Most of us have taken funny photos in a photo booth at some point. It’s fun and captures a memory of an event or just a fun time in your life. Someone is making money every time someone goes into that booth, so why not you? A photo booth business could be a fun and fairly simple way to make some money.
A photobooth rental business places photobooths in malls, events, or gatherings such as weddings, birthday parties, or other social events, where passersby or attendees can take photos in the booth. For events, the person or company holding the event pays a rental fee. The photos are digital and can be printed immediately. It operates like a vending machine.
According to WBOC, the photo booth industry had a market size of $378.2 million as of 2020 and is expected to grow at a CAGR of 11.6% to reach $730.6 million by 2026. The industry was affected by the pandemic due to canceled events and stay-at-home orders but is rebounding as the pandemic winds down.
Photobooth rental for weddings and parties, and other events is growing, driving the growth of the industry. They are also becoming popular at corporate events. The industry is sensitive to economic fluctuations due to the fact that their rental is considered somewhat of a luxury purchase.
Your target market will be people who are holding events and want to add another element of entertainment for guests.
Skills, Experience, and Education Useful in Running a Photobooth Business
There are several specific skills that you will need to open a photobooth business.
- Experience. You need to understand the concept of a photobooth and gain an understanding of its mechanics.
- Business knowledge and experience. You will need to have at least some basic knowledge of marketing, finance/accounting, and human resources.
- People skills. You’ll need to be able to build rapport with your customers so that you retain them as customers and keep them coming back.
Startup Costs to Start a Photobooth Business
The startup costs for a photobooth are quite low, and you may already have much of the equipment. Here are the typical costs you will face when you open a photobooth business.
- Equipment like a photobooth, camera, printer, props, backdrops, etc.- $5,000
- Photo editing software – $100 +
- Vehicle for transporting equipment if running a mobile photobooth business – $5,000+
Steps to Starting a Photobooth Business
Step 1: Write your Business Plan
After coming up with the idea, the next step in starting your photobooth business should be to write a business plan. The business plan will make you focus on some important aspects of the business, such as who your customers are, how you plan to reach them, projecting sales and expenses, your value proposition to use for marketing, and more. You’ll also need to do some research to calculate exactly what your startup expenses will be and what your ongoing expenses will be.
Not only will a bank require you to have a business plan if you need financing, but multiple studies have shown that having a good business plan increases the odds of starting a successful business. Writing the plan helps you think through all the aspects of the business and then serves as a guide as you begin.
Step 2: Name the Business
Finding the perfect photobooth business name can be challenging. Not only does the name have to reflect what you do and be appealing to customers, but it also has to be available to use. You can check your state’s website to see if the name is available and register your name. Your name should make you stand out, reflect your brand, and tell potential customers exactly what you do.
Step 3: Form a Business Entity
A business entity refers to how a business is legally organized to operate. There are four primary business entities to choose from, which include a sole proprietorship, partnership, corporation, and Limited Liability Company (LLC). Each type of entity has its own pros and cons, such as the ability of the entity to protect the owner’s personal assets, costs, and administrative requirements.
Related: Comparison of Business Entities
Step 4: Select your Location
You just need a place to store your booth, and you will transport it to events or rent a permanent location in a mall.
Related: Choosing a business location
Step 5: Apply for Business Licenses and Permits
While there are no licenses specifically for a photobooth business, general business registrations may still apply. Common requirements include a local business license, sales tax permit, and an Employer Identification Number.
Step 6: Find Financing
Coming up with a good business idea and having the skills to run it are one thing, but getting the funding to start a photobooth business is another. In order to get a loan, the borrower(s) will need to have good credit and be able to invest 15-25% of their money towards the total start-up costs.
Step 7: Open a Business Bank Account
Keeping your business and personal finances in separate business bank and credit card accounts makes it easier to track the income and expenses of the business.
Step 8: Get your Marketing Plan in Place
A photobooth business will need to set aside a budget to cover marketing costs on a continuous basis. Common marketing techniques for a photobooth business include social media platforms like Facebook, Instagram, and Pinterest, along with online advertising with Google, as well as brochures and flyers. Developing a website can be a significant expense, but it can also give your photobooth business greater visibility online.
Step 9: Get Insurance
A photobooth business needs several types of insurance for full coverage:
General liability insurance can help protect you from third-party claims of bodily injury and property damage.
Professional liability insurance protects you from claims of professional errors or negligence that result in a financial loss.
Worker’s compensation insurance covers expenses like medical bills and legal fees that a business might face if an employee were ever hurt while working.
Insurance policies will vary. To get the most accurate idea of what to budget for insurance, request quotes from multiple providers. When comparing the quotes, consider not only the premiums but also how the plan exclusions, coverage limitations, and deductibles compare.
Step 10: Hiring Employees
You may need hire employees to help you run your photobooth business, or you may choose to be a one-person show. Make sure that you select people with appropriate experience.
In addition to salary costs, your budget will also need to include other employee-related expenses. Workman’s comp insurance, unemployment insurance, and paid time off are common expenses that a business will need to cover when hiring staff.
Related: Hiring your first employee
Step 11: Set up an Accounting System
Setting up an accounting system for your photobooth business 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.
How Much Can You Potentially Make Owning a Photobooth Business?
Your revenue will depend on how many booths you have. The average rental fee is $450, so if you rent it three times per week, you would make $70,200 annually.
Things to Consider Before Starting a Photobooth Business
Running a Photobooth business, or any business will have its challenges. You need to be prepared and make sure that you know what you’re getting into.
Marketing and acquiring customers will be your biggest challenge and an ongoing expense. It will take some time to build a brand and a customer base to earn a steady income.
It’s common to require customers to pay a deposit upfront to reserve your services. Without a deposit, it’s very common for customers to change their minds at the last minute, leaving your business without an event to generate money from.
You will face competition, so your marketing will need to make you stand out, and your prices will need to be competitive.
Talk to other business owners for tips on starting a business and do your homework to determine costs. Research other Photobooth businesses to see what they offer and what prices they charge.