Do you want to start a haunted house? If YES, here is a 20-step guide on how to start a profitable haunted house business with no money and no experience.
If you intend starting this type of business, it is advisable to first look at the existing laws and zonal regulations in the country or state you reside in to know what is expected of you. The bottom line is that you would need to pay a visit to the regulatory bodies in your country to get all the information you need before you can legally open your own haunted house business in your city.
You can start your haunted house business from a small town in the United States and if you are good at what you do when it comes to keeping people entertained, it won’t be too long before your brand becomes a nationally recognized brand.
Steps to Starting a Haunted House Business
1. Understand The Industry
A haunted house or attraction is any space designed to entice customers by providing a scary or thrilling experience. Research has it that Americans spend about $7 billion on Halloween, and $300 million on haunted houses. These scary houses may be located in makeshift, temporary houses, corn mazes, or even old prisons or asylums.
Workers or preferably actors will dress up in costumes and pop out at customers to give them a fright. Props such as fake chainsaws or straight jackets are often used alongside fog machines and soundtracks of creepy noises.
According to reports, there are over 4,000 HALLOWEEN attractions charging admission fees to their events, with over 300 amusement facilities producing some sort of Halloween or Haunted House event such as an amusement park or family fun centre.
A Halloween Attraction could be a pumpkin patch, corn maze, hayride to a haunted house. The typical haunted attraction averages around 8,000 paid guests, although this figure depends on the market and the size of the attraction.
About 80 percent of the professional attractions in America attendance attract less than 10,000 paid guests or more than 7,500 paid guests.
Less than 10 percent of haunted attractions have attendance figures of over 35,000 paid guests. Less than 5 percent of all haunted attractions gross between 40,000 to 100,000 guests. About 15 percent of all attractions in America average between 12,000 and 20,000 paid guests.
Interesting Statistics About the Industry
A major amusement park such as Universal Studios and or Knott’s Scary Farm can gross $250 million by themselves. On a busy night, the major haunted attraction can attract over 10,000 guests while a mega amusement park like Universal might do over 40,000.
Today some haunted houses charge as much as $25.00 while some reach up to $50.00 with add on attractions. Most haunted house today cost around $20.00 per person. Major amusement park haunts charge as much as $100.00 for entry into their events.
Over 50 percent of haunted attractions in America charge less than $15.00 per person, while only 20 percent charge more than $20.00 per ticket. Reports also have it that haunted and Halloween attraction industry generates over ONE BILLION dollars in ticket sales.
This figure would include most major theme parks that operate a haunted event. The industry of haunting supports hundreds of other businesses across America from vendors that supply haunted house effects, props, costumes, masks, animations and more.
Additionally, haunted houses spend tens of millions of dollars on building supplies, advertisement, insurance and much more. We believe the haunted house industry solely drives the popularity of Halloween and Halloween retail through the spending of more than 250 million dollars on advertisement.
Halloween retail spends nearly zero dollars on marketing instead rely on locations and signs. The haunted house industry much like other industries has their own tradeshows, experts, consultants, suppliers, magazines, associations, education seminars, gatherings and events.
Haunted attraction owners spend annually over 250 million dollars with specific haunted house vendors for supplies like fog machines, to scary animatronic monsters, lighting equipment or masks and costumes to assist them in scaring America.
The biggest growth for the vendors to the haunted industry is now overseas, where haunted houses are opening at a record pace. People just love to be scared it’s not just an American thing anymore. The Haunted House Industry is an American product that is now being exported worldwide.
2. Conduct Market Research and Feasibility Studies
- Demographics and Psychographics
The demographic and psychographic composition of those who visit haunted houses is not restricted to young people (teenagers) with a taste for adrenaline but also adults who have the capacity to withstand scary scenes. In essence, the demographic composition cum target market for a haunted house is all encompassing; it is not restricted to any age group, gender, race, tribe or group of people.
So, if you are looking towards defining the demographics for your haunted house business, then you should make it far reaching.
3. Decide Which Niche to Concentrate On
It is important to state that there are no niche ideas when it comes to the haunted house because haunted house is a niche idea in the Amusement and Theme Parks industry, but players in this line of business may decide to go beyond providing scary or thrilling experience to young people, but going ahead to make available a video game house, bowling alley, BBQ joint, food and drinks court, ice cream shop and enough parking space.
The Level of Competition in the Industry
Irrespective of the line of business you decide to invest in, you are still going to compete with others who are into same area of business and haunted house business is not an exemption.
The level of competition in the Amusement and Theme Parks industry to some extent depends largely on the location of the business, your niche area of operation and of course the capacity of your haunted house. If you can successfully create a unique niche for your haunted house business, you are likely going to experience little or no competition.
For instance, if you are the only haunted house business in your location that is operating 24 hours 7 days a – week services and also operating other related fun centers, you can successfully monopolize the market for a long time before you start having competition.
It is important to also state that the competition in the haunted house line of business is not restricted to competitions amongst haunted houses, you will also be competing against all players in the entertainment and recreational industry.
4. Know Your Major Competitors in the Industry
Here are the top 20 most popular haunted houses in the united states of America;
- The Backwoods Maze
- Mable’s 6 Feet Under
- Mysterious Mansion
- 13th Gate Haunted House
- Scream Hollow Wicked Hallow
- Dark Hour Haunted House
- Fright Kingdom
- Reaper’s Revenge Haunted Attraction
- Ocean City Screams Haunted House
- Hotel of Horror
- Laurels House of Horror
- Darkside Haunted House
- Netherworld Haunted House
- The Dead End Hayride
- House of Torment
- Gateway’s Haunted Playhouse
- Bane Haunted House
- Dungeon of Doom Haunted House
- Fright Factory Haunted House
- Nightmare Haunted House.
When it comes to starting a haunted house business, you just have to get your costing cum economic analysis right if your intention of building the business is to generate profits, grow, expand the business and start competing at the national level.
When conducting costing and economic analysis for your haunted house business, you just have to critically examine these key factors; place, pricing, and promotion. As a matter of fact, you would have to continue to review these key factors at regular intervals while running your haunted house business.
As a haunted house facility business owner, you just have to have a proper grasp of your competitive landscape if indeed you want to maximize profits and be in the frontline of the industry.
It is important to note that security and facility maintenance cost is one of the most important factors contributing to the overall cost of running a haunted house facility business and should be considered as a major factor when carrying out your costing and economic analysis.
5. Decide Whether to Buy a Franchise or Start from Scratch
There are no hard and fast rules when it comes to choosing how you intend starting a business. Basically, you should be guided by your overall business vision and mission statement.
Although there are some haunted houses that are into franchising, but if you are looking towards starting a haunted house business, it will pay you to start from the very scratch because you can hardly get the franchise of haunted house business at affordable price to buy.
Besides starting a haunted house facility from the scratch is might be stressful initially but it is profitable and can run on autopilot when compared to other similar businesses.
With haunted house business, you should just try as much as possible to secure a good location, make your haunted house scary and attractive and then leverage on every marketing tools within your disposal especially the internet, to market your haunted house.
Please note that most of the successful haunted houses around started from the scratch and they were able to build a solid business brand. It takes dedication, hard work and determination to achieve business success.
6. Know the Possible Threats and Challenges You Will Face
A common challenge is that many haunted houses are subject to extreme revenue volatility throughout the year. Besides, if you decide to open your own haunted house today, one of the major challenges you are likely going to face is the presence of well – established haunted houses, amusement and theme park facilities and of course other players in the family entertainment and recreational industry in your target market location.
The only way to avoid this challenge is to create your own market. Some other threats and challenges that you are likely going to face when you start your haunted house are mature markets, bad economy (economy downturn), and stiff competition.
So also, unfavorable government policies, seasonal fluctuations, demographic/social factors, downturn in the economy which is likely going to affect consumers spending for leisure services such as haunted house and of course emergence of new competitors within the same location where yours is located.
7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)
Generally, you can either choose a general partnership, or Limited Liability Company which is commonly called an LLC for your haunted house and theme park facility.
But people prefer limited liability Company for obvious reasons. As a matter of fact, if your intention is to grow the business and welcome visitors from all across the United States of America, Canada and other countries of the world, then you should choose Limited Liability Company, LLC or even general partnership. That is the most suitable legal entity that will cut it for you.
8. Choose a Catchy Business Name
When it comes to choosing a name for your business, you should be creative because whatever name you choose for your business will go a long way to create a perception of what the business represents. Typically, it is the norm for people to follow the trend in the industry they intend operating from when naming their business.
9. Discuss With an Agent to Know the Best Insurance Policies for You
In the United States and in most countries of the world, you can’t operate a business without having some of the basic insurance policies that are required by the industry you want to operate from. Thus, it is imperative to create a budget for insurance and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your business.
Here are some of the basic insurance policies you should consider purchasing for your own haunted house in the United States of America;
- General insurance
- Health insurance
- Liability insurance
- Risk Insurance
- Workers Compensation
- Building/Property insurance
- Overhead expense disability insurance
- Business owner’s policy group insurance
- Payment protection insurance
10. Protect your Intellectual Property With Trademark, Copyrights, Patents
If you are considering starting your own haunted house business, usually you may not have any need to file for intellectual property protection/trademark. This is because the nature of the business makes it possible for you to successful run it without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.
On the other hand, if you want to leverage on this business opportunities within the industry and also to protect your company’s logo and other documents or software that are unique to you or even operation concepts and theme, then you can go ahead to file for intellectual property protection.
If you want to register your trademark, you are expected to begin the process by filing an application with the USPTO. The final approval of your trademark is subjected to the review of attorneys as required by USPTO.
11. Get the Necessary Professional Certification
When it comes to operating a haunted house business, you do not need to have any formal training or special certification before you can be allowed to open and operate a haunted house business in the United States of America. All you need is informal training that will expose you to the in and out of managing a haunted house and also effectively running the business.
On the other hand, if you come across any form of certification that can aid you to conduct your haunted house business, then by all means try and pursue such certification.
12. Get the Necessary Legal Documents You Need to Operate
It is a fact that you cannot successfully run any business in the United States without the proper documentations. If you do, it won’t be too long before the long hands of the law catch up with you. These are some of the basic legal documents that you are expected to have in place if you want to legally run your own business in the United States of America;
- Business and liability insurance
- Federal Tax Payer’s ID
- State Permit
- Certificate of Incorporation
- Business License
- Business Plan
- Employment Agreement (offer letters)
- Operating Agreement for LLCs
- Insurance Policy
- Company Bylaws
- Memorandum of Understanding (MoU)
13. Raise the Needed Startup Capital
Starting a standard, secured and well-equipped haunted house business is capital intensive even if you choose to launch the business on a small scale and you only have a handful of full-time employees on your payroll. Leasing of a standard facility that can accommodate your customers and staff members and of course equipping the facility are part of what will consume a large chunk of your startup capital.
So, if you choose to start the business on a small scale, you will still need to source for fund to finance the business. No doubt when it comes to financing a business, one of the first and perhaps major factors that you should consider is to write a good business plan.
If you have a good and workable business plan document in place, you may not have to labor yourself before convincing your bank, investors and your friends to invest in your business. Here are some of the options you can explore when sourcing for startup capital for your amusement and theme park facility business;
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Sell shares to interested investors
- Applying for loan from your bank
- Pitching your business idea and applying for business grants and seed funding from, government, donor organizations and angel investors
- Source for soft loans from your family members and your friends.
14. Choose a Suitable Location for your Business
A haunted house business comes with its own challenges; it is a business that cannot be started in any location. As a matter of fact, you will need approval from the local council and other regulating authorities in the city you intend opening your business.
Generally, in business, it cannot be overemphasized that the location you chose to start your business is key to the success of the business, hence entrepreneurs are willing to rent or lease a facility in a visible location; a location where the demography consists of young people (teenagers) with a taste for adrenaline and who also have the purchasing power, and lifestyle.
If you make the mistake of renting or leasing a facility for your haunted house in a not too visible or hidden location simply because it is cheap, then you must be prepared to spend more in promoting the business.
Most importantly, before choosing a location for your haunted house business, ensure that you first conduct a thorough feasibility studies and market survey. The possibility of you coming across similar business that just closed shop in the location you want to open yours can’t be ruled out.
These are some of the key factors that you should consider before choosing a location for your haunted house business;
- The demography of the location especially as it relates to young people
- The demand for the services of haunted houses and other recreational related facilities in the location
- The purchasing power of residents of the location
- Accessibility of the location
- The number of haunted house facilities and other recreational related services businesses that in the location
- The local laws and regulations in the community / state
- Traffic, parking and security et al
15. Hire Employees for your Technical and Manpower Needs
When starting a haunted house, you will need to always provide a scary or thrilling experience. These scary houses may be located in makeshift, temporary houses, corn mazes, or even old prisons or asylums. Props such as fake chainsaws or strait jackets are often used alongside fog machines and soundtracks of creepy noises.
In setting up a small office, you will need a computer, printer, software apps, telephones, pager, photocopier, scanner and fax machine. These machines, equipment, tools and instruments can be purchased as fairly used especially if you have limited finance to meet your budget.
When it comes to choosing between renting and leasing a facility for your haunted house, the size of the facility you want to own, and your entire budget for the business should influence your choice. Besides, you will need a facility that is in serene environment, a facility that is big enough to accommodate the number of visitors and staff member working for you.
As regards the number of employees that you are expected to kick start the business with, you would need to consider your finance before making the decision.
Averagely, when it comes to starting a standard haunted house business on a large scale, you would need the services of the following professionals; Chief Operating Officer (you can occupy this position), Marketing and Sales Executive (Business Developer), House Safety Instructor / Assistant, Human Resources and Admin Manager, Facility Manager, Customer Services Executive, Accountant (Ticketers/Front Desk Officer), Security Guards and Cleaners.
Over and above, you would need a minimum of 5 to 10 key staff members to effectively run a medium scale but standard haunted house
The Service Delivery Process of the Business
The service delivery as it relates to haunted house to a large extent depends on the organization and what they stand to achieve. Basically, a haunted house facility that is ready to welcome visitors places gate fees and perhaps ticket fees. In this business, young people (teenagers) with a taste for adrenaline are the best customers.
Older people may have health conditions where they can’t engage in heart-racing activities. Haunted houses generally charge a flat fee to participate in one or more houses. These costs need to cover and exceed the cost of the space, employee salaries, and props.
Tickets are typically anywhere from $15 to $40, but they can go even higher than that. People may spend as much as $100 or more on a custom experience. It is important to state that a haunted house facility business may decide to improvise or adopt any business process and structure that will guarantee them efficiency and flexibility.
16. Write a Marketing Plan Packed With ideas & Strategies
The fact that the entry barrier for starting a small – scale haunted house business is not too high means that there is bound to be more players in the industry no matter the location you choose to start yours. In essence, you must come up with unique and scary fun – filled activities if you must carve out a market for yourself within the available market in your community, city, state or country.
So, when you are drafting your marketing plans, make sure that you create a compelling company profile. Aside from your qualifications and experience, it is important to clearly state what you have been able to achieve in time past. This will help boost your chances in the market place when marketing your park.
Here are some of the platforms you can utilize to market your haunted house;
- Introduce your haunted house by sending introductory letters alongside your brochure to youth clubs, schools, households and key stakeholders in and around the location where your haunted house is located
- Open your haunted house services with a party so as to capture the attention of residents
- Print out fliers and business cards and strategically drop them in offices, libraries, public facilities and train stations et al.
- Make your first impression count positively to those making use of your haunted house for the first time
- Make use of attractive hand bills to create awareness and also to give direction to your haunted house
- Engage in roadshow in targeted communities from time to time to market your haunted house
- Advertise your services in community based newspapers, local TV and radio stations
- List your business and products on yellow pages ads (local directories)
- Leverage on the internet to promote your haunted house
- Engage in direct marketing and sales
- Encourage the use of word of mouth marketing (referrals)
- Leverage on the internet to promote your haunted house (when you blog regularly on key issues as it relates to your business, people who consider you an expert in the field)
- Join local chambers of commerce and industries around you with the main aim of networking and marketing your haunted house; you are likely going to get referrals from such networks.
- Engage the services of marketing executives and business developers to carry out direct marketing for you
17. Work Out a Reasonable Pricing for your Services & Products
One key factor that will help you offer your services at the right price is to ensure that you cut operational cost to the barest minimum and channel your efforts towards marketing and promoting your brand name.
You can also try as much as possible to work with independent contractors and marketers; it will help you save cost for paying sales and marketing executives.
So also, if you are able to secure business partnership as it relates to getting referrals, then you will be able to get the right pricing and of course maximize profits from your business.
18. Develop Iron-clad Competitive Strategies to Help You Win
The haunted house line of business is not a highly competitive industry, but you must come up with a unique and highly creative strategy to be able to outsmart your competitors in the industry. Part of what you need to do in order to stay competitive in the industry is to ensure that your facility is a state-of-the-art scary entertainment center with multiple attractions based around different haunted house theme.
Providing families, individuals and groups with a scary fun physical type of experience in a safe, clean, monitored environment. With multiple revenue centers and the ability to turn customers quickly.
In other to stay competitive in this industry, you must ensure that your clients are always comfortable (homely), secured and always ensure that you pay attention to details when carrying out your job. The truth is that if there are fluctuations in the services you provide, customers can choose to shift allegiance and settle for other options available.
19. Brainstorm Possible Ways to Retain Clients & Customers
When it comes to business, no matter the industry that you choose to pitch your tent in, one of the easiest ways to increase customer retention and perhaps attract new customers is to produce results and satisfy your customers always. If your customers are satisfied with your facility and service delivery, they can hardly source for alternative service providers.
One of the strategies that you need to employ in order to generate repeated sales from your customers and also to retain them is to ensure that your facility is on point, you always come up with new and attractive concept and your customer service does not fluctuate.
If your services and customer service fluctuate, you are likely going to struggle to get your customers retaining your services. Ensure that you offer your customers incentives if you want to retain them and of course continue to generate repeated sales from them and also to attract new customers.
Part of what you need to do to achieve this is to track progress, results or outputs with the aim of improving on them quickly as the case demands. When it comes to managing your customers and building a loyal clientele base, you should purchase a customized CRM software.
With a customized CRM system, you can easily stay in touch with your clients (you can carry out quick surveys, you can introduce new products and prices to them without any hitch, you can felicitate with them on their birthdays and other anniversaries, you can keep track of their progress, you can send bulk sms and customized e – mails and above all, you can easily receive compliant and feedback from them).
20. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
If you are in business and you are not conscious about boosting you brand awareness and communicating your corporate identity, then you should be ready to take on whatever the society portrays your business to be. One of the secrets of larger corporations is that they are willing to spend fortunes year in and year out to boost their brand and to continue to communicate their corporate identity the way they want people to perceive them to be.
No matter the industry you belong to, the truth is that the market is dynamic and it requires consistent brand awareness and boosting cum promotion to continue to appeal to your target market. Here are the platforms you can leverage on to boost your brand and create a corporate identity for your haunted house;
- Place adverts on both print (newspapers and entertainment magazines) and electronic media platforms
- Sponsor relevant community – based events
- Leverage on the internet and social media platforms like; Instagram, Facebook, Twitter, YouTube, Google + et al to promote your haunted house
- Install your billboards in strategic locations all around your city or state
- Engage in roadshows from time to time in targeted neighborhoods to create awareness of your haunted house
- Distribute your fliers and handbills in target areas
- List your haunted house business in local directories / yellow pages
- Advertise your haunted house in your official website and employ strategies that will help you pull traffic to the site
- Position our Flexi Banners at strategic positions in the location where your haunted house is located.
- Ensure that all your staff members wear your branded shirts and all your vehicles are branded with your company logo.