Bounce houses have become synonymous with fun. You see them at birthday parties, school events, carnivals, and more. If you’re like many, you may have even considered renting a bounce house for your child’s birthday party.
Considering their popularity and the general infatuation kids of all ages have with bounce houses, commonly known as moonwalks, it’s not surprising to see that many people are considering launching their own bounce house rental startup.
After all, all you need to do is buy a few bounce houses, place a few ads, and you’ll be in the money, right? Well, not exactly. As with anything else, building a successful bounce house rental company will take a bit of effort, but those who have found success in the space have found the work to be worth the reward.
The Basics of the Bounce House Rental Company
A bounce house rental company is a pretty simple concept. The company purchases bounce houses that are then rented to consumers, making it affordable to have a bounce house at birthday parties and other one-time events.
After renting your bounce houses out enough times, the investment will have paid for itself, and you find your way to profits. Of course, the bounce house business does have some obligations to the customer. These obligations include:
- Delivery and Pickup. Moonwalks are heavy pieces of party equipment, often weighing hundreds of pounds. As a result, it’s uncommon for the renters to pick up and return the bounce houses they rent. It is up to the rental company to figure out how to get the bounce house to the event address and back into storage upon the completion of the event. Some bounce house rental companies will charge a delivery and pickup fee, while others include this in the cost of the rental.
- Cleaning. Nobody wants to rent a dirty bounce house. Not only can sticks and leaves cause harm to the bouncy castles and inflatable slides, they can be a hazard to people using the bounce house. Moreover, as the rental company owner, it is your obligation to make sure that there are no viral pathogens that can be contracted by customers, especially considering the recent COVID-19 pandemic. As such, the vast majority of bounce house companies spray their inflatable rentals with sanitizing solutions upon both drop-off and pickup.
- Education. If not used properly, inflatable bounce houses can be pretty dangerous, leading to serious injury or even death. It is the party-rental business’ responsibility to provide their customers with a detailed explanation of how to properly use their rentals in order to avoid injury.
Think Legal Before Spending Your First Dime
The bounce house business sounds great and you’re ready to dive in head first. Well, you may want to step back a bit and make sure there’s water in the pool. Having your own business is the American dream, and a party-rental business is fun. What could be better and how could it go wrong?
Think of this scenario:
Your party-rental business is going well. You drop off an inflatable water slide for a weekend birthday party on Friday. On Saturday, you get a call saying that 9-year-old Timmy broke his arm on your equipment, and not only do you need to pay for the medical bills, but the parents also want $50,000 in damages for his pain and suffering. If you’re only doing one or two rentals a weekend, such a lawsuit could put you out of business.
Thinking ahead will help you avoid the devastation that can come from these types of liabilities. There are two potential ways to avoid these types of issues:
Before moving forward with your first rental, you should strongly consider working with a contract attorney to develop a liability waiver for your bounce house rental company. Liability waivers transfer the liability associated with use of the bounce house to the renter.
By signing a liability waiver, the renters take responsibility if little Timmy is hurt on the bounce house, so the party that provided the bounce house won’t be responsible for his medical bills or any pain and suffering associated with the injury. Most contract attorneys charge between $500 and $1,500 to develop these types of liability waivers.
Liability Insurance Policy
Along with a liability waiver, you may want to consider opening a liability insurance policy. Liability insurance policies work just like any other insurance policy. The owner of the party-rental business pays an annual or monthly premium for insurance. If any person or property is harmed as a result of the use of the covered moonwalk, the insurance company picks up the bill, taking the liability off the shoulders of the bounce house rental company owner.
Liability insurance policies are relatively inexpensive in the grand scheme of things, with rates ranging from $2,000 and $3,000 per year for small startup party-rental companies. The most reputable company in the industry is known as Cassio Insurance Agency.
Check Your State Requirements
Liability waivers aren’t worth the paper they’re written on in some states. In other states, the law holds the parties in liability waivers to the agreement they signed. Having insurance is ultimately an option. Although there are no legal requirements surrounding liability insurance, it is an absolute must if your state does not recognize liability waivers.
Keep in mind, as a business owner, if your business doesn’t have the assets to cover its liability, you may be found personally liable for damages. So, a refusal to do your research on this topic could ultimately cost you house and home.
Equipment You Will Need to Start Your Business
As with many businesses, in order to get your party-rental business off the ground, you will need to invest in equipment. Bounce house rental companies will need the following equipment to get started:
Bounce Houses and Other Inflatables
You can’t rent inflatable bounce houses to anyone if you don’t own them. Most startup moonwalk rental companies start with between three and five commercial grade inflatables. Here’s what you need to know when picking them out.
Where to Buy Commercial Grade Inflatables
Finding a quality source for commercial grade bounce houses is relatively simple. Amazon.com is a great place to start. Some other quality sources of commercial grade moonwalks include JumpOrange.com, JungleJumps.com, and BlastZoneCommercial.com.
What Kinds of Inflatables Will You Need?
It’s possible to start your bounce house rental business with a single moonwalk-style bounce house. However, if you want to be competitive, you will want to offer a range of inflatables for all party needs. The most commonly available rental inflatables include:
- Inflatable Bouncy Castles. Inflatable bouncy castles are your classic moonwalk style bounce house. They generally range in size from 8 feet by 8 feet to 15 feet by 15 feet. Keep in mind that larger inflatable bouncy castles will return higher rental income rates. You’ll be able to find a quality standard bounce castle for around $1,250.
- Wet/Dry Combos. Wet/Dry combos are a twist on the traditional moonwalk-style bounce house. These generally have a bounce house with a water slide connected to the side of it. Although rentals with water features will not be popular in the winter time, they yield a premium in summer months. Wet/Dry combos generally cost about $2,500.
- Inflatable Water Slides. Inflatable water slides are tall inflatables that generally feature a single, wide water slide or two slides for racing purposes. Like wet/dry combo inflatables, these will not be popular in winter months but will be hard to hold onto in the summer. You should be able to find a quality inflatable water slide for around $3,500.
- Inflatable Obstacle Courses. Inflatable obstacle courses are a relatively new trend in the party-rentals industry. They are overwhelmingly popular for all times of the year. Moreover, because they provide far more activities than the traditional moonwalk bounce house, they yield higher rental rates. These are the most expensive inflatables with quality inflatable obstacle courses costing around $4,250, or more.
What to Look for in Quality Commercial Grade Inflatables
Investing in a commercial grade inflatable will cost quite a bit of money. In fact, quality moonwalks will range in price from just over $1,000 to $8,000 or more. When you make that kind of investment, it’s important to make sure that your investing dollars are being spent on quality merchandise.
When shopping for a bounce house, here are a few tips to help you ensure that your investment is one that will yield returns for years rather than months:
- Material. The type of material used to make the bounce house is one of the most important factors. Most bounce houses are made of either PVC vinyl or heavy-duty nylon. When purchasing a bounce house, look for those made out of PVC vinyl. Not only is this material far lighter and easier to work with, it’s also far stronger than traditional nylon construction.
- Visibility. Safety is a major concern in the bounce house rental space. So, it’s important to invest in bounce houses that promote safe use. Look for bounce houses that have large mesh areas and provide as few blind spots as possible. When renting your bounce houses, promoting this feature will help your prospective customers choose you over your competition.
- American Engineering. Some bounce houses are engineered and designed in the United States, and some are designed and engineered in other countries. Moonwalks that are engineered in the United States are generally centered around safety rather than cost-cutting in the build.
Truck or SUV
Bounce houses, inflatable water slides, and obstacle courses are large and extremely heavy. As a result, your customers probably aren’t going to come to your place of business to pick up and return their rental — pickup and delivery will be on you.
However, the average bounce house isn’t going to fit in the average car’s trunk. Moreover, you’ll need to bring a blower, dolly, and the other miscellaneous equipment detailed below when you deliver the bounce house. As a result, you’re going to need a large SUV or a truck to support the delivery and pickup of your rentals.
You can pick up a used truck for around $5,000. Even if you have your own truck or SUV, you’ll want to have a separate vehicle for your business for both insurance purposes as well as wear and tear.
Consider Adding Graphics to Your Vehicle
Having your truck or SUV vinyl wrapped with your logo and fun bounce house graphics can help you market your business and spread awareness of your bounce house rental company. This will serve two purposes:
- Low-Cost Advertising. Advertising is overwhelmingly important but can get expensive. A vehicle wrap is a relatively low-cost way to promote your business. Every time someone drives by your bounce house truck, you’ll introduce a new potential customer to your brand.
- Verification. Consumers are on alert around their kids, and may be suspicious of a stranger pulling up to a birthday party in an unmarked van. However, if you show up to drop off a bounce house in a marked business vehicle, it will provide a better user experience for the customer.
Some of the smaller pieces of equipment you’ll need to run your bounce house rental company include:
- Blower. Inflatable bounce houses need a blower to inflate them and keep them inflated. Most bounce houses will come with a compatible blower if they are purchased new from the manufacturer. If it does not, you will need to invest in a blower that is compatible with the bounce house you’ve purchased. Commercial inflatable blowers cost about $275.
- Dolly. Because bounce houses often weigh hundreds of pounds, a dolly will come in handy when it comes time to transport your party equipment. When you buy your dolly, make sure it’s a good one. Small dollies will have a hard time carrying the weight of a commercial grade bounce house. Nonetheless, a high quality dolly will only set you back about $125.
- Extension Cords. Power cords on bounce house blowers are relatively short. In most cases, you will need to provide a high-quality extension cord to power the blower. Keep in mind, these blowers use quite a bit of electricity, so it’s best to purchase a thick, 10-gauge extension cord with each bounce house. Moreover, your extension cord should be at least 50 feet long. You can get your hands on four of these for about $160.
- Ratchet Straps. It’s best to ratchet strap your bounce house to your dolly when moving it to ensure that it does not fall off, potentially causing property damage or causing bodily injury. Ratchet straps will cost about $30.
- Chemical Sprayer. Cleaning your rental party equipment is your responsibility. It’s important to disinfect your equipment before and after each rental. A simple chemical sprayer, like those often used to spray crops, is a great way to quickly coat your moonwalk in a disinfectant solution. This will be your lowest cost supply, at just $25, but will save you plenty of headache.
- Leaf Blower. A leaf blower will help remove leaves, sticks, and other debris that may harm your bounce house or those using it. Sweeping this debris may cause scratches, so a leaf blower is a must. Moreover, you never want to pack your bounce house up wet. Doing so will lead to mold and mildew, and could lead to issues with material integrity in the long run. So, it’s best to use your leaf blower to dry your equipment off before packing it up after each rental. You can find a quality leaf blower at any home improvement store for about $200.
Total Equipment Investment
Using all of the costs mentioned above, you will need to invest a total of approximately $17,315 into your startup.
Important Note: This total does not include the cost of liability insurance and a vehicle wrap. Considering the average cost of liability insurance is $2,500 per year, and the average cost of a vehicle wrap is about $3,000, if you decide to move forward with these options, your total investment will come to around $22,315.
Bounce House Rental Business Profitability
Profitability in any business only happens once all expenses are paid. However, once the startup investment is paid off, your bounce house rental business has the potential to be quite profitable. The average rental prices for inflatables are as follows:
- Traditional Moonwalk Inflatable Bouncy Castle (average size of 13 feet by 13 feet): $250 per weekend.
- Wet/Dry Combo: $350 per weekend.
- Inflatable Water Slide: $450 per weekend.
- Inflatable Obstacle Course: $500 per weekend.
On average, you will pay about $75 in labor, fuel, and mileage expenses to drop off and pick up your rentals within 20 miles. Sanitizing solution costs will be about $6 per rental. So you’ll have to factor out these expenses to determine your net rental income.
If you were to rent out 100% of your inventory every weekend, you would generate net revenue of around $1,226 per weekend. At this rate, it would take a total of 14 weeks, or three and a half months, to reach cash flow positivity without liability insurance or vehicle wrap expenses. With these expenses, you would need 19 weeks, or just over four and a half months, to reach cash flow positivity.
However, these numbers are based on renting 100% of your inventory every weekend. In the beginning, this is highly unlikely. To reach this level, you will need to invest some time — and potentially money — into marketing, which is outlined below. Moreover, in the winter, you will be hard pressed to rent any party equipment with water features.
For example purposes, let’s say that you rent 25% of your inventory every weekend. At this rate, it would take 57 weeks — just over a year — to reach cash flow positivity without liability insurance and vehicle wrap expenses, or 80 weeks to reach cash flow positivity with liability insurance (two annual premiums at $2,500 per year) and vehicle wrap expenses.
Once you reach cash flow positivity, the hope will be that your business has grown to rent 100% of your inventory during summer months and 50% during winter months. As such, your net earnings will be between approximately $613 and $1,226 per weekend. At this point, it’s best to reinvest some of this profitability into new bounce houses for larger earning opportunities.
Marketing Your Bounce House Business
You could have the best bounce houses at the lowest rates in your area, but without marketing, it will still be difficult to rent them out. Ultimately, it’s like having a Ferrari with no gas in the tank; you’re not going anywhere. The good news is that you don’t have to spend a fortune on marketing. In fact, most people start with free marketing options and consider paid marketing opportunities only once they reach profitability.
To get the word out about your bounce house rental offerings, consider the following options:
Google My Business
Google My Business gives business owners a way to let their local community know their business exists. Simply click the “Manage Now” button on the homepage. From there, fill out the form letting Google know about your business and verify your business ownership, and when consumers search for bounce house rentals in your area, your company will be in the results.
Social media sites have become hubs for marketing local businesses. After all, they’re a way to connect with your community without knocking on every door in the city. Start by building social profiles for your business and inviting your friends to like those profiles.
Take the time to be active within the social community, responding to questions and publishing posts on your bounce house rental company’s social media profiles once in a while.
Reward Word of Mouth
Every time a customer rents a bounce house from you, offer them a small reward to refer their friends. For example, start a program that gives a 10% discount on the next rental for every friend referred, or offer a $10 Starbucks gift card for every friend referred. You’d be surprised at how a small amount of monetary compensation can generate word of mouth buzz.
Finally, visit your local post office and ask about marketing mailers. It’s relatively inexpensive to send postcards to potential customers. Moreover, the post office knows its customers. Therefore, you can choose to only send your mailers to homes where children live and where the parents generate specific levels of income. This helps you dial down your audience not only to those who would want to rent a bounce house, but also those with the financial means to do so.
Rental Services May Come With Special Taxes
In most states, rental services are taxed just like the purchase of general products. As a result, on top of the traditional income tax that you’re used to paying, you may be required to charge sales tax on every rental.
The amount of taxes to be charged and when the business must pay those taxes will vary from state to state. If you skip your research and fail to charge and pay the necessary taxes, you may find yourself with a hefty bill from the government down the road.
The United States Internal Revenue Service (IRS) is the largest and most powerful collections agency in the world. They are the only agency that has the power to send you to jail. They have the power to seize your assets, evict you from your home, and take your property. It’s best to stay on their good side.
All business owners should hire an accountant or use one of the various accounting programs to make sure their taxes are being paid correctly. Some of the best programs available include QuickBooks and FreshBooks.
The bounce house rental industry is a profitable one. Once initial investments are paid off, the profit margins are like none other. However, like any other business, being successful will take a bit of work.
Moreover, liability is a major factor to consider when thinking about starting a party equipment rental company. Before moving forward with your startup, make sure to dive into local regulations surrounding potential insurance requirements and the enforceability of liability waivers. Moreover, look into tax codes and make sure that you have a process in place to ensure that your taxes are paid.
If you make the right moves in the industry, a small bounce house rental company making $1,000 or so per weekend has the potential to quickly grow to generate a comfortable six-figure income, making it a great choice for a side hustle that could become something more. If you’re looking for a fun business to get into with a relatively minimal initial investment requirement, the bounce house business might be right for you.