Do you want to know how much money balloon businesses make yearly? If YES, here are 7 factors that determine the income & profit margin for balloon shops.
Whenever any entrepreneur wants to start a new business, one of the first questions that they usually ask is how much they are likely to make on the average daily, weekly or yearly from the business. This narrative also applies to entrepreneurs who are looking towards opening a business that involves selling balloons and perhaps decorating with balloons.
They would want to know how much they are likely going to make from their balloon business. There is no one-mold-fits-all when it comes to how much a balloon business is expected to make. There are some factors that we are going to look into before giving an estimate of how much an average balloon business makes yearly and these factors are;
7 Factors That Determine How Much Balloon Businesses Make
1. The Size of the Balloon Business
Under normal circumstances, one cannot conveniently state the amount a balloon business is expected to make yearly if you do not know the size of the business.
As a matter of fact, the amount a small balloon business is expected to make annually will be far different from the amount a standard balloon business franchise with several outlets will make even if they operate in the same location. Of course, the amount invested in a small roadside balloon business is different from the amount invested in a larger business hence the amount they will both make will be different.
One the average, the approximate cost of starting a balloon business depends on what the owner has in mind and their financial capacity.
When it comes to setting up a new business, location plays a major role which is why feasibility studies and market survey are essential before settling for a location.
Usually, if your balloon business is located in an area with good human and vehicular traffic, an area in the hub of social activities and you have different types of designs and quality balloons from different brands, you may not have to struggle to get people to visit your shop and make purchase or hire your services.
Please note that, the amount a balloon business that is located in a low traffic area will make yearly will be far lower when compared to the amount a balloon business that is located in a high – traffic area in a cosmopolitan city will make.
So, if you want to make it big with your balloon business, then you must be ready to rent a store in a high traffic area, a location with the right demography of people with the lifestyle and purchasing power to buy from you. Please note that you are going to be paying more to rent a store in a high – traffic area in the hub of social activities like event center.
3. The Types of Complimentary Products and Services Offered by the Balloon Business
Another important factor that will determine how much a balloon business is expected to make yearly is the type of complementary services offered alongside selling balloons.
No doubt, a balloon business that goes beyond selling balloons to selling basic air pump (hand and/or electric), a sizing guide to inflate the balloons correctly, helium tank and helium inflator for helium balloons et al and also offering balloon decoration services for parties and events will definitely make more money than a balloon business that is only into retailing balloons.
4. The Management Style of the Balloon Business
Another key factor that will determine the amount a balloon business is expected to make yearly is the management style of the balloon business.
Trust me, the results you will get when you have a good manager will be far greater than what an average or bad manager will get; definitely their results will be obvious and different even if you give the managers same conditions to work and same products to retail.
5. The Business Model of the Balloon Business
There are different business models that a balloon business can adopt and these business models offer different results. For example, the amount a balloon business that also run an online store makes yearly will be different from the amount a strictly brick and mortar balloon business will make.
The amount a balloon business that also sell and operate franchise will make yearly will be far different from the amount a strictly one location walk-in business will make. This goes to show that the amount a balloon business will make yearly is dependent on the business model of the business.
Another key factor that will determine the amount a balloon business can make yearly is the advertising and marketing strategies adopted by the balloon business. Trust me, there are several advertising and marketing strategies that can help a business increase their earnings, but you may be expected to spend more.
But the results you will make will far outweigh the amount you spent on advertising and marketing. Of course, you don’t expect a balloon business that is engaging in aggressive advertising and marketing to make same amount yearly with a balloon business that is passive with its advertising and marketing.
7. The Number of Years the Business is in Existence
In business, the number of years you are in existence will go a long way to determine the amount you will make especially if the business is properly managed. This is because you would have over the years won loyal customers.
For example in your first fiscal year (FY1) you might make two hundred and fifty thousand dollars ($250,000), in your second fiscal year (FY2) you might make seven hundred and fifty thousand dollars ($750,000) and in your third fiscal year (FY3) you might make one million, five hundred thousand dollars ($1,500,000).
Interestingly, most businesses including balloon business usually breakeven from the third year of operations. Usually, a small – scale but standard balloon business that is located in a high traffic area in a cosmopolitan city in the United States of America will make on the average several hundred thousands of dollars annually all things being equal.
Estimated Profit Margin for a Balloon Business
The profit margin for balloon business owners can vary a great deal and it depends on your area as well as what you specialize in. Some individuals make $25,000 a year or more serving only as balloon decorators for parties, whereas others make $50,000 or more primarily making balloon animals for private events.
For example, a balloon business that also offer customized services could charge a higher price for things like custom balloon animals: up to ten dollars per creation, or if you are working at an event, about $100 per hour to make as many balloons as you can during this time (typically no more than twenty).
The bottom line is that it is a profitable industry and the worldwide market for Party Balloon is expected to grow at a CAGR of roughly 5.2 percent over the next five years, will reach 300 million USD , from 220 million USD in 2019, according to a new Research study.