A dunk tank rental business is a business that makes available dunk tanks for people to rent and make use of. A dunk tank, which is also called a dunking booth or dunking machine, is an attraction mainly found at fairs, fundraisers, and parties. Basically, a dank tank consists of a large tank of water over which a volunteer sits on a collapsing seat. When a ball strikes a target, the seat collapses, “dunking” the person into the water.
Dunk tank rental business is a subset of the part supply rental industry and statistics have it that the industry in the United States of America is worth about $5 billion, with an estimated growth rate of 3.6 percent between 2016 and 2022. There are about 10,345 registered and licensed party rental businesses in the United States and they are responsible for employing about 45,159 people.
Steps on How to Start a Dunk Tank Rental Business
Table of Content
Conduct Market Research
The first step in the market research process for your dunk tank rental business is to develop market-based research questions in line with your overall business goal and objective. In this regard, you should source information that will help you maximize your business, help you know what your potential market will be looking for from a dunk tank rental business, and also help you operate your dunk tank rental business with less stress.
a. Who is the Target Market for Dunk Tank Rental Business?
If you are thinking of opening a dunk tank rental business, then you should make your target demographics all-encompassing especially clients who have residual income to spend on leisure. Those who pay hundreds of dollars for regular entertainment services will think little of paying for a new experience. It should include students, migrants, tourists, and every adult in the neighborhood where your dunk tank rental business will be located.
b. Is Dunk Tank Rental Business a Profitable Business?
Yes, the dunk tank rental business is profitable. Statistics show that on average, a dunk tank rental business with two tanks should net more than $100,000 a year assuming you have a steady clientele. Considering tanks only cost $2,400 a year to maintain after the initial purchase, you will start turning a profit (minus the costs of the space) in less than two years.
c. Are There Existing Niches in the Industry?
No, there are no existing niches when it comes to the dunk tank rental business because the business is a subset of the party rental industry.
d. Who are the Major Competitors?
- Arena Americas
- Bright Event Rentals
- Party Rental Ltd.
- American Family Day, Inc.
- Cowboy Party Rentals
- Splash Alert | Bounce USA LLC
- Dunking Booth Rentals – Arizona Bounce
- Party With 630
- Moon Bounce Galaxy
- Orlando Fun Party Rentals
- Miami Party Rentals
- Lone Star Parties
- Backyard Inflatables
- J And R Dunk Tank Rentals
- Supreme Inflatables and Party Rentals
- Shore Party Rentals
- Amazing Amusements and Entertainment Dunk Tanks
- Laff And Grin Amusements
- Sussex County Rental Center
- Nor Cal Party Rentals.
e. Are There County or State Regulations or Zoning Laws for Dunk Tank Rental Business?
No, there are no county or state regulations or zoning laws for dunk tank rental business, but players in this industry are expected to work with the existing regulations governing similar businesses in the county where their business is domiciled.
f. Is There a Franchise for Dunk Tank Rental Business?
Yes, there are franchise opportunities for dunk tank and party rental business, and here are some of them;
- Monkey Joe’s Parties & Play
- Pump It Up
- Party City
- Party Central Rental
- Bounce 2 The Moon
- Jump Zone.
g. What Do You Need to Start a Dunk Tank Rental Business?
- A Feasibility Report
- Business and Marketing Plans
- Business Licenses and Permits
- A Good facility
- Certificate of Occupancy (CO).
- EIN (Employer Identification Number)/Federal Tax ID Number.
- A Corporate Bank Account
- Commercial-Grade Float Tanks and Tank Maintenance tools and Supplies
- Startup Capital
Memorable Dunk Tank Rental Business Names
- Ponte Arena© Dunk Tank Rentals, Inc.
- Freedom Zone® Dunk Tank Rentals, LLC
- Deep Drums© Dunk Tank Rentals, Inc.
- Fun Solutions® Dunk Tank and Party Rentals, Inc.
- The Dome™ Dunk Tank and Party Rentals, Inc.
- Cally Coby™ Dunk Tank and Party Rentals, LLC.
- Zion Team© Dunk Tank Rentals, LLC
- Danny Blank® Dunk Tank and Party Rentals, Inc.
- Star Base© Dunk Tank and Party Rentals, Inc.
- Dallas Zone© Dunk Tank and Party Rentals, Inc.
- Scott Webb® Dunk Tank and Party Rentals, LLC
- Coast Line® Dunk Tank and Party Rentals, LLC
- Free World™ Dunk Tank and Party Rentals, LLC
- Mike Mills© Dunk Tank and Party Rentals, Inc.
- Ola’s Place® Dunk Tank and Party Rentals, Inc.
- Baseline™ Dunk Tank and Party Rentals, Inc.
- Red Tape™ Dunk Tank and Party Rentals, Inc.
- Connor Cloe© Dunk Tank and Party Rentals, Inc.
- Silver Ocean® Dunk Tank and Party Rentals, LLC
- Dinge Hills™ Dunk Tank and Party Rentals, Inc.
Register Your Business
a. What Type of Business Structure is Best for Dunk Tank Rental Business?
When it comes to the business structure of a dunk tank rental business, the one that most players in this line of business consider is an LLC. It is common to consider an LLC because providers want to protect themselves from lawsuits.
Please note that an LLC will need an EIN if it has employees or if it will be required to file any of the excise tax forms listed below.
b. Steps to Form an LLC
- Choose a Name for Your LLC.
- File Articles of Organization.
- Choose a registered agent.
- Decide on member vs. manager management.
- Create an LLC operating agreement.
- Comply with other tax and regulatory requirements.
- File annual reports.
c. What Type of License is Needed to Open a Dunk Tank Rental Business?
- General Business License
- Health and Safety Permit
- Zonal Permits
- Signage Permit
- Operational State Facility Inspections
d. What Type of Certification is Needed to Open a Dunk Tank Rental Business?
You don’t need any certifications to open a dunk tank rental business.
e. What Documents are Needed to Open a Dunk Tank Rental Business?
- Business and liability insurance
- Federal Tax Payer’s ID
- State Permit and Building Approval
- Certificate of Incorporation
- Certificate of Occupancy (CO).
- Business License
- Business Plan
- Employment Agreement (offer letters)
- Operating Agreement for LLCs
- Insurance Policy
- Contract Document
- Company Bylaws
- Memorandum of Understanding (MoU)
f. Do You Need a Trademark, Copyright, or Patent?
If you are considering starting a dunk tank rental business, usually you may not have any need to file for intellectual property protection or trademark. This is because the nature of the business makes it possible for you to successfully run it without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.
Cost Analysis and Budgeting
a. How Much Does It Cost to Start a Dunk Tank Rental Business?
The startup cost for a dunk tank rental business is not uniform as some factors can influence the cost. Factors such as soundproofing, waterproofing, commercial-grade dunk tanks, marketing, staffing, fixtures, supplies, and choice of location and facility.
But basically, a dunk tank rental business will cost from $25,000 – $250,000 to open and that can easily go higher depending on your overall business goals and objectives. Please note that buying a brand-new dunk tank will cost you around $4,000, for just one. You should also budget for a 500-gallon tank, a cage, the seat, balls, targets et al.
b. What are the Costs Involved in Starting a Dunk Tank Rental Business?
- The total fee for registering the business in the United States of America – is $750.
- Legal expenses for obtaining licenses and permits as well as accounting services totaling – $1,200.
- Marketing promotion expenses (2,000 flyers at $0.04 per copy) for the total amount of $80.
- The cost for hiring a business consultant (writing of business plans inclusive) – is $4,500.
- Insurance (general liability, workers’ compensation, and property-casualty) coverage at a total premium – $12,400.
- The cost of accounting software, CRM software, and Payroll Software – $1,500
- The cost for leasing a facility (long-term lease agreement) – is $135,600.
- The cost for facility remodeling and installations – $100,000.
- The cost for the purchase of commercial-grade dunk tanks and accessories: $80,000
- Other start-up expenses including stationery – $500
- Phone and utility deposits will cost – ($2,500)
- Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $50,000
- The cost for store equipment (cash register, security, ventilation, signage) – $3,150
- The cost for the purchase of office furniture and gadgets (Computers, Printers, Telephone, TVs, Sound System, tables and chairs et al) – $8,000.
- The cost of launching an official website – $600
- The cost of our opening party – $3,000
- Miscellaneous – $2,500
c. What Factors Determine the Cost of Opening a Dunk Tank Rental Business?
- The size of dunk tank rental business (number of commercial-grade dunk tanks to start the business with)
- The choice of location
- The required licenses and permits
- The type of facility
- The cost for branding, promotion, and marketing of the business
- The cost for furnishing and equipping the dunk tank rental facility
- The cost for insurance policy covers
- The cost for registering the business
- Source of your supplies and ongoing expenses
- Cost of recruiting and training your staff
- The cost for the purchase and customizing of uniforms
- The cost of the grand opening of the dunk tank rental business
d. Do You Need to Build a Facility? If YES, How Much Will It Cost?
It is not compulsory to build a new facility for your dunk tank rental business, but if you have the required finance, it will pay you to build your own facility. The truth is that building or reconstructing a facility will help you come up with a facility that will perfectly fit into your overall business goals.
e. What are the Ongoing Expenses of a Dunk Tank Rental Business?
- Supplies (portable water, cage, the seat, balls, targets, cleaning chemicals, disinfectants et al)
- Utility bills (internet subscriptions, phone bills, signage, et al)
- Salaries of employees
- Tank maintenance
- Marketing costs
f. What is the Average Salary of your Staff?
- Chief Executive Officer (Owner) – $45,000 Per Year
- Manager – $36,500 Per Year
- Accountant – $36,000 Per Year
- Marketing and Sales Officer – $35,000 Per Year
- Customer Service Officer (Receptionist) – $26,100 Per Year
- Drivers and Installers – $26,000 Per Year.
g. How Do You Get Funding to Start a Dunk Tank Rental 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 a loan from your bank/banks
- Source for soft loans from your family members and friends.
Write a Business Plan
a. Executive Summary
Our dunk tank rental business will be located in a fast-growing community in Los Angeles, California. We have been able to secure a ten-year lease of a facility within the city’s largest family entertainment hub. We are fortunate to secure a facility that has an option of renewal for 10 years at a favorable rate.
Our dunk tank rental business is designed to meet both the health and safety standards as recommended by the local authority. Our customers are going to be given excellent customer care at all times. We have made provision for other party rental offerings that will be to the delight of our highly esteemed customers.
b. Products and Service
- Rental of different sizes and types of dunk tanks
- Party supplies rentals
- Sale of related dunk tank accessories and supplies.
c. Mission Statement
Our mission is to establish a dunk tank rental business that will make available reliable and trusted dunk tanks in the United States.
Our vision is to establish a standard dunk tank rental business in San Jose, California that will be the leader in the dunk tanks cum party supply rental industry in the United States of America.
d. Goals and Objectives
The goals and objectives of a dunk tank rental business are to make available different sizes and types of dunk tanks for people and organizations to rent to provide hours of fun with a splash.
e. Organizational Structure
- Chief Executive Officer (Owner)
- Marketing and Sales Officer
- Customer Service Officer (Receptionist)
- Drivers and Installer.
a. SWOT Analysis
- Experienced business owner and managing director
- The owner is an expert in the party rental industry
- Existing clientele
- Pro-active marketing plan in place
- The emerging dunk tank rental industry is growing exponentially
- The owner is customer-oriented
- The owner has the support and guidance of existing event organizers in town.
- Not enough clientele to run at full capacity immediately
- The owner is new to large scale marketing
- We will need a loan to buy the latest dunk tanks
- The owner is currently running the business solo.
- It will take at least 1 year to gain the experience to run the dunk tank rental business optimally.
- Dunk tanks are a timeless classic carnival attraction and a guaranteed crowd-pleaser
- Now is an ideal time to join the dunk tank rental business which has been increasing public awareness through mass media.
- Build upon existing clientele
- Dunk tanks are a perfect addition to community festivals, corporate, school, and church events
- Product sales increase revenue
- Provide an exceptional experience that is not found elsewhere.
- Industry growth could decline
- Loans diminish profitability until they are paid off
- The first year will be financially tight while we gain customers and pay off loans
- Competition in the area could increase
- Management of employees requires time, money, and efforts
- The county’s health department could change its regulatory status and decide to regulate dunk tanks.
b. How Do Dunk Tank Rental Businesses Make Money?
Dunk tank rental businesses make money by charging clients for renting the tanks.
c. Payment Options
- Payment via bank transfer
- Payment with cash
- Payment via credit cards
- Payment via online bank transfer
- Payment via check
- Payment via mobile money transfer
d. Sales & Advertising Strategies
- Introduce your dunk tank rental business by sending introductory letters alongside your brochure to households, and other key stakeholders throughout the city where your dunk tank rental business is located.
- Advertise on the internet on blogs and forums, and also on social media like Twitter, Facebook, LinkedIn to get your message across
- Create a basic website for your business to give your business an online presence
- Directly market your services and products.
- Print out fliers and business cards and strategically drop them in offices, libraries, public facilities train stations et al.
- Use friends and family to spread the word about your dunk tank rental business
- Post information about your dunk tank rental business on bulletin boards in places like tattoo salons, schools, libraries, and local coffee shops.
- Place a small or classified advertisement in the newspaper, or local publication about your dunk tank rental business
- Advertise your dunk tank rental business in relevant entertainment magazines, newspapers, TV, and radio stations.
- Provide discount days for your customers
- List your business on yellow pages ads (local directories)
a. How Much Should You Charge for your Product/Service?
Most dunk tank rental businesses charge over a dollar a minute, generally in increments of 30-, 60-, or 90-minutes sessions. Intro sessions may be given at a far reduced rate, such as $100 for two 60-minute sessions.
b. How Much Profit Do Dunk Tank Rental Business Owners Make a Year?
It depends, but available reports show that on average, a store with two tanks should net more than $100,000 a year assuming they have a steady clientele. Considering tanks only cost $2,400 a year to maintain after the initial purchase, you will start making a profit (minus the cost of the space) in less than two years.
c. What Factors Determine the Amount of Profit to Be Made?
- The capacity of the dunk tank rental business
- The types of related party rental services and products offerings
- The location the dunk tank rental business is covering
- The management style of the dunk tank rental business
- The business approach of the dunk tank rental business
- The advertising and marketing strategies adopted by the dunk tank rental business.
- The number of years the dunk tank rental business is in business
d. What is the Profit Margin of a Dunk Tank Rental Business?
The profit margin of a dunk tank rental business is not fixed. It could range from 55 percent to 85 percent depending on the duration of the session.
e. What is the Sales Forecast?
Below is the sales forecast of a dunk tank rental business. It is based on the location of the business and other factors as it relates to such startups in the United States;
- First Fiscal Year: $320,000
- Second Fiscal Year: $580,000
- Third Fiscal Year: $1.15 million
Set Up your Office
a. How Do You Choose a Perfect Location for Dunk Tank Rental Business?
- The demography of the location especially as it relates to people that spend on leisure services
- The demand for dunk tank rentals in the location
- The purchasing power of businesses and the residents of the location
- Accessibility of the location
- The number of dunk tank rental businesses, and family entertainment centers in the location
- The local laws and regulations in the community/state
- Traffic, parking and security et al
b. What State and City are Best to Open a Dunk Tank Rental Business?
- Fort Oglethorpe, Georgia
- Buffalo, New York
- Denver, Colorado
- San Antonio, Texas
- Greenville, South Carolina
- Los Angeles, California
- Brattleboro, Vermont
- Palm Beach, Florida
- Silver Spring, Maryland
- Rowland Heights, California
- Green Bay, Wisconsin
- Dallas, Texas
c. What Equipment is Needed to Operate a Dunk Tank Rental Business?
You would need commercial-grade dunk tanks, dunk tank maintenance tools, accessories, receipt issuing machines, sound systems (For playing music), Point of Sale Machines (POS Machines), CCTV Cameras, and Flat Screen TVs. You will also need computers or/and laptops, internet facility, telephone, fax machine and office furniture (chairs, tables, and shelves) amongst others and all these can be gotten as fairly used.
When it comes to hiring employees for a standard dunk tank rental business, you should make plans to hire a competent chief executive officer (owner), manager, accountant, marketing and sales officer, driver and installers, and customer service officer.
Launch the Business Proper
In recent times, no dunk tank rental business opens its door for business without first organizing an opening party to officially launch the business. You can choose to do a soft opening if you are operating on a low budget or you can go for a grand opening party.
The bottom line is that with a proper launching of the dunk tank rental business, you will be able to officially inform people in your city that your dunk tank rental is open for business.
a. What Makes a Dunk Tank Rental Business Successful?
- Choose a good location and facility to launch the business
- Adding additional relaxation services can help turn your business into a full-service family entertainment hub. Consider adding party rental and massage or sauna services to round out the client’s day of relaxation
- Throw an open house grand party before officially opening the business
- Be deliberate with your marketing sales approach
- Encourage the use of word of mouth to promote your dunk tank rental business
- Leverage on all available online and offline platforms to promote your dunk tank rental business
b. What Happens During a Typical Day at a Dunk Tank Rental Business?
- The facility is open for the day’s work
- Customer requests are taken and they are scheduled or attended to
- Tank maintenance
- Marketing/website upkeep
- Supply ordering
- Administrative duties
- The business is closed for the day.
c. What Skills and Experience Do You Need to Build a Dunk Tank Rental Business?
- Customer services skills
- General computer, internet, email experience
- Interpersonal skill
- Accounting and bookkeeping skills
- Business management skills
- Bargaining skill
- Work experience in a party rental environment or family entertainment company
- Experience in managing people
- Experience in business administration
- Experience in handling spa and message therapy and related services.