Must Know Haunted House Funding Issues
Many think they can turn a profit instantly and because of this lack in estimating the amount of capital they actual need to get started. You may be very passionate and enthusiastic about your haunted house but that is not enough to succeed on the professional level. These characteristics are very important but they will not pay the bills. Special attention needs to be payed to haunted house funding.
It is recommended that you start out with enough money to cover the first 6 months of expected expenses. You should not expect to generate a revenue right away and it is foolish to think you will and same goes with profits. You may open your first night and bring in money but other than at the door sales cash you get most your money may be tied up in your ticketing company for up to 30 days. Some companies payout weekly or monthly and very very few allow instant money but there are one or two out there where you can use accounts such as PayPal so you get paid nightly
The type of haunt you are starting will play a crucial role in your required start-up funding. If you are a temporary location then you do not need to cover rent or a lease for the entire year so your funds will be lower than a haunt that plans to keep a location year round because they will have to cover the monthly rent or lease payments for 12 months where you may only have to cover 3 to 4 months.
Your financial plan should be created and meticulously reviewed to make sure you are covering everything. Think about screws for wall panels, those alone could run several hundred dollars. Fake blood at $30 plus per bottle and your burning through 1-2 bottles a night for a blood and gore themed haunt will add up quick. When all these little expenses start coming together and you did not plan ahead for it you will quickly find yourself short on funds. So prevent this buy doing detailed research on what funding you will need ahead of time.
Some entrepreneurs recommend calculating out your start-up funding needs and multiplying it by 10 while others say add 20% to it. If you are haunter with little or no business experience I would lean to the 10x while if you have ran a business before or have a lot of knowledge of business then 20% might be closer to your needs.
Another successful entrepreneur author says you need enough money to cover all expenses until you reach the break-even point which is when revenues from customers pay all the expenses including your salary which for many is around the 2-3 year mark. You will read that many people claim they have started haunts and seen profits their first year. These often times are haunters who have been doing this for many years or start out by hiring a haunt consultant.
Another piece of bad news is you as the owner should not expect to collect a paycheck until after all bills and employees are paid. Some entrepreneurs who start new businesses go several years before collecting a paycheck.
Do not let this act as a roadblock, I am by no means trying to scare you away but want you to know all the facts when you step foot into this industry so you have a better chance to succeed. So take the information from this article and the many others from Haunted House Startup and put the information to work for you so you can avoid all the pitfalls that line the road.