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Bounce house business plan for starting your own business
If you are thinking to have a business that is orientated towards children, a bounce house business is something that you must consider. An indoor bounce house business plan is lucrative for areas with lots of children and fewer playgrounds, and one of the easiest ways for parents to get their children active while being indoors.
Wondering how to start a bounce house business? Setting up a venture from scratch can be daunting and confusing. Here is a rental business plan for a company called “Go Inflatables.” Go Inflatables provides indoor bounce houses services on rent, and its business plan can provide you guidance on how to set up yours. It is the perfect guide if you are trying to set up a space that has to do anything with children, such as business for a babysitting business. Another example of such a business is to start a baby clothes business.
Executive Summary
2.1 The Business
Go Inflatables is a start-up that provides indoor bounce house facilities, owned by Danial Humphrey. The business aims to provide services ranging from renting out spaces to setting up a bounce house, offering daycare facilities, and helping with starting a summer camp business. Go inflatables will be offering its services in Houston, Texas.
2.2 Management of bounce house
To establish a successful bounce house business startup, it is essential that all aspects of your business are looked after. It is important that you have a comprehensive bounce house rental business plan, as it would require you to consider financial, technical (including the safety precautions for kids), and available human capital aspects of the start-up.
As professional business plan writers, here we are providing all the relevant details of Go Inflatables to assist you in devising a plan for your startup.
2.3 Customers of bounce house
Provided that opening a bounce house business will cater to customers of various types, our main customer groups will include:
- Families with Children
- Young Adults
- Educational Facilities
- Working Parents
Go inflatables has a daycare business plan, which emphasizes the fact that the potential customers of bounce houses are children aged between 5-13 years. Having said that, while proposing a business plan indoor playground, it becomes more of a necessity to arrange for precautionary measures for children who play on the indoor bounce house.
2.4 Business Target
While setting up a inflatable bounce house business plan, we must define our business targets. The objective is to promote a healthy lifestyle amongst the younger generation while having fun at the bounce house. Safety is our utmost priority so that every child can have fun without compromising on their health.
Company Summary
3.1 Company Owner
Danial Humphrey will be the owner of Go Inflatables. He graduated from the University of Houston in 2017, with an MBA degree. Later, Danial worked with numerous childcare facilities, through which he realized that there is a need for an indoor bounce house facility. As a result of his experiences, he learned how to run a bounce house business and started Go Inflatables in 2020.
3.2 Why the bounce house is being started
While taking up managerial roles in different start-ups, Danial realized that the existing childcare services failed to utilize indoor spaces properly. Therefore, he came up with the concept of indoor bounce houses where children could engage in multiple activities which help them remain active.
3.3 How the bounce house will be started
Step1: Plan Everything
The key to a successful business is to efficiently plan everything beforehand, with proper contingency plans. If you are looking forward to having a Bounce House Business, here we provide a comprehensive childcare center business plan that was used by Danial Humphrey. It would help you understand how to start a bounce house business. Danial decided to offer both, renal bounce house facilities and childcare facilities while the parents are away for work.
Step2: Define the Brand
Once you answer the question how to open a bounce house business? the next thing you need to do is to define your brand. Provided that it is not easy to start a bounce house, it is crucial that you define your brands’ values and position it in the market accordingly. It will help you gain a competitive edge over other bounce house rental companies in the market. For instance, Go Inflatables values were set around a child-centered approach, and their unique selling point was that it also provided childcare facilities while renting out bounce houses. Similarly, you could devise your policies accordingly and attract customers.
Step3: Establish Your Corporate Office
To start the business, Daniel decided to rent out a space in a well-known commercial center of the city.
Step4: Establish a Web Presence
To order to make your indoor bounce house business plan a success, your business must have an online presence. Go Inflatables will make its own website for which it will put up Ads on Instagram and Facebook.
Step5: Promote and Market
Once you are all set to take your services to the market, your focus should shift towards devising effective marketing strategies so that the product reaches your targeted customer. When Danial Humphery thought of starting a bounce house rental company, he focused on having introductory pricing for the services, which were lower than his competitors to attract customers, and had designated a decent amount of budget towards advertising so that there’s an increase its market share.
| Start-up Expenses | |
| Legal | $201,100 |
| Consultants | $0 |
| Insurance | $23,000 |
| Rent | $35,000 |
| Research and Development | $10,000 |
| Expensed Equipment | $56,000 |
| Signs | $3,400 |
| TOTAL START-UP EXPENSES | $328,500 |
| Start-up Assets | $266,000 |
| Cash Required | $209,000 |
| Start-up Inventory | $39,000 |
| Other Current Assets | $240,000 |
| Long-term Assets | $287,000 |
| TOTAL ASSETS | $1,041,000 |
| Total Requirements | $1,369,500 |
| START-UP FUNDING | |
| Start-up Expenses to Fund | $328,500 |
| Start-up Assets to Fund | $1,041,000 |
| TOTAL FUNDING REQUIRED | $1,369,500 |
| Assets | |
| Non-cash Assets from Start-up | $1,346,000 |
| Cash Requirements from Start-up | $162,000 |
| Additional Cash Raised | $50,000 |
| Cash Balance on Starting Date | $35,000 |
| TOTAL ASSETS | $1,593,000 |
| Liabilities and Capital | |
| Liabilities | $18,000 |
| Current Borrowing | $0 |
| Long-term Liabilities | $0 |
| Accounts Payable (Outstanding Bills) | $58,000 |
| Other Current Liabilities (interest-free) | $0 |
| TOTAL LIABILITIES | $76,000 |
| Capital | |
| Planned Investment | $1,369,500 |
| Investor 1 | $0 |
| Investor 2 | $0 |
| Other | $0 |
| Additional Investment Requirement | $0 |
| TOTAL PLANNED INVESTMENT | $1,369,500 |
| Loss at Start-up (Start-up Expenses) | $147,500 |
| TOTAL CAPITAL | $1,517,000 |
| TOTAL CAPITAL AND LIABILITIES | $1,593,000 |
| Total Funding | $1,369,500 |
Services of bounce house
Before setting up your business, you need to be clear about the services your bounce house start-up would provide. All of the services that you offer will be reflected in your indoor bounce house business plan. We realise that starting a bounce house rental business can be confusing. Hence, you can use the Go Inflatables business plan template for reference it offers multiple services, such as:
- Bounce House Rentals
Go inflatables will provide renting services of two types: 24-hour rental services and 12-hour rental services for all of its customers.
- Childcare services
In addition to basic bounce house services, Go Inflatables will also provide Day-Care services at Commercial Bounce Houses and Bounce Houses with slides, etc for activities.
- Event Management
The customers of Go Inflatables can book bounce houses and its other services for events such as Birthdays, Themed Parties, and Christmas.
Once you figure out how to start your own bounce house business, you will realize how diverse the inflatable bounce house business is. Danial Humphrey’s Go inflatable business plan acts as an ideal guide for your bouncy castle business plan.
Marketing Analysis of bounce house
Market Analysis is the first and the most important step in the development of a marketing plan. Effective market analysis provides an overview of the competitors operating in the market, which would help you identify the unique selling point (USP) of your product. For instance, you can get an insight into how other bounce house companies are operating, and what else can you offer to attract customers.
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If you are unsure about how to conduct a market analysis, you can refer to this indoor bounce house business plan, where we have conducted a market analysis for the market trends and target customers of Go Inflatables.
5.1 Market Trends
According to ProfitableVentures, bounce house businesses make an average of $231,000 and above annually in the United States. The Family Entertainment and Recreation Facility industry has indeed benefited from recent marketing campaigns which are targeted towards encouraging people to participate in recreation activities and sports, as well as consumer trends toward healthy living.
5.2 Marketing Segmentation
The most prominent customer groups of Go Inflatables will include:
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5.2.1 Families with Children
Our primary customers will be the families living around our shop. They are expected to avail our services most regularly for general purpose as well for events like birthday parties and hangouts etc.
5.2.2 Teens
Our second target customers will be teens between the ages of 15-20. They are expected to utilize our services mainly for parties and other such events.
5.2.3 Educational Facilities
This will be our third group of main customer base. Since schools hold events such as parties and game competitions, they are expected to regularly obtain our services.
5.2.4 Working Parents
As Go Inflatables provides child-care services, therefore, working parents are expected to make use of our services quite often as well to make sure that their children are well taken care of.
While a lot of adults are now hosting parties that include bounce houses, a majority of our bounce house business will cater to children who are having birthday parties, graduations, family reunions, or other big life events. Churches, fundraising, and business events are also a great audience to target in your marketing efforts for businesses like moonhouse business plan or bouncy house business.
| Market Analysis | |||||||
| Potential Customers | Growth | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | CAGR |
| Families | 32% | 34,500 | 41,400 | 49,680 | 59,616 | 71,539 | 10.00% |
| Teens | 22% | 22,500 | 27,000 | 32,400 | 38,880 | 46,656 | 10.00% |
| Educational Facilities | 25% | 21,700 | 26,040 | 31,248 | 37,498 | 44,997 | 10.00% |
| Working Parents | 21% | 19,000 | 22,800 | 27,360 | 32,832 | 39,398 | 11.00% |
| Total | 100% | 97,700 | 117,240 | 140,688 | 168,826 | 202,591 | 10% |
5.3 Business Target
The business targets of Go Inflatables are as follows:
- To acquire at least 20% market share by the end of the second year
- To expand our offerings to the outskirts of the city
- To achieve and maintain a CSAT score above 95%
5.4 Product Pricing
To devise the pricing strategy for your indoor inflatable business plan, you may refer to the product pricing of Go Inflatables.
Our pricing system will be based on what is achievable in the industry. We don’t intend to charge higher (except for premium and customized services) and we don’t intend to charge less than what our competitors are charging in Houston.
Marketing Strategy of bounce house
To remain competitive in the bounce house rental business, it is important to have a well-defined market strategy, so that your brand’s positioning is done correctly and hence, a strong client base is established.
While Go Inflatables was evaluating how to build a bounce house, it was integral that they devise a realistic marketing and sales strategy. Here we have provided Go Inflatables indoor rental business plan which you can use as a reference for setting up a bounce house.
6.1 Competitive Analysis
Our unique selling proposition is that:
- We are well-positioned
- People can easily access our facility
- Our prices are affordable
- We have a different package for families, schools, and religious organizations.
6.2 Sales Strategy
Part of the marketing and sales strategies that we will adopt are:
- Open our bounce house and recreation facility with a big party for children
- Advertise our bounce house and recreation facility on national TV, local TV stations, and local radio station
- Promote our bounce house and recreation facility online via our official website and all available social media platforms
6.3 Sales Monthly
6.4 Sales Yearly
6.5 Sales Forecast
Personnel plan of bounce house
When Dan Humphery was figuring out how to start a bounce house company, he realized that it is a business that is very labor intensive. As per this bounce house business plan template, you can evaluate the human resource needs for your business.
7.1 Company Staff
- Facility Manager
- 1 Technician to set up generators
- 5 Bouncy Castles Safety Instructors / Assistants
- 1 Accounts Officer
- 3 Cleaners
- 1 Web Manager
- 1 Bus Driver
7.2 Average Salary of Employees
| Personnel Plan | |||
| Year 1 | Year 2 | Year 3 | |
| Facility Manager | $60,000 | $66,000 | $72,600 |
| Technician | $42,000 | $46,200 | $50,820 |
| Safety Instructors | $182,000 | $200,200 | $220,220 |
| Accounts Officer | $30,000 | $33,000 | $36,300 |
| Cleaners | $50,000 | $55,000 | $60,500 |
| Web Manager | $15,000 | $16,500 | $18,150 |
| Bus Driver | $15,000 | $16,500 | $18,150 |
| Total Salaries | $394,000 | $433,400 | $476,740 |
Financial Plan of bounce house
While setting up a business, it is quite natural to think how much does bounce house business make? You can get an idea for this by developing a financial plan that will guide you in efficiently managing the expenses of your business. It will also ensure that you are not losing more money than you are making and you don’t end up as a jump house business for sale.
8.1 Important Assumptions
| General Assumptions | |||
| Year 1 | Year 2 | Year 3 | |
| Plan Month | 1 | 2 | 3 |
| Current Interest Rate | 8.12% | 8.20% | 8.26% |
| Long-term Interest Rate | 8.40% | 8.44% | 8.47% |
| Tax Rate | 24.03% | 24.21% | 24.60% |
| Other | 0 | 0 | 0 |
8.2 Break-even Analysis
| Break-Even Analysis | |
| Monthly Units Break-even | 5340 |
| Monthly Revenue Break-even | $132,500 |
| Assumptions: | |
| Average Per-Unit Revenue | $231.00 |
| Average Per-Unit Variable Cost | $0.62 |
| Estimated Monthly Fixed Cost | $163,800 |
8.3 Projected Profit and Loss
| Pro Forma Profit And Loss | |||
| Year 1 | Year 2 | Year 3 | |
| Sales | $972,000 | $1,121,395 | $1,378,868 |
| Direct Cost of Sales | $365,000 | $390,610 | $434,749 |
| Other | $0 | $0 | $0 |
| TOTAL COST OF SALES | $365,000 | $390,610 | $434,749 |
| Gross Margin | $607,000 | $730,785 | $944,119 |
| Gross Margin % | 62.45% | 65.17% | 68.47% |
| Expenses | |||
| Payroll | $394,000 | $433,400 | $476,740 |
| Sales and Marketing and Other Expenses | $145,000 | $148,000 | $156,000 |
| Depreciation | $2,300 | $2,350 | $2,500 |
| Leased Equipment | $0 | $0 | $0 |
| Utilities | $2,900 | $3,000 | $3,100 |
| Insurance | $2,100 | $2,100 | $2,100 |
| Rent | $2,900 | $3,000 | $3,200 |
| Payroll Taxes | $24,000 | $25,000 | $27,000 |
| Other | $0 | $0 | $0 |
| Total Operating Expenses | $573,200 | $616,850 | $670,640 |
| Profit Before Interest and Taxes | $33,800 | $113,935 | $273,479 |
| EBITDA | $33,800 | $113,935 | $273,479 |
| Interest Expense | $0 | $0 | $0 |
| Taxes Incurred | $6,760 | $22,787 | $54,696 |
| Net Profit | $27,040 | $91,148 | $218,783 |
| Net Profit/Sales | 2.78% | 8.13% | 15.87% |
8.3.1 Profit Monthly
8.3.2 Profit Yearly
8.3.3 Gross Margin Monthly
8.3.4 Gross Margin Yearly
8.4 Projected Cash Flow
| Pro Forma Cash Flow | |||
| Cash Received | Year 1 | Year 2 | Year 3 |
| Cash from Operations | |||
| Cash Sales | $51,000 | $55,080 | $59,486 |
| Cash from Receivables | $22,000 | $23,760 | $25,661 |
| SUBTOTAL CASH FROM OPERATIONS | $73,000 | $79,570 | $85,936 |
| Additional Cash Received | |||
| Sales Tax, VAT, HST/GST Received | $0 | $0 | $0 |
| New Current Borrowing | $0 | $0 | $0 |
| New Other Liabilities (interest-free) | $0 | $0 | $0 |
| New Long-term Liabilities | $0 | $0 | $0 |
| Sales of Other Current Assets | $0 | $0 | $0 |
| Sales of Long-term Assets | $0 | $0 | $0 |
| New Investment Received | $0 | $0 | $0 |
| SUBTOTAL CASH RECEIVED | $74,000 | $79,000 | $85,000 |
| Expenditures | Year 1 | Year 2 | Year 3 |
| Expenditures from Operations | |||
| Cash Spending | $42,000 | $42,000 | $45,000 |
| Bill Payments | $27,000 | $28,000 | $31,000 |
| SUBTOTAL SPENT ON OPERATIONS | $69,000 | $70,000 | $76,000 |
| Additional Cash Spent | |||
| Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 |
| Principal Repayment of Current Borrowing | $0 | $0 | $0 |
| Other Liabilities Principal Repayment | $0 | $0 | $0 |
| Long-term Liabilities Principal Repayment | $0 | $0 | $0 |
| Purchase Other Current Assets | $0 | $0 | $0 |
| Purchase Long-term Assets | $0 | $0 | $0 |
| Dividends | $0 | $0 | $0 |
| SUBTOTAL CASH SPENT | $69,000 | $74,520 | $80,482 |
| Net Cash Flow | $21,000 | $23,000 | $25,000 |
| Cash Balance | $27,000 | $30,000 | $33,000 |
8.5 Projected Balance Sheet
| Pro Forma Balance Sheet | |||
| Assets | Year 1 | Year 2 | Year 3 |
| Current Assets | |||
| Cash | $275,000 | $308,000 | $338,800 |
| Accounts Receivable | $24,000 | $26,880 | $30,213 |
| Inventory | $4,300 | $4,816 | $4,900 |
| Other Current Assets | $1,000 | $1,000 | $1,000 |
| TOTAL CURRENT ASSETS | $282,000 | $315,840 | $355,004 |
| Long-term Assets | |||
| Long-term Assets | $10,000 | $10,000 | $10,000 |
| Accumulated Depreciation | $19,400 | $21,728 | $24,444 |
| TOTAL LONG-TERM ASSETS | $24,400 | $27,328 | $30,744 |
| TOTAL ASSETS | $294,000 | $329,280 | $370,440 |
| Liabilities and Capital | Year 4 | Year 5 | Year 6 |
| Current Liabilities | |||
| Accounts Payable | $18,700 | $20,944 | $23,541 |
| Current Borrowing | $0 | $0 | $0 |
| Other Current Liabilities | $0 | $0 | $0 |
| SUBTOTAL CURRENT LIABILITIES | $19,000 | $21,280 | $23,919 |
| Long-term Liabilities | $0 | $0 | $0 |
| TOTAL LIABILITIES | $15,000 | $16,800 | $18,883 |
| Paid-in Capital | $30,000 | $30,000 | $31,000 |
| Retained Earnings | $53,000 | $57,770 | $63,547 |
| Earnings | $193,400 | $210,806 | $231,887 |
| TOTAL CAPITAL | $285,000 | $310,650 | $341,715 |
| TOTAL LIABILITIES AND CAPITAL | $300,000 | $329,280 | $370,440 |
| Net Worth | $293,400 | $319,806 | $351,787 |
8.6 Business Ratios
| Ratio Analysis | ||||
| Year 1 | Year 2 | Year 3 | INDUSTRY PROFILE | |
| Sales Growth | 7.25% | 8.03% | 8.90% | 3.00% |
| Percent of Total Assets | ||||
| Accounts Receivable | 9.21% | 10.20% | 11.31% | 9.80% |
| Inventory | 5.39% | 5.97% | 6.62% | 9.90% |
| Other Current Assets | 2.11% | 2.34% | 2.59% | 2.40% |
| Total Current Assets | 149.80% | 151.00% | 152.00% | 158.00% |
| Long-term Assets | 11.55% | 11.60% | 11.64% | 12.00% |
| TOTAL ASSETS | 100.00% | 100.00% | 100.00% | 100.00% |
| Current Liabilities | 4.90% | 4.94% | 4.98% | 4.34% |
| Long-term Liabilities | 0.00% | 0.00% | 0.00% | 0.00% |
| Total Liabilities | 7.59% | 7.65% | 7.72% | 7.38% |
| NET WORTH | 100.45% | 101.25% | 102.19% | 110.00% |
| Percent of Sales | ||||
| Sales | 100.00% | 100.00% | 100.00% | 100.00% |
| Gross Margin | 94.60% | 97.15% | 99.87% | 99.00% |
| Selling, General & Administrative Expenses | 93.56% | 96.09% | 98.78% | 97.80% |
| Advertising Expenses | 1.52% | 1.56% | 1.60% | 1.40% |
| Profit Before Interest and Taxes | 41.50% | 42.62% | 43.81% | 33.90% |
| Main Ratios | ||||
| Current | 34 | 35 | 36 | 32 |
| Quick | 33 | 33.8 | 34.645 | 33 |
| Total Debt to Total Assets | 0.18% | 0.18% | 0.17% | 0.40% |
| Pre-tax Return on Net Worth | 74.08% | 74.89% | 75.00% | 75.00% |
| Pre-tax Return on Assets | 96.30% | 101.12% | 106.17% | 111.30% |
| Additional Ratios | Year 1 | Year 2 | Year 3 | |
| Net Profit Margin | 33.56% | 34.60% | 35.67% | N.A. |
| Return on Equity | 55.80% | 57.53% | 59.31% | N.A. |
| Activity Ratios | ||||
| Accounts Receivable Turnover | 7.7 | 7.8 | 7.8 | N.A. |
| Collection Days | 100 | 100 | 100 | N.A. |
| Inventory Turnover | 32.4 | 34.02 | 35 | N.A. |
| Accounts Payable Turnover | 15.6 | 16 | 16.3 | N.A. |
| Payment Days | 27 | 27 | 27 | N.A. |
| Total Asset Turnover | 2.5 | 2.5 | 2.6 | N.A. |
| Debt Ratios | ||||
| Debt to Net Worth | -0.04 | -0.03 | -0.04 | N.A. |
| Current Liab. to Liab. | 1 | 1 | 1 | N.A. |
| Liquidity Ratios | ||||
| Net Working Capital | $244,000 | $257,664 | $272,093 | N.A. |
| Interest Coverage | 0 | 0 | 0 | N.A. |
| Additional Ratios | ||||
| Assets to Sales | 0.85 | 0.87 | 0.89 | N.A. |
| Current Debt/Total Assets | 1% | 0% | 0% | N.A. |
| Acid Test | 29 | 29.12 | 29.16 | N.A. |
| Sales/Net Worth | 2.1 | 2.2 | 2.2 | N.A. |
| Dividend Payout | 0 | 0 | 0 | N.A. |
FAQ
- Is a bouncy castle business profitable?
If you are wondering is a bounce house business profitable?, you should be assured that it is. However, you should wait for a year after starting a bounce house business to have a clearer idea of what profits to expect in the future.
- How much does it cost to run a bouncy castle?
The costs of running a bouncy castle depend on many variable factors such as area of business, competitor rates and scale of services, etc. You can gain more insight into this through the business plan above.
- Is jumping castles a good business?
Yes, this industry has experienced significant growth over the last decade, with inflatables present at almost every event catering to children.
- How do I start a jumping castle business?
You can refer to this bounce house business plan for Go Inflatables. It gives an overview of what needs to be put together to write your own bouncy castle business plan and make your business a success
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