How to Start an Inflatable Bounce House Business

Bounce houses are popular for birthday parties, fundraisers, school events, local fairs and other community gatherings. The industry took a hit during the pandemic, but now it’s bouncing back in a big way. You could start an inflatable bounce house rental business from home for a relatively small investment and take advantage of a market coming back strong. Bounce houses rent for $30 to $50 per hour, so if you purchase a few you could make good money.

To be an entrepreneur, though, you need to understand the business startup process. Fortunately, this step-by-step guide has everything you need to blow up your business know-how and put you on the road to major success.

Step 1: Decide if the Business Is Right for You

Pros and cons

Starting an inflatable bounce house business has pros and cons to consider before deciding if it’s right for you.

Inflatable bounce house industry trends

Industry size and growth

• Industry size and growth – The US party supply rental industry is worth $5.5 billion in 2022, which reflects a projected increase of 16% during the year.((https://www.ibisworld.com/industry-statistics/market-size/party-supply-rental-united-states/))
• Number of businesses – In 2022, 9,835 party supply rental businesses were operating in the US.((https://www.ibisworld.com/industry-statistics/number-of-businesses/party-supply-rental-united-states/)) 
• Number of people employed –  In 2022, the US party supply rental industry employed 45,159 people.((https://www.ibisworld.com/united-states/market-research-reports/party-supply-rental-industry/))

Trends and challenges

Trends in the inflatable bounce house industry include:

• Inflatable obstacle courses are increasingly popular and often found at indoor party centers.
• Inflatable interactive games are another new trend, with games like inflatable basketball and inflatable boxing.

Challenges in the inflatable bounce house industry include:

• Bounce house injuries are extremely common, creating the need for strict safety protocols and monitoring.
• Inflatable bounce houses are regulated by each state, so it’s important to keep up with regulations and stay in compliance.

How much does it cost to start an inflatable bounce house business?

Startup costs for an inflatable bounce house business range from $9,000 to $16,000. The main expense is the houses. You can buy packages of 4 to 6 bounce houses that come with dollies and an air blower for $7,500 to $12,500.

You’ll need a handful of items to successfully launch your inflatable bounce house business, including: 

• Dollies
• Air blower

How much can you earn from an inflatable bounce house business?

Inflatable bounce house rentals cost about $40 per hour. Your profit margin should be about 90%.

In your first year or two, if you have 4 bounce houses and supply them to two 3-hour parties per week, you can bring in about $50,000 in annual revenue. This would mean $45,000 in profit, assuming that 90% margin. As you begin to get repeat business and referrals and you add more bounce houses, sales could climb to 12 bounce houses rented for 6 hours per week. At this stage, you’d hire staff, reducing your profit margin to around 60%. With annual revenue of $150,000, you’d make a tidy profit of $90,000.

What barriers to entry are there?

There are a few barriers to entry for an inflatable bounce house business. Your biggest challenge will be the cost of the bounce houses.

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Step 2: Hone Your Idea

Now that you know what’s involved in starting an inflatable bounce house business, it’s a good idea to hone your concept in preparation to enter a competitive market.

Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.

Why? Identify an opportunity

Research bounce house businesses in your area and online to examine their services, price points, and customer reviews. You’re looking for a market gap to fill. For instance, maybe the local market is missing a business that has additional games like dunk tanks or obstacle courses.

You might consider targeting a niche market by specializing in a certain aspect of your industry, such as inflatable water slides and interactive games.

This could jumpstart your word-of-mouth marketing and attract clients right away.

What? Determine your products or services

In addition to bounce house rentals, you could have:

• Water slides
• Combo bouncers
• Photo booths
• Inflatable obstacle courses
• Carnival games
• Dunk tanks
• Tent rentals

How much should you charge for inflatable bounce houses?

Rental prices for bounce houses range from $30 to $50 per hour. Your ongoing costs will be for fuel and labor, when you need it. You should aim for a profit margin of about 60% after you’re large enough to have staff.

Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.

Who? Identify your target market

Your target market will be parents for the most part. You can find them on Instagram, Facebook, or even LinkedIn. Schools and local fairs and festivals could also be good target markets.

Where? Choose your business premises

It’s likely that you’ll always be able to run your business from home, but if you need to rent a facility, you can find commercial space to rent in your area on sites such as Craigslist, Crexi, and Instant Offices.

When choosing a commercial space, you may want to follow these rules of thumb:

• Central location accessible via public transport
• Ventilated and spacious, with good natural light
• Flexible lease that can be extended as your business grows
• Ready-to-use space with no major renovations or repairs needed

Step 3: Brainstorm a Business Name

Your business name is your business identity, so choose one that encapsulates your objectives, services, and mission in just a few words. You probably want a name that’s short and easy to remember, since much of your business, and your initial business in particular, will come from word-of-mouth referrals.

Here are some ideas for brainstorming your business name:

• Short, unique, and catchy names tend to stand out
• Names that are easy to say and spell tend to do better 
• Name should be relevant to your product or service offerings
• Ask around — family, friends, colleagues, social media — for suggestions
• Including keywords, such as “bounce houses” or “party games”, boosts SEO
• Name should allow for expansion, for ex: “Jump ‘N’ Bounce” over “Birthday Bounce House Rentals” or “Corporate Bounce House Rentals”
• Avoid location-based names that might hinder future expansion
• Use online tools like the Step by Step Business Name Generator. Just type in a few keywords and hit “generate” and you’ll have dozens of suggestions at your fingertips.

Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these.

Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that sets your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.

Step 4: Create a Business Plan

Every business needs a plan. This will function as a guidebook to take your startup through the launch process and maintain focus on your key goals. A business plan also enables potential partners and investors to better understand your company and its vision:

• Executive Summary: Summarize your inflatable bounce house business’s objective to provide entertaining and safe inflatable structures for events like children’s parties, community events, and festivals.
• Business Overview: Describe your business’s focus on renting out inflatable bounce houses, including various sizes, themes, and additional play structures.
• Product and Services: Detail the range of inflatable products available for rent, such as bounce houses, obstacle courses, slides, and combo units, along with setup and takedown services.
• Market Analysis: Assess the demand for inflatable entertainment, considering target markets like parents for children’s parties, schools for events, or community organizations.
• Competitive Analysis: Compare your rental offerings and services to other party rental businesses, focusing on your strengths like product variety, safety standards, or customer service.
• Sales and Marketing: Outline your strategy for attracting customers, including online advertising, partnerships with event planners, or offering package deals.
• Management Team: Highlight the experience and skills of your team, particularly in areas like event planning, safety management, and customer service.
• Operations Plan: Describe the process of inventory management, delivery, setup, supervision, and takedown of inflatable structures.
• Financial Plan: Provide an overview of financial aspects, covering startup costs, pricing strategies, and projected income.
• Appendix: Include supplementary documents such as equipment lists, safety certifications, or client testimonials to support your business plan.

If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.

Step 5: Register Your Business

Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business!

Choose where to register your company

Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you’re planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to inflatable bounce house businesses.

If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state.

Choose your business structure

Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your inflatable bounce house business will shape your taxes, personal liability, and business registration requirements, so choose wisely.

Here are the main options:

• Sole Proprietorship – The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
• General Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
• Limited Liability Company (LLC) – Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts.
• C Corp – Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation.
• S Corp – An S-Corporation refers to the tax classification of the business but is not a business entity. An S-Corp can be either a corporation or an LLC, which just need to elect to be an S-Corp for tax status. In an S-Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.

We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have. 

Form Your LLC

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Step 6: Register for Taxes

The final step before you’re able to pay taxes is getting an Employer Identification Number, or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN.

Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.

The IRS website also offers a tax-payers checklist, and taxes can be filed online.

It is important to consult an accountant or other professional to help you with your taxes to ensure you’re completing them correctly.

Step 7: Fund your Business

Securing financing is your next step and there are plenty of ways to raise capital:

• Bank loans: This is the most common method but getting approved requires a rock-solid business plan and strong credit history.
• SBA-guaranteed loans: The Small Business Administration can act as guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan.
• Government grants: A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
• Friends and Family: Reach out to friends and family to provide a business loan or investment in your concept. It’s a good idea to have legal advice when doing so because SEC regulations apply.
• Crowdfunding: Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund your vision. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business.
• Personal: Self-fund your business via your savings or the sale of property or other assets.

Bank and SBA loans are probably the best option, other than friends and family, for funding an inflatable bounce house business. You might also try crowdfunding if you have an innovative concept.

Step 8: Apply for Licenses/Permits

Starting an inflatable bounce house business requires obtaining a number of licenses and permits from local, state, and federal governments.

Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits.

You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more.

You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package. They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.

If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.

Step 9: Open a Business Bank Account

Before you start making money, you’ll need a place to keep it, and that requires opening a bank account.

Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your inflatable bounce house business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.

Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account.

Step 10: Get Business Insurance

Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.

Here are some types of insurance to consider:

• General liability: The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
• Business Property: Provides coverage for your equipment and supplies.
• Equipment Breakdown Insurance: Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
• Worker’s compensation: Provides compensation to employees injured on the job.
• Property: Covers your physical space, whether it is a cart, storefront, or office.
• Commercial auto: Protection for your company-owned vehicle.
• Professional liability: Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
• Business owner’s policy (BOP): This is an insurance plan that acts as an all-in-one insurance policy, a combination of the above insurance types.

Step 11: Prepare to Launch

As opening day nears, prepare for launch by reviewing and improving some key elements of your business. 

Essential software and tools

Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks.

You may want to use industry-specific software, such as Quipli, Good Shuffle, or Booqable, to manage your scheduling, orders, tasks, billing, and payments.

Accounting

• Popular web-based accounting programs for smaller businesses include Quickbooks, Freshbooks, and Xero. 
• If you’re unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences for filing incorrect tax documents can be harsh, so accuracy is crucial. 

Develop your website

Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism.

You can create your own website using services like WordPress, Wix, or Squarespace. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.

They are unlikely to find your website, however, unless you follow Search Engine Optimization (SEO) practices. These are steps that help pages rank higher in the results of top search engines like Google.

Marketing

Here are some powerful marketing strategies for your future business:

1. Local Partnerships: Collaborate with local businesses like event planners, party supply stores, or community centers to cross-promote your inflatable bounce house services, increasing your reach within the community.
2. Social Media Engagement: Leverage the power of social media platforms by creating engaging content, running contests, and sharing user-generated content to generate buzz and increase brand visibility.
3. Targeted Online Advertising: Utilize online advertising on platforms like Facebook and Instagram to specifically target parents, event organizers, and party planners in your local area, maximizing your marketing budget.
4. Seasonal Promotions: Offer special promotions during peak seasons, holidays, and school breaks to encourage bookings during high-demand periods, creating a sense of urgency among potential customers.
5. Customer Referral Program: Implement a referral program that rewards existing customers for referring friends and family, fostering customer loyalty and expanding your customer base through word-of-mouth marketing.
6. Community Events Sponsorship: Sponsor or participate in local community events, fairs, or school functions to showcase your inflatable bounce houses and establish a physical presence, enhancing brand recognition.
7. Mobile Marketing: Invest in mobile marketing strategies such as SMS marketing or geotargeted ads to reach potential customers directly on their smartphones and promote special offers or discounts.
8. Themed Packages: Create themed bounce house packages for specific occasions (birthdays, holidays) to cater to different customer needs, providing a unique and personalized experience that sets your business apart.
9. Customer Reviews and Testimonials: Encourage satisfied customers to leave reviews on online platforms and your social media pages, building credibility and trust among potential clients researching your services.
10. Interactive Website Content: Enhance your website with interactive elements, such as virtual tours of your bounce houses or video testimonials, to engage visitors and provide a more immersive experience.

Focus on USPs

Unique selling propositions, or USPs, are the characteristics of a product or service that sets it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your inflatable bounce house business meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire.

Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your inflatable bounce house business could be:

• Get your princess’s birthday party off the ground with bouncy castles
• Inflatable obstacle courses to make your next event a hoot
• Inflatable basketball for your champ’s birthday party

Networking

You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running an inflatable bounce house business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in party games for years and can offer invaluable insight and industry connections.

The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in bounce houses. You’ll probably generate new customers or find companies with which you could establish a partnership.

Step 12: Build Your Team

If you’re starting out small from a home office, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for an inflatable bounce house business include:

• Setup Helpers – inflate and set up bounce houses, take houses down
• General Manager – scheduling, staff management, accounting
• Marketing Lead – SEO strategies, social media

At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need.

Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent.

Step 13: Start Making Money!

What child doesn’t love bouncy houses? Even some adults like to jump in and feel like a kid again. From water slides to obstacle courses, there’s all sorts of inflatable fun available. Starting your own inflatable bounce house business is a way to share the fun and make good money. You’ve got the business part down so now it’s time to round up those bounce houses and jump into business!