The Koerner Office - Business Ideas and Deep Dives with Chris Koerner - How to Growth Hack a Bounce House Rental Biz with $1,600 (Step-by-Step Guide) Ep. #105

Episode Date: December 16, 2024

In this episode, I dive deep into the bounce house rental business, breaking down how you can start with a one-time investment of $1,600 and get your money back the first month. From low overhead to high margins, I discuss why this is one of the best side hustles that can grow into a 6, 7, or even 8-figure business. I recently spoke with the owner of Castles of Dallas, a successful bounce house rental business, to bring you real-world insights on finding your first customers, leveraging referral marketing, and scaling efficiently using Facebook Marketplace, Craigslist, local mom groups, and more.Timestamps below. Enjoy!---Watch this on YouTube instead here: tkopod.co/p-ytAsk me a question on or off the show here: http://tkopod.co/p-askLearn more about me: http://tkopod.co/p-cjkLearn about my company: http://tkopod.co/p-cofFollow me on Twitter here: http://tkopod.co/p-xFree weekly business ideas newsletter: http://tkopod.co/p-nlShare this podcast: http://tkopod.co/p-allScrape small business data: http://tkopod.co/p-os---00:00 Introduction to Bounce House Rental Business00:32 Explanation of New Format01:37 (Episode Starts Here) Why Bounce House Business? 04:07 Tweet about bounce house rental Business07:06 Marketing and Scaling Strategies09:44 Operational Insights and Challenges15:08 Industry Insights and Opportunities22:37 Conclusion and Next Steps

If you have ever even thought about starting a bounce house rental business, then today is your lucky day. I'm going to dive deep on the bounce house rental business and how you can spend $1,600 one time and then make $1,600 in profit every month for just a few hours worth of work. Today is a deep dive on the bounce house rental business, how you can start it as a side hustle and keep it as a side hustle, or you can start it as a side hustle and scale into something big and profitable. This could be a seven or eight-figure business if you really want to go crazy with it. So listen up.

You're going to love it. Welcome to the Kerner office. This is Chris Kerner and I'm going to do something a little different today. So obviously I have these deep dives where I interview someone, maybe as a fuel delivery business, maybe it's a sleep consulting business, a line striping business, you get the idea. And it's cool because you get to hear from a business owner from the source directly what it's like. It's cool, it's great. I love it. Hopefully you love it. But I wanted to try something different. What if I did a deep dive without a guest where I spent a bunch of hours visiting a business in an industry or speaking with a business owner in an industry or. or looking up data on perplexity or online and just diving deep about everything there is to know about that industry, how people are growth hacking it, how they're making money, unique concepts I'm seeing within the industry. And then I just come back and report it at all, just me and you. That's what I want to try today. And please let me know in the comments if you like it.

It's kind of crazy. I put these episodes out there that thousands of people listen to and then like two people will reach out and say, I liked it or I didn't like it. Chris at cofounders.com. If you're on Apple, you can't really comment. If you're on Spotify, you can comment, but you can always email me. If you DM me, I probably will not see it. But let me know what you think of this style. So today I'm going to do the bounce house business. Why the bounce house business? Well, for starters, I love the business. I just love it. You can spend

$1,500 on a commercial bounce house, and you can rent that sucker out for $400 for half a day, one day a week, three days a week, whatever. You can get your money back in the first month. And all you need is a van, like even a minivan or a trailer or a truck, something. I mean, these things weigh 80 to 250 pounds and they're big. They take up a lot of space. You need a dolly. You need to strap them down. So you can't just put them in a Prius.

But you can put a hitch on your Prius and then put a trailer on your Prius and pull it around. Anyway, I love this industry. I've always loved it. One of my first viral tweets was about this industry. And I just spent three hours with a bounce house business owner two days ago because I'm starting to film more, I don't know what they're called, there's probably a word for it, but out and about style YouTube videos where I actually think of it like dirty jobs, right, where I go out there.

I'm with the business owner, but it's like dirty jobs, but for the business minded, right? Or diners, drive-ins and dives, but for the business-minded. So in diners, drive-ins and dives, he says, what's your best recipe? Chicken fried steak. Show me how you make it. Exactly. Oh, okay. And it's really good content because Guy Fiati, no, like he's been in the restaurant industry

forever. And so he speaks the language and he could recognize things and he can cross-associate things. And so he's entertaining, but it's also really good content because he's knowledgeable and you're getting an inside look behind the curtain that most people never see. So he's like, oh, you use white pepper because the black pepper is too strong when mixed with the cardamom or whatever. Like, he just knows what the chefs and business owners are doing. So it makes for good content. So I'm hopeful that if I do segments or episodes similar to those where I'm actually on-site, but instead of asking about the recipe, I'm asking about the marketing channels. I hope and think that'll be good content.

Anyway, let's do this. Let's dive in. I'm going to start by doing something a little different. I'm going to read that first viral tweet that I had about the industry. And then I'm going to fact check myself and correct myself because I didn't know much of anything about this industry when I first put that out there. And now I know somewhat a little bit about it. So let's start with that.

And then I'm going to correct any inaccuracies that may exist. And I haven't read this in like over a year. I didn't even prep for this interview. So we'll see how this goes. And then I'm going to tell you about everything I just learned about how you can start this business. And is the industry growing? Is it shrinking?

Is it a good business? Is it too much of a headache for what it's worth? Let's go. Let's dive into it. Where's everyone making millions on bounce house rentals? I've already had 150 milligrams of caffeine. So let's knock this out real fast. Here's how I'd launch this business in DFW.

Bounce house rentals is an awesome business because low overhead, built in referral marketing, high margins, scale fast with low capital risk, plenty of cheap labor, side hustle that can scale. Start by using card, C-A-R-R-D to whip up a $9 site with these plugins, scheduling and stripe. What's your business name? Keep it simple. Start with your city's name. Allen, Texas is a quintessential American suburb, middle class, young, 100,000 people.

So we'll use this for our example. Allen bounce house rentals, very original, right? Hyperlocal and good for SEO. Go to eBay and find three different bounce houses in the 500 to 15,000. $800 range, one boy themed, one girl themed, one neutral. Find some reputable sellers with plenty of inventory. Look for the best sellers. Best sellers equal easier to rent. You can filter for all this stuff. Don't just buy any of them just yet. Find some screenshots of these three bounce houses and put them on your card site before you ever buy one. Price them as such. $300 for four hours,

$400 for $800 for $800 for $400 for $8. Free delivery and pickup. Yes, stupidly cheap. We'll change this later. Who wouldn't pay $300 to entertain 30 kids for four hours? You don't want huge fancy bounce houses where you need an attendant to stay and babysit. You can't afford that and you're dropping these things off. Keep them simple at first. Go to YouTube and find the SMB, small to medium size business, bounce house, rabbit hole. Spent hours learning the tricks of the trade and the lingo. Learn what pitfalls to watch out for because guess what? I've never started a bounce house biz. Who cares though? Neither of you and you'll crush it. Now before you collect a dime, go get some insurance. Where to get insurance? I don't know. Google bounce house rental insurance. Get yourself covered. Then

use chat GPT to make a liability waiver and upload it to doc you signed. Be sure the contract is super strict. No more than X kids at a time. You must be watching them at all times. You aren't liable for anything, et cetera. By the way, I'm not a lawyer. This is freaking Twitter and I'm oversimplifying. Probably get a lawyer to look over the contract. Back to your website. Leave wide open availability on your calendar starting three weeks out, three rental slots deep per time frame. Why? You want to oversell your spaces. This gives you a valid reason to buy more than one of each bounce house. You'll pay for each house on two to four rentals. Also, you want to charge $50 for someone to book the time slot. Get their email and MailChimp with an automated link to pay the remainder

a week before the reservation date. Charging only $50 to book reduces friction of charging 100% up front while removing most cancellation risk. Give yourself a two-hour window to drop off and pick up. Don't have a truck. Pay you haul $200 to add your hitch to your car and buy a $1,000 trailer on Craigslist. Now, Rocket Science. Now, time to get some customers. This is the fun part.

Remember, story sell better than products. Join every local Facebook group you can find and sell your personal story. Maybe you're still in high school or college, earning money for school. Maybe you have a full-time job doing this on the nights and weekends. Maybe you're saving your kids college. If you don't have the cool story, then event one. Find the mom's group on Facebook. Remember, moms are your customers, not dads or kids.

There's a ton of local mom Facebook groups. Sell them a discount. Reach out to the admin and offer referral code to tell them you're young and hungry. Also post ads in Facebook marketplace everywhere. Craigslist, same same. Post ads everywhere. Your phone will ring. Get these first few jobs.

When you do, start buying the bounce houses. Good thing you found ones from reputable sellers with plenty of stock. Once they arrive, set them up in your backyard and check for leaks. And learn their quirks. Learn how to collapse them quickly. Buy a heavy duty dolly to move them to and from your trailer. Now for the built-in referral marketing, go online and buy some huge freaking vinyl signs to attach to the top of every bounce house you buy, Alan Bouncehouserentals.com, all caps.

Also put a QR code. They will pop up over the privacy fences. Everyone and Alan has a privacy fence for all passers buy to see. But you're not done. Go buy a bunch of $25 Amazon physical gift cards. When you go pick up the bounce houses, offer a gift card right there on the spot. If the mom posts a pick, a testimonial, and a link to your site to her Facebook slash Instagram page, have her show it to you and tag your business Facebook page.

Be goofy about it, not pressuring. This $100 will pay off 10x. Calls slowing down, get bandit signs. I talk all about them in my thread here. Now your phone won't stop bringing. Why localize to one city only? Because driving. Also, it's much easier to sell to those residents.

Now prove the model and either change your name, copy, paste your card site and make Plano Bouncehouse Rentals.com and grow. By the way, you can literally copy and paste a card site with one click. These jobs mostly won't be during school hours, so hire high schoolers for $15 an hour. This is scalable. And if you don't want to scale, then make 100K every summer. As you grow, you can buy bigger and better bounce houses. There are 37,000 households in Allen. So you're telling me that one to two percent of them won't rent a bounce house from you every year. You've got a six-figure

business. Also, McKinney, Plano, Frisco want your business too because moms have friends and they're posting to Facebook. Remember, anyway, good luck with this. It won't be easy, but it'll be fun and you'll make some cash. The best part, once you do this, you can apply these same principles to any other business. The first few customers are the hardest. After that, your referral marketing will kick in. Anyway, that's it. That's the tweet that I put out there. Let me see if there's anything I would correct after learning a lot more about this business on site in person. Okay, I called this business low overhead, built in referral marketing, high margins, scale fast or low capital risk, plenty of cheap labor, side hustle that can scale. Low overhead, absolutely. Still stand by that.

Built in referral marketing. Yes, but is unproven. I don't know. The person that I talked to, that owns this business, they don't try that. They've never tried it. So it could work. It might not. High margins, yes. Scale fast with low capital risk. And I don't know about scale fast. I don't know about that. It might be tough to scale. This is a business with low barriers to entry, right? Low barriers to entry equals you're probably going to have a lot of competitors now and in the future. It comes with tradeoffs. Plenty of cheap labor. Yeah, there's a lot of high schoolers out there. But it's not easy managing high schoolers. That can be a challenge. But the business that I just spent time with, Castles of Dallas was their name.

They only have a few employees, and it's like their nieces, nephews, family members. They mostly do this themselves, and it's a six-figure business. Side hustle that can scale? Yes, I definitely still stand by that. Here's what I would change about this tweet. Three different bounce houses. One boy themed, one girl themed, one neutral. No, I wouldn't do that.

I would make them all neutral based on a conversation that I had with this business owner. I asked her, what's the 80-20 of the bounce house business? Like if I'm going to buy one bounce house or two, what are you going to push me towards? Because they've been in the business for 10 years. And they said very specifically like a bounce house castle with a slide that is detachable. Because then they can remove the slide and play with that. They can keep the slide on it. And then if they were to get a second one, it would be a water slide.

That's like the first two you want to get. And these guys know what they're talking about because they do rentals. That's their primary business. But they also manufacture them on site. And so they know what their local customers are buying and what they're buying. more of and what they're repairing because that's their third line of business repairs so they know exactly what's getting used the most in DFW and I'm pretty sure what's getting used the most here is going to use the most everywhere. Now I talked about getting a

U-Haul renting a U-Haul or buying a thousand dollar to launch this. Absolutely still stand by that. Joining Facebook groups, Facebook Marketplace, Craigslist to Market, absolutely. One thing I don't know if I still stand by is the make $100,000 every summer if you don't want to scale and make this full time. I think that's pretty aggressive. Let's just talk about top line revenue. If your average rental is $400 and you do 10 of these every week, that's 10 pickups, 10 drop-offs, 10 cleanings, because you do have to clean them every time if you want to be legitimate and not get bad reviews. I learned that. Say every pickup and drop-off is 45 minutes or an hour and a half total. So that's 10 and a half hours for a week of picking up and dropping off.

Let's say an hour to clean. That's 20 and a half hours. So $4,000 a week for a part-time job, give or take. That doesn't include marketing time. 20 hours a week, $4,000 a week, 12 weeks to summer. That's $48,000 in the summer. If you do 10 rentals a week, top line, maybe bottom line is 20,000. So times that by five to get 100,000 bottom line in the summer. You're going to have to do 50 drop-offs and deliveries per week. Now, let's say you get a big box trailer. 50 per week is really going to be more like 40 on the weekends and 10 during the week. Actually, I take that back because they said during the summer, it's not weekend heavy. But outside of the summer, it is weekend heavy, which makes sense.

So 50 deliveries per week, spread across five days. That's 10 per day. You could probably do just the deliveries and drop-offs with one person. If you plan your route and if you have a tight radius that you work within, if you have 10 deliveries in the day, you can load up all 10 in a box truck and just kind of drop them off in a route. So you will utilize economies of scale as you grow. But let's just say, let's just say it's one person working

and 80 hour weeks in the summer. They're just really hustling. They're working late nights to clean. They're working all day to deliver and pick up. Theoretically, you could make $100,000 in a summer net profit if you did 50 deliveries a week. But that means you're probably going to need to get like 200 to 400 leads a week, calls a week. Let's say it's 300. That's like 40 a day.

40 calls a day. Four calls every hour. That's a lot of leads. It would be tough to do a hundred. hundred grand profit in the summer. Possible, sure. But you're going to need some employees probably and that'll cut into your margins. So anyway, that was a little bullish. But what I did learn is that a very high quality bounce house from China is about $1,800. Like you want it to be triple-threaded, vinyl, multiple layers of vinyl. You need to get it repaired every time you get a leak. Repairs only

cost $15 to $40 for each time. But you got to think every time you're getting a lot. You're this repaired, you got to lug around this 100 pound piece of vinyl. Not easy. These things are huge. You've got to clean them when it's not raining or else they'll get muddy. Sometimes you need a pressure washer to clean them if they're real bad. You can't wrap them up when they're wet. So you need a place to set them up. Preferably a place indoors and a place outdoors if you want to be able to clean them when it's raining. And then you've got to let them dry and then you've got to fold them up and then you got to store them probably with a tarp on it so it doesn't get wet when it rains when it's outdoors. You'll see in the in the video in the out and about.

style video that will come out next month, what their setup looks like. But they only pay $1,500 a month in rent for this metal building that's on this massive highway that probably gets 40,000 cars a day. Like, it's the most amazing setup. Let's talk about what I learned about the industry. The industry is growing at 6.2% every year, which is a lot. The bounce house market size is about $4 billion. And North America has about 42% of the global bounce house market. In a post-COVID world, There's a lot more demand for outdoor in-person experiences. Oh, and this is the best thing I love about this business is that you can easily, easily loop in all kinds of other rentals.

The place I visited has those $80 lifetime six-foot tables that like fold out. They're $80 and they rent them out for like $5 a day. They have those plastic cheap folding chairs that cost them $15. They rent those out for $2 a day. And it's a no-brainer. They said 70 to 80 percent of their bounce house rentals also rent plastic tables and folding chairs. Because it's a kid's party. They need something to put snacks on. They need a place for the kids to sit. And so all of those ancillary rental items get paid off in the first couple months.

And then it's basically pure profit from then on out. This industry is extremely fragmented. There's not like a massive nationwide franchise bounce house company that's just dominating, which I love the hard parts about it. It's weather sensitive. You might have to implement a rain check policy depending on where you live. But I just love the referral marketing aspect of this. I just, I wish I could talk to someone that's doing this because when a mom comes to pick up her kid from a bounce house party, all the mom's there that are coming to pick up their kid are your next potential customers. It's a beautiful thing. All these kids are jumping in your product that their parents could be renting out the following weekend. And so I wouldn't even ask permission to put a

massive banner with my domain name and QR code at the top of every bounce house that gets rented out. That's just going to be the standard for me. So then when mom comes to pick him up and she sees how much fun little Johnny's having, she's going to pull out her phone, scan the QR code and submit a lead to you. You can rent out tents like the big white tents they use at weddings, portable flooring stages, canopies, backdrops, and then you can get into the wedding event rental space. You can do photo walls, photo booths, the list goes on and on and on. Popcorn machines, cotton candy machines, snow cone machines, margarita machines, chocolate fountains, portable restrooms, generators, fans, coat racks. I love the rental business because the stuff gets

paid off and then you can appreciate it and then you can sell it. So how can you find out what demand there is for bounce house as well? It's December 15th right now. It's not bounce house season, depending on where you live. But you can still do research. You can still post a Facebook marketplace. It doesn't cost you anything to do that. You will at least learn something. I'd start asking around posting on these marketplaces, seeing if you get anything, just post pictures that you get from the internet before you even buy a bounce house. Here's what I love about this Castles of Dallas business does. They saw that they were getting tons of competitors all the time. And they thought, huh, how can we turn this lemon into lemonade?

Well, they started repairing bounce houses. Because if they're getting more competitors, then they want to be in the repair business, not only the rental business. Or if they're getting more competitors, they want to be in the manufacturing business because these things cost hundreds of dollars to ship from China, unless you're going to buy a whole shipping container full, which literally no one's going to buy a shipping container full of bounce houses. So you can spend $1,800 on one from China.

which may or may not include shipping. So call it $2,000 just to be safe. Or you can buy one that's manufactured in Dallas for $1,500. That's just as good a quality. It's made out of the same stuff and you don't have to pay for shipping. And then you're like the expert. You're like the local market expert in the industry. You can start sending your competitors a newsletter about what's happening,

what are people renting out. And then when your competitor gets a booking and all their stuff's booked out, they're going to call you and say, hey, I've got this rental in Plano. But I'm all out. Would you want it? You give me 25% of it. And you'll start getting referral calls. That's what's happening to these guys.

Insurance. We got to talk insurance. So Castles of Dallas spends $7,000 to $10,000 a year on insurance. It's a nothing burger. It really is nothing. And they've never had an accident. Knock on wood. They've been in business for 10 years.

They charge $100 an hour to leave an attendant there. And they're paying that attendant like $15 an hour. So that's a really good business as well. Imagine starting a programmatic SEO website for bounce house rental leads, right? Find all these far flung rural areas because that is one thing they told me is that southeast Dallas was the best market to launch a bounce house rental business because it's still quite rural. Whereas North Dallas, Plano, Frisco, McKinney, there's a ton of infill and therefore there's a ton of bounce house rental companies.

But the rural areas are really profitable for these guys. You can start a programmatic website selling bounce house rental leads to bounce house companies. Oh, also she said that a paper click on Google does really, really well for them. It converts very nicely. You could sell party supplies, rent party supplies, face painting. You could piggyback on like petting zoo businesses or other types of rental businesses that don't currently offer bounce house rentals. Set up a massive bounce house in your front yard with a big banner and leave it there.

That's what they do at their business. If I were to launch a bounce house rental business from my house, oh my gosh. My house gets 22,000 cars driving by a day. If I already get a massive bounce house, spend $3,000. on it, put it up in my front yard 24-7 with a huge banner. Oh man, just that alone would be, would make this a six-figure business. I'm not exaggerating. 22,000 cars every day. This is a $500 ticket item. If a half a percent of those cars driving by a day, call me for a lead. That's 100 leads a day. A half a percent. If I close 20 percent of that, that's 20 leads a day. Now you, listening to

this, you probably don't live on a street that gets 22,000 cars a day. And for that, I'm grateful for your sake because it's not the best, but it is good for business. Imagine buying like a super weird quirky bounce house that naturally draws the eyeballs. We haven't even talked about Instagram, using social media for this stuff. Oh, how do I forget to talk about obstacle courses? Obstacle courses. So funny story about how I found this company to go spend three hours with a couple days ago. So I had lined up an appointment to go make a Christmas light installation video on-site in person with my camera crew. And he flaked out on me last. Last minute. minute. The morning of, this was Friday morning, December 13th, Taylor Swift's birthday of all

of all days. I scraped a list of every bounce house rental company that was close to my videographer. He lives south of Dallas, awesome guy, Micah. There were 77 of them. I texted all 77 and said, hey, you don't know who I am. I don't know who you are. I know this is random. I saw your number on Google. I really need to film a video on the bounce house rental business. I have this podcast and I sent, if you're on my newsletter, tkopod.com, you can subscribe. I sent a survey to all of my newsletter subscribers with 24 business ideas. And I said, tell me the one that you want to learn about the most. And bounce house rentals was number one, which is true.

That's why I'm doing a deep dive on this business. So you guys are telling me what to do content on. Anyway, I said, can I spend three hours with you this afternoon? It was raining. It's the off season for bounce houses. And like five people said yes, but four of those five were like, yes, but not tomorrow, maybe Saturday. I'm like, it has to be tomorrow.

Like, it's Christmas time. Things are crazy busy. I can't do this on Saturday. And one of them was gracious enough Castles of Dallas to say, yeah, come on over. Let's do it. And it just so happened that that was probably the only business I texted that also repairs and manufactures these things. So it's a very dynamic video.

It's not only rentals. And it's not only bounce house rentals because they do event rentals and heaters, air conditioning units, all kinds of stuff. So you're going to like the video. Anyway, it is wintertime, which means you have three, four months before the weather warms up. That gives you three, four months to plan this out and to launch this business. And you don't have any excuses.

Okay. So how do we do this? first, we find our first customer, and then we launch the business, not the other way around. Chris at co-founders.com, you can email me. Tell me if you like this format of episode or if I should just only interview people when I do deep dives. Check out my YouTube channel, free newsletter, no ads, no costs, tkopod.com. So you can vote on ideas like these and learn all kinds of cool business growth, hacks, tips and tricks, ideas, yada, yada, yada. I only send one email a week. I hope you have an amazing Monday. We will see you next time on the Kerner office. Before you close out of this window,

I went on site at a bounce house business and spent hours with them. That video is going live January 2025 right here at this link. We go really deep. It's super awesome. You're going to love it.