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How to Start a Bounce House Rental Business

Overview

How to Start a Bounce House Rental Business

As a child, bounce houses were the highlight of birthday parties, and that tradition continues today. Now, bouncy houses have evolved into more elaborate inflatables that include slides, obstacle courses, and more. Starting an inflatable bounce house business can be a lucrative career move. With most rentals being scheduled on weekends, it’s possible to start a smaller business while continuing to work part-time, making this industry more financially accessible than some other business options.

Business Overview

Bounce house businesses rent out inflatable houses and other items, including games and obstacle courses. These businesses supply these products to consumers who are hosting a birthday party, wedding, or other special event and who want a fun entertainment feature.

Most rentals are for a full-day, though some businesses may offer half-day or multi-day rentals. A bounce house business is responsible for delivering and assembling the house, then disassembling and removing the house at the end of the rental period.

Starting your own bounce house business can be a great choice if you’re looking to continue working part-time while also starting your own business. Because most rentals occur on weekends, it’s possible to start off part-time in this industry while continuing to work at another job. That schedule can have its downsides, though, and you’ll need to be prepared for the fact that you will be working most weekends and holidays. Business can also be largely seasonal in climates with cold winters.

Choosing the right types of inflatable rentals to purchase can be integral to your success. Fun Times Party Rental recommends that you invest in gender-neutral houses when you start your business, which are more versatile. Themed bounce houses only appeal to a specific audience, and when you’re just getting started, you’ll need a base inventory that can work for all sorts of different parties and occasions. As you get to know your audience, you can add new products every year to increase your appeal and expand your business’ versatility.

Industry Summary

According to IBIS World, the party supply rental industry experienced a 3.1% growth from 2015 to 2020. That growth was driven by an increase in disposable income. As of 2020, the party supply rental industry was a $6 billion market with a total of 12,839 businesses employing 56,542 staff.

IBIS World predicts that demand for supply rentals will continue, and increased confidence in the economy, and higher income levels will also support the rental industry. As a result, the rental industry should continue to grow from 2020 to 2025.

 

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Industry Trends

Several trends are affecting the bounce house industry, and business owners need to be able to adapt to these trends to stay competitive. Goodshuffle Pro reports that inflatable games have become more popular, with inflatable basketball, bowling, and jousting games being top picks for birthday parties and more. Inflatable obstacle courses have also emerged, and some incorporate water slides for ideal summertime entertainment.

Bounce houses may traditionally be for birthday parties and festivals, but couples are increasingly seeking them out for wedding receptions, too. All-white bounce houses are ideal for this setting, and while the upkeep is more demanding, businesses can charge higher rental fees for these specialty houses.

Target Market

A bounce house rental business may have multiple target markets. The business may market toward parents who are looking for entertainment for a kid’s birthday party, or the business might also market to couples who are getting married and who want a fun, unique reception.  The business may also focus on corporate events or fundraisers.

Event planners are another important target market, and they can be a source of valuable referrals.

What skills are needed to run a bounce house?

While you won’t need a business degree to start a bounce house business, certain skills and experiences are helpful.

Problem solving skills. Creative problem solving skills are an asset in any industry, but they’re particularly helpful when running a bounce house business where a business owner may have to sort out scheduling issues, malfunctioning equipment, and more.

Customer service skills. A large portion of running a bounce house business involves providing customer service. Previous customer service experience will be a benefit.

Attention to detail. A business owner will need to pay attention to details like how houses are folded and packed, how they’re maintained, and how they’re cleaned to keep them in the best shape possible.

Physical strength. Moving bounce houses is physically demanding work. A business owner will benefit from being strong and physically fit.

Organizational skills. Experience working with schedules and budgeting time will be an advantage in this industry, especially since most parties will take place on the weekends, leading to potential scheduling conflicts.

Checklist for Starting a Bounce House Rental Business

If you’re thinking about starting a bounce house rental business, it’s important to do your research first. Here is a checklist to help you get started.

Step 1: Write a Business Plan

Before you start your business, you’ll need to write a detailed business plan. This plan will help to keep you organized and will guide you through the process of getting your business up and running. Writing the plan can also help you to identify potential obstacles and to solve those challenges early on. Your business plan will include details about your target market, the services you’ll offer, and how you’ll make a profit. If you need to apply for financing from a bank or investor, you’ll need to be prepared with this business plan. Multiple sources have also found that taking the time to develop a business plan increases the chance of a business being successful.

Related: How to write a business plan

Step 2: Form a Business Entity

A business entity (also referred to as a business structure) refers to how a business is legally organized to operate. There are four primary business structures to choose from, which include the sole proprietorship, partnership, corporation, and Limited Liability Company (LLC). Each type of entity has its own pros and cons, such as liability exposure, costs, and administrative requirements.

When deciding on which business entity is best for a bounce house rental business, it normally comes down to the sole proprietorship and Limited Liability Company.

A partnership opens the owners up to unnecessary personal liability because if a partner does something to get the business sued, or runs off with cash from the business, the other partners are personally liable to repay.
 
The corporation can be a good choice to minimize liability risk because it separates the business assets from the owner’s assets. If the corporation is sued or certain business debts can’t be paid back, the owners aren’t personally responsible to repay them. The downside to the corporation is that it is more complicated than all the other entities and requires more administration than the LLC. If you plan on raising a lot of investment though, the corporation is usually the better choice.

That leaves the sole proprietorship and LLC.

The sole proprietorship is the least expensive and easiest entity to start which is appealing. The downside is the owner is personally liable should anything happen to the business, which is an important consideration. The LLC offers the ability to operate as a sole proprietorship with the liability protection of a corporation. Depending on the state, the cost to form an LLC runs from $40 – $500, which is pretty inexpensive for protecting the owners from business-related lawsuits and certain debts.

Related: Guide to forming your LLC
 

Forming an LLC sounds complicated and expensive, but using an entity formation service guides you through the process so you know it was done right.


Some popular LLC formation services include:


IncFile - $0 plus state fees & free registered agent for 1 year!

IncAuthority - $0 plus state fees & free registered agent the first year!

ZenBusiness - $49 plus state fees & free registered agent for 1 year!

Step 3: Name the Business

Finding the perfect business name can be challenging. Not only does the name have to resonate with your customers, but it also has to be available to use.

Step 4: Select Your Location

It’s possible to run a small bounce house business out of your home, as long as you have a shed or garage for storage. If your business expands, you may need to rent a storage facility. Factors like available amenities and the size of the space will affect rent costs. It’s best to rent a space that’s located centrally within your service area to help cut down on transportation time and costs.

Step 5: Register for Business Licenses and Permits

A few general business registrations that may be needed for a bounce house rental business include a business license, sales tax permit, Employer Identification Number, and Occupancy Permit, among others.

Related: Common business licenses, permits, and registrations by state

Step 6: Find Financing

If you don’t have enough money available in savings to start up your business, you may need to apply for financing to help with those initial costs. If you’re applying for a business loan, you will need to have good credit. You should also plan to invest your own money in 15-25% of the start-up costs.

Related: Finding the money to start a business

Step 7: Open a Business Bank Account

Keeping your small business and personal finances in separate bank accounts is important to track the income and expenses of your business and identify trends.
 
Many banks offer free business checking accounts, so be sure to find a cost-effective option for your business.

Step 8: Get Your Marketing Plan in Place

Marketing is essential to help you initially build up your customer base and continuously bring in new customers. A thorough marketing plan can help you plan and implement your marketing strategy to maximize your results and stay within your budget. Potential marketing techniques include social media marketing, online advertising, direct mail, advertising in local newspapers, and more. Offering a customer loyalty or referral program can also help to grow your business.

In addition to traditional marketing, consider making networking a part of your work to build your business. Networking with event planners and the owners of event venues in your area can pay off in referral business.

Related: Low-cost ideas to market a new business

Every business is going to need a logo. Make a professional logo in no time with the free Canvaa logo maker!

Step 9: Get Business Insurance

There are several types of insurance to consider when starting a bounce house rental business. A few of these include:
– General liability insurance helps to protect your business against expenses like medical bills and legal fees you might face if a customer or guest is ever hurt while using your bounce house.
– Worker’s compensation insurance can help to cover expenses like medical bills that your business might face if an employee were ever hurt on the job.
– Commercial auto insurance helps cover expenses that could result if a business-owned vehicle were ever in a car accident.

Many factors, including the value of your equipment and the number of employees on staff, will affect the cost of an insurance policy. It’s best to request quotes from multiple insurance providers to get the most accurate idea of what to budget for insurance. When evaluating the quotes, consider how the premiums, coverage exclusions, coverage limits, and other factors compare.

Related: Common types of insurance a business may need

Step 10: Hire Employees

While you may be able to operate your business entirely by yourself in the early days, you may need to hire employees to help you keep up with the demand as the business grows. While specific pay rates for bounce house delivery drivers aren’t available, PayScale reports that delivery drivers earn an average of $15.03 per hour, though that can range from $8.83 to $22.77 per hour.

An inflatable rental business’s budget will need to include staff salaries and other related expenses like paid time off and worker’s comp insurance.

Related: Hiring your first employee

Step 11: Set up an Accounting System

Setting up an accounting system is critical to the long-term success of your business.

Staying on top of taxes not only keeps the business out of trouble with the government, but the numbers can be used to track and monitor trends and cash flow in the business and maximize profits.

Related: Setting up the accounting for your business

The thought of accounting can be intimidating for a lot of new entrepreneurs. There are a number of ways of handling bookkeeping, from DIY to hiring a bookkeeper. These include:

- Pen and paper - Low expense, but difficult to track.
- Spreadsheet - Low expense, but easy to make errors.
- Accounting software - Medium expense, but owner typically inputs expenses. Some great accounting software programs include Freshbooks or Wave Accounting.
- Hire a bookkeeper - Higher expense, though very affordable at $100-$200 per month in most cases. A dedicated bookkeeper will probably save money because, in addition to handling all of the bookkeeping (so you can focus on the business), they also provide personalized tax advice and ensure the business is in compliance.

Find bookkeepers in your local area or use a service like 800Accountant.

How much does it cost to start a bounce house rental business?

It’s possible to start a bounce house business with a relatively small investment, depending on the resources already available to you. One of the largest expenses will be a business vehicle, like a van, that’s large enough to transport the equipment. If you already have access to a van and a garage where you can store your bounce houses, then it’s possible to start your business for as little as $10,000.

Some common startup costs for a bounce house business include:
– Bounce houses and any other inflatable equipment
– Extension cords, sand bags, and duct tape
– Cleaning supplies
– Van or truck and trailer
– Uniforms
– Signage

How much can a bounce house rental business owner make?

Many factors, including your location, the number of bounce houses you have, and your profit margins, will affect your business’ profits. According to Sunjoy, each bounce house can be rented out an average of 1.5 times per week. Assuming your business has four houses and you charge $150 per rental, you would bring in about $900 per week.

Keep in mind that average house rental prices vary significantly depending on your location, so your income will be dependent on the market costs in your area. Tent and Table studied 40 rental companies across the United States, analyzing the prices for an 8-hour full-day rental. The study revealed that national bounce house rentals for 6 to 8 hours cost $238.44, with the low average rate being $97.57 and the high average rate being $409.35. In Brooklyn, New York, rentals were most expensive, averaging $541.66, while in San Diego, California, rentals averaged only $99. This study is a great example of why market research into your competitors is so important and how your location can affect your business profits.

To increase profits further, you may consider renting additional complementary products like snow cone machines, popcorn machines, and dunk tanks to be a one-stop-shop for party rentals.

Are there grants to start a bounce house rental business?

It’s extremely rare to find a grant to start a bounce house rental business. If you search for business grants, you will come across a lot of scams and misinformation. Occasionally an organization will offer grants to start a business, however, be skeptical and don’t provide any sensitive personal information or pay money to get more information.

Legitimate federal grants can be found at Grants.gov, and you can check on your state’s economic development office to see if they have any grants available.

What is the NAICS code for a bounce house rental business?

The NAICS code for a bounce house rental business is 532289.

The NAICS code (North American Industry Classification System) is a federal system to classify different types of businesses for the collection and reporting of statistical data.

Related: What is a NAICS code?

Additional Resources
American Rental Association

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