I recently sold Boing! Bounce Rentals, the inflatable rental business I started way back in 2002. Seventeen years is a long time. I would have never guessed when I purchased those first two bounce houses that I was starting a 17 year journey with plenty of ups and downs.
Here are 8 somewhat random observations on owning and selling an inflatable rental business.
1) Not all business brokers are the same. Some will list your business at whatever ridiculous price you may think it’s worth. Others will only take the listing at a realistic valuation for which they think they can sell it. Choose the realistic broker. A broker who will take your listing at overly optimistic valuation probably won’t put much effort into selling it. Once you sign the broker agreement, you are locked into them for a year. Even if you end up finding a buyer on your own, you still legally owe them the commission.
2) Like most who start a bounce house rental business, I had young kids when I started. The time I was able to spend with them over those 17 years is the biggest return on investment I could ever want. As my kids got older they became my best employees. All the hours spent together, bonding through the hard work, would have been missed if I had a traditional job during their growing-up years.
3) You cannot build a business of value if you (the owner) are doing $10/hour work. It just does not compute. The same goes for $25/hour work. Better than doing $10/hour work, but it’s still not going to get you there. You need to build a business, not a job. You have to put the systems and processes in place and hire the right people so that the business can run without you. This is all much easier said than done. The seasonality of an inflatable rental business makes it even tougher to do. But, potential buyers with the resources to buy your “business” do not want to buy a job.
4) It seems like such a no-brainer in hindsight, but never bring on a 50/50 partner. One of you has to be the final decision maker. If you and your 50/50 partner don’t agree on things the business will stagnate. This is a mistake I made and had to suffer through it.
5) Hiring, training and keeping good employees is the toughest part of owning an inflatable rental business. I learned to always over-hire and over-staff. Hire more people than you will need because they will not all work out. When staffing an event, over-staff. Plan on no-shows and if everyone does show up, well that just makes the day easier. Obviously, weed out those who have a history of no-showing.
6) Positive online reviews are critical to your success. Almost all of your new customers will have found you online and will see your reviews. I can’t tell you how many times I heard, “I went with you because of your good reviews”. If you don’t regularly ask your customers for reviews you will rarely get one. And the odds are if you do get one, it won’t be good. My business barely had any reviews for years, and the one or two we had were negative because one of our drivers (not me) cut someone off on the road. If someone is upset, they will find the motivation to write a review, but not the kind you want. Once we started to ask for reviews and made it easy for the customer to do, the 5-star ratings started pouring in.
7) What makes your business valuable is your customer list. Particularly those customers who rent from you year-after-year. A buyer wants to know there is going to be a certain amount of guaranteed business day one. Otherwise, what’s the point of buying an existing business instead of just starting from scratch for much less money?
8) Immediately after selling my business, I still had a few months with some responsibilities for ensuring a smooth transition. Once that period ended I completely wasted the first few weekends. I just wasn’t used to having my weekends free. I couldn’t figure out what to do with myself. I was so used to being busy every weekend April through October that I never considered what I would do when I wasn’t. I have now begun the habit of planning my weekends in advance so I don’t waste them.
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