friends down south that probably make well over $100,000 doing home parties. But they’ve got maybe 40-50 moonbounces. On the other hand I can go out and I can do ten parties on a Saturday and just drop off a moonbounce or whatever and maybe get $185-250 for each one, or I can do two or three corporate events, and for a corporate event it’ll take moonbounces, it may take interactive games, they may want a dunk tank, or some church events. Those events tend to run between $2,000 and $6,000, $8,000, $10,000, depending on what you’re offering. See, you don’t just have moonbounces to offer, there’s mechanical bulls, there’s robo surfers, there’s giant slides, there’s miniature golf, there’s a whole realm of things that you can get that ultimately will make you more money, though then you need bigger trucks and you need more help. And you can’t operate out of your house, it’s at that point that it quits being quite so simple, but it really becomes profitable.
How much demand is there for these types of jumper rentals?
You know, and I don’t like to advertise this, but here in Indiana I could probably take on ten more competitors and it still wouldn’t affect my business. Even during years that people weren’t going out and doing things, people still tend to entertain in the home, and if they’re depressed about aspects of their life or whatever, they’ll even entertain at home more, they want that good feeling about being home, being with their family. So there’s always a call for it. Company picnics, if they have a hard year, they may cut back on a lot of things, but they’ll generally still try to reward their workers, and so you still have company business. It’s just amazing how strong the demand actually is, and the industry is growing. I just came back from the yearly trade show we have, and I think when I started in this business there were maybe seven inflatable manufacturers, and there were probably fifty of them at the show this year. And they’re all doing good business, so I’d say somebody’s supporting all this.
Are there a lot of scams, and is there a lot of misinformation in the party rental business?
I would have to say that you’re probably going to get more help in the party rental business then you will in just about any other industry. I don’t think you’ll see a lot of scams. The worst scam you will see, and I don’t think they intentionally try to scam you, there is not a huge amount of profit in the making of this equipment, and so they generally build your products right after they get the money, and they generally tell you they’re going to ship in two weeks, and half the time it’s four weeks. So there’s a lot of times your first experience, unless you get someone who has stock or who’s really, really honest about it, your first experience may not be good because you’re worried your equipment won’t get there, and you’ve got your brand new first event and you don’t have any equipment. I don’t know if it is a scam, I think that they just misjudge a lot of the time what’s going to happen. I tell everyone every year, it doesn’t matter how old they are, when you buy equipment, don’t book it until it’s sitting on your door, just in case something goes wrong. I’ve broken that rule myself I don’t know how many times, because if you’ve got something really neat it’s pretty hard not to tell somebody about it and rent it. But other than that I don’t think there’s many scam artists and I think you’ll also find that almost everyone in this industry is willing to share with you the ups and the downs. I’m friends with all my competitors here locally, and if I need equipment they’re the ones I go to to get equipment for an event where I maybe don’t have enough equipment to fit the customer’s needs that day.
What kind of rental equipment is needed? What kind of things do you actually rent out?
My rentals, let me see, just to give you an example. We rent out moonbounces, we rent out water slides, inflatable slip and slides, inflatable twisters, carnival games, fun foods, mechanical bulls, robosurfers, bear stuffing machines, wax hand machines, photonovelty equipment, old fashioned photos. It kind of gives you an example. Anything that’s fun we’ve figured out how to rent for the most part. There’s just so many items. I know companies that rent out small carnival rides. Actually I know companies that rent out big ones, but not usually for corporate picnics, but rock climbing walls, Eurobungees, and then you get into the group of people that rent the wedding supplies. You know, the candelabras, gazebos, things along that line, so there’s a lot of different equipment you can rent. And almost every one of these companies, with the exception of maybe the wedding companies, probably started with a moonbounce.
How much, on average, do different items rent for?
Moonbounces, as I said, could go anywhere from $85 to $350 depending on the part of the country you’re in. A giant slide, $500 to $800. There’s larger obstacle courses that go into that $1,000 to $1,200 range. And these are big obstacle courses. The mechanical bulls are about $1,400 in some parts of the country, $1,800 in other parts of the country. So it’s a pretty wide variety. On average you’re going to pay anywhere from $85 to probably $2,500, depending on the type of equipment you want and what type of event you’re having.
Do you recommend asking for the entire rental fee up from when you book the rental, or just charge a deposit? What’s the best way to handle that?
Most companies aren’t going to want to pay you the whole amount up front. Most companies tend to ask for 50% up front, and then the balance they get when you show up to actually deliver the equipment.
What kind of equipment do you need to set up an inflatable? Kind of walk me through the process.
Let’s go back to the basic bounce again, which is where it all starts. And what you’re going to need is, you’ve got to have either a truck or a van or an SUV with at least a small trailer to get started. You’ll need a dolly to push the equipment. You need stakes, to stake it down. Extension cords, most units used to come with a blower, now a lot of times they sell the bounces without the blowers, you got to have a blower to go with it. And that’s basically it, so you go into your garage or wherever, you put your rolled piece of equipment, and when a moon bounce is rolled up, it kind of looks like a great big burrito, basically. You put it on the dolly, you wheel it out to your trailer, take it to the customer, take it off the trailer, find out where the power is, which should be about 50 feet from where you actually want to set up, you unroll the unit, hook the blower to it, you can be set up within three minutes basically, it’s that fast to do. Then you make sure to stake down properly. You talk to the responsible adult, I guess would be the word, go over how to operate the unit, how to operate it safely, what to do if the wind comes up. In our company we ask them to sign a release stating that they have been taught how to use the equipment, and that they have been given a written set of instructions for their specific piece of equipment. Once that’s done, we leave. In the Midwest, at least here in Indiana, we don’t have to stay. In some states, you can’t take out a unit without leaving an attendant with it. It kind of depends on what the laws are in each state, and anyone who wants to get in this business, the first thing they should do would be to call their state, and it’s a different department in each state, but find out what the guidelines are for your specific area.
What’s the life expectancy of this kind of equipment? How many rentals can you get out of a new inflatable?
Depends on how well you take care of it. The worst thing that can happen to an inflatable is that you roll it up wet. They tend to mildew easy, and once they start smelling like mildew, it’s almost impossible to get that smell out. And it doesn’t hurt to get it wet. You can put them out in the rain or if you get caught in the rain, it’s not any big deal, as long as when it quits raining you bring it home, you blow it up, and let it completely dry out before you roll it up. But if you get them wet a lot and you put them away, the thread will eventually start to rot, and then they start looking pretty worn. I used an example one time, Disneyland I believe used to have inflatables in their Mickeytown or something, and the guy that manufactured them told me one time he was replacing them every six weeks to two months. Well that’s cool, if I could get enough use to replace mine that often I think that would be really, really neat. An average inflatable for most people probably lasts four to five years. Some longer, it depends on how long do they use them, how many times do they use them, how big a kid gets on them, there’s a lot of variables. Most of mine probably last five years, would be my guess.
What about inflatable slides? Are these popular?
They’re very popular, and now they come in so many shapes and sizes that it’s amazing. Probably the most popular right now are the inflatable water slides, and they come as inflatable slip-n-slides, they come as inflatable slides with a pool at the bottom, they come as inflatable slides that you can slide down on like an innertube, and it kind of runs out on the ground, there are 22-foot slides, there are steep slides, there are circular slides. Yes, bounces are popular, obstacle courses are popular, and slides. Those are the three most popular of the inflatable items.
Is renting tents and tables and chairs part of the party rental business?
It is part of the party rental business. It’s also a whole lot of work. I’m guessing two to three times the amount of work as the actual inflatables, although I’ve met tent rental companies that swear up and down that my side of it is harder. You need a lot more help for tents, there’s no question about that, and chairs are great except chairs and tables take up a lot of space, and I think a chair rents for like 75 cents a piece, so you’re doing a lot of manpower for not a whole lot of money. The people I know that started in just basic party rentals and added in tents, tables, and chairs, did it because they were subcontracting the equipment from someone else for so long they decided they might as well put the money in their own pocket.
What about snowcone and popcorn and cotton candy machines? Do you recommend renting these out, too, for additional profit?
I’ve never met a backyard party that didn’t have some type of fun food to go along with it. Usually cotton candy, snocone, popcorn, things along that line. But they’re basic items, they’re a nice up-sell item, because if you do have a party, and you’re only getting $85 it’s really nice if you can get another fifty for a popcorn machine and popcorn, something along that line, so absolutely they’re a good addition. And that’s probably the first expansion item for any company that’s just started with one or two bounces.
What’s your thought about buying used equipment to save money?
These days, it’s probably not worth it, though having said that I’ve sold used equipment and in a few cases I bought used equipment. Four years ago the cost of a bounce was double what it is now, so if someone tries to sell a four year old bounce, the price they’re going to ask is about the same price that you can go buy one new with a full warranty.
I would imagine that party rental liability can be pretty substantial. Is it difficult to get insurance, and is it expensive?
Insurance is the hardest part of the party rental business, and it’s expensive. It’s not quite as expensive as what it was two years ago, but it’s not as cheap as it was four years ago. As the inflatables came down, the cost of the inflatables, the cost of the insurance went sky-high, and one of the reasons was there were a couple of accidents, and they were simple accidents, and they were mainly caused because companies did not stake their units down correctly. That’s the biggest cause of accidents right there. There are only a couple of companies that underwrite the insurance, it’s a real specialty item. The two right off hand that I can think of right now, and I just talked to them at the trade show, and I actually have my own insurance through one of them, one of them is Britton-Gallagher and they’re out of Ohio, and then there’s another company from South Carolina, I believe, called Fun Pro Insurance. Both of those companies are very knowledgeable about the industry as a whole, and seem to have really competitive rates on the insurance.
What are some good ways to market and advertise a party rental business?
I do all of mine on the Internet. Virtually all of it on the Internet. The first thing you have to do is have a website. I don’t care if it’s only a two-bounce company. Unless you put these things in your garage and don’t tell anybody about them you’re going to grow. So if you have a good website it’s probably one of the easiest advertising items you could ever find, because every time you set up a unit, you’re advertising. You don’t even have to rent it, if you find somebody that lives across the street from a school and you set up the unit, people see it, people want to rent it. Kids want to rent it. One of the easiest things to do is get into a school festival. You know, the first few you don’t even charge much for, people see it, people want to rent it, you can hand out your brochures. So, basically the units themselves will do the advertising for you. Now another way to do it locally for the backyard parties is I do a lot of fliers, I do aside from the Internet, I’ve got the website, belonging to the local chambers, things like that. It’s not very expensive actually to do, compared to what you might do with a lot of other companies.
Do you have your company name and phone number logoed or silkscreened onto the moonbounces?
I have it on removable artwork, which I think is the going trend nowadays is you’ve got a removable panel that has your name and your phone number on it. Mainly because a lot of us do subcontract with other customers, we do a lot of jobs for area event planners, and so if they call us and they want us to come out and do a company picnic that they’ve actually booked, then I take our logo off. And that way we’re going and we’re representing them, but absolutely you should have your name on your unit, you should have your name on your vehicle.
What are the biggest mistakes people make when starting a party rental company?
I don’t think the mistakes come quite so much with the starting. The mistakes tend to come a little bit as you’re starting to grow. The start-up actually is fairly easy, you get a couple of bounces, it’s fun, and it’s that very excitement with it being fun that can get you in trouble sometimes because there’s so many neat things out there to buy. You can go to a trade show and spend thousands just going down one aisle, because there’s all these new toys that everybody loves and you know you can make money with them, so there’s not generally a lot of problems in the beginning. I guess there would be one, and that would be at least in certain parts of this country, this tends to be a seasonal business. It runs April through October, and then you get your winters off. So if you don’t set aside any money for the winter and you have loans to pay, that can get you in trouble from the beginning, though most people seem pretty good about that, and I don’t hear of it as a real common problem. But expanding too fast probably is the biggest problem that you find.
What kind of parting advice would you like to give for people looking for information about how to start a party rental business?
Do your homework, there’s lots of information out there on the Internet. Do some research. When you’re researching your area to decide what kind of market you want to get into, make sure you compare everything. Make sure you find out not just how many other moonbounce companies there are, how many other activities are there for kids? Are there a lot of college areas where they have kids theater or different types of things? Look at everything in the area to see what’s available before you decide really where you want to market your product. You might find out that you don’t want to market as much to backyard parties, you may get a couple of moonbounces, but right away you’re going to concentrate on churches. I probably over the years have sold more moonbounces to youth ministers that were unhappy with not having a good quality product for their use than I have just about any other area of business. So there’s a lot of other areas out there that aren’t maybe just the backyard birthday parties. And like I said, churches would be one of the biggest.