View Full Version : Acquiring Funds

Front Yard Fright
11-01-2012, 04:31 PM
Now that Halloween season is done and over, I'm now more than ever motivated to look into the possibility of getting a show up and going for the 2013 season. I've got six years of experience in running my home haunt which saw an average attendance of around 600 patrons a year, our busiest year having almost 1,000. Not a huge number (compared to other areas of the US) but quite the draw for a town of my size. (About 10,000) There are a few haunts in my area that I'd say average around 3-5K patrons a season charging $10-$13 a ticket. There's a population density of nearly 100K people within 20 minutes of my town.

The haunts in my area are OK for what they are, but patrons in this market are unaware of the amazing things going on in this industry. Our market here is stuck in the 80's-90's style haunts with black walls, checkerboard rooms, and fire engine red paint for blood. Don't get me wrong, it works for our area... But I want to bring so much more to the table. I've spent the past two years networking with owners and operators of haunts across the US learning tons of valuable information to use towards opening my own show. I've also done some networking locally in regards to potential sponsorships later on down the road. In short, this place is a gold mine. Given the right resources, I believe I could do amazing things for the Iowa haunt industry.

With that said, I can have all the knowledge in the world, with the best crew and the best sponsors... But it all comes back to funds. Obviously this is a huge obstacle for most haunts (If not the biggest) to deal with. However the more haunters I talk to, it sounds like it's nearly 75% luck as far as finding buildings/investors to help with their business venture. I'm just wondering if this is the norm for most? It certainly seems like it, but I know there's got to be guys out there that find different ways of getting started.

My thinking being gather a group of core sponsors that would be the initial investors to get going our first year. Larger companies like Coke, Monster, possibly local car dealerships, that could afford to invest a chunk of change in order to get the ball rolling. They'd obviously be reimbursed with marketing/tickets/ and other promotions. I was also thinking to have different "tiers" of sponsors that would get different benefits depending on how much they invested.

In all, I feel like it'd be my best bet to get things going financially... I'm just apprehensive that these people will actually be willing to donate much more than a couple hundred bucks.

What are you thoughts? Is it out of line to ask for a large chunk of money out front? Is there a different way of getting financing aside from actually taking out a business loan? What are your previous experiences?

Allen H
11-01-2012, 11:43 PM
My advice is to start small. As small as you can afford. Do try to get some sponsors,but you will get a lot of No's so dont put so much energy into that that you get discouraged.
What kills me is that haunted houses started as a fundraiser for many groups, and now people think they need raise money to do a haunted house. Start small, allow your first year to fund your second year, and your third year to fund your fourth. If you are lucky then by year five you can haunt full time making a smooth $30,000 a year for yourself as well as funding the haunt. Im not harping on you at all- you are awesome. start small, ask to haunt a floor of a parking garage, ask a land owner to make a trail in his woods splitting profits, ask a farm to let you build a haunt behind their farm stand.
Allen H

11-02-2012, 05:21 AM
Haunting full time earning 30k a year? That won't pay the rent in Virginia for the year.


Allen H
11-02-2012, 09:09 AM
Darkangel, you are right, maybe by year 10 it will sustain someone full time. That was my point.

11-02-2012, 09:44 AM
My advice is to start small. As small as you can afford. Do try to get some sponsors,but you will get a lot of No's so dont put so much energy into that that you get discouraged.
What kills me is that haunted houses started as a fundraiser for many groups, and now people think they need raise money to do a haunted house. Start small, allow your first year to fund your second year, and your third year to fund your fourth. If you are lucky then by year five you can haunt full time making a smooth $30,000 a year for yourself as well as funding the haunt. Im not harping on you at all- you are awesome. start small, ask to haunt a floor of a parking garage, ask a land owner to make a trail in his woods splitting profits, ask a farm to let you build a haunt behind their farm stand.
Allen H

Great advise Allen! Thanks! I too am looking to move out of my home haunt and into something bigger. Not by next year, but within the next 2 or 3. I have a lot invested in props, lighting, etc... but my biggest obsticle will be obtaining a perminate location. Once that is done, I will keep it growing year to year, with a small start that I can afford.

Front Yard Fright
11-02-2012, 01:21 PM
No worries Allen. I fully plan on starting small. But even a small haunt could cost 10K if not more. Just trying to figure out how to get there being a one man band.

Greg Chrise
11-02-2012, 06:28 PM
With no money the next level is not a permanent location and a loan, it is use your resources to make some money. So you "rent" your services to charities and corporate gatherings or rather large corporate parties. You set up in places that are already temporary in nature like fair grounds or large flea market lots. Or you get a trail outdoors with a land owner being your partner and risk destroying all of the props you have just to make the money you need.

You make things and sell them to other haunts. You decorate bars and restaraunts for Halloween or parties at large rooms in Hotels. You find an abandoned building and figure out how you can use it to help a charity. You find a haunted charity that is lame and pump them up to the next level with your skills and props for a percentage of the door.

Small businesses generally don't just keep getting loans over and over to stay in business. They have to make money. And so you set off with the notion that small makes money, limited money but slightly positive in cash flow. If that is too slow, you have a good job or regular business and embezzle your own money to buy materials. If you have your own company or service you can also squander helpers on payroll doing something other than what they are supposed to be doing. Being out and about you may run into that person that has a building or land and just wants to make enough to pay the taxes per year.

You just want to keep growing and pay for the storage on the more crap you accumulate. Instead of shopping at home depot, you shop on craigslist and flea markets. You make things instead of buy things. You get sponsors to get you over the hump of having insurance on the event and paying the utility bills, feeding the actors.

So if all of this can be done creatively with no resources, why are we spending $150,000 to have your first attraction see 800 to 4,000 people? Like what is the Return on Investment here? Get into a gig where you are the second attraction or 10th attraction somewhere and there is no rent only cash flow when the tickets are sold. Instead of a whole haunt be a side show in the midway of a larger or more established haunt.

There are people that will "invest" or loan money with high returns expected. It does not help either party. The start up guy is back to borrowing money every year and rarely gets clear of debt and the stupid helpful investor lost all the money they grabbed at a high rate by being pushed into the next tax bracket. So why do that? Eventually the loan people stop and figure out they are losing money or the haunt guy can't pay things back and has to sell off something or just outright close. Or years down the road some official closes it for not having something and everyone is screwed money wise. That 20% or 40% you can get from a loan shark is the money you were trying to get all along so just never give it up. Or if you do pay that much out and there is nothing left at least it went to payroll or maintenance and storage or moving expenses so you can do it all again.

When you somehow get $20,000 you don't know what to do with, then you get a permanent lease or buy a couple acres somewhere.

Even if you just act in a haunted house, do makeup and costumes or set design you have more chances of profiting $10 a day. There is no such thing as bankruptcy for something you are going to be doing for the next 20 or 30 years. It is much better to have earned your way. Then it is all yours.

For everything on the list that you need, there is a creative way around it where you can earn, barter, trade or use for free. You don't spend money until you make money and you spend it wisely.

Greg Chrise
11-02-2012, 06:33 PM
Also don't live in a state where $30,000 is not enough to make it. Live in a state where you can live like a king on $20,000 a year. You don't have to work as hard and be all bitchy and stuff.

11-02-2012, 08:17 PM
As I too have been attempting to get going you're kinda on your own until you're big enough for people to take notice.

Greg Chrise
11-03-2012, 11:31 AM
It may take a few years to accumute what you need, get it painted, destressed or otherwise modified to fit your theme. You buy things for $2, $5, even go nuts on occasion and buy things for $150 a pop and complete each item as you can. You make your own masks and costumes and buy appropriate things when the halloween stores have clearence sales where things are 50% or 80% off. Get yourself set up to indeed buy things at whole sale prices, sell some eat the rest.

SO over time, you just created a savings account of precieved values of all this inventory. You build it in such a way that if someone was to walk in with cash you could sell it outright and make your wages you invested even if you never had a single day with an open pro haunt. On occasion you have spent too much, gone in the whole and might sell a few things just to get some money. Then you make more and aquire more to make up for it.

If you make things, you might only spend $30 to complete something in materials but if you were to buy it even at those special prices it might be a $100 item. So you just saved up $100 value.

Everyone says to treat it like a business and you won't profit for 10 years. That's all yuppy talk. You are building equity. If you buy a couple used peices of plywood for $5 a piece and they retail at $12 you just saved or made $7 by pulling nails or filling holes. You might not see that $7 for a while but if you keep track of your invested value, you know what everything is worth. If someone thinks they are going to be your partner later in the game, they really need to match that kind of value, not just because they have $1000 when you need it or promise to do something or their father knows some guy. You have to be matched dollar per dollar. So you are into equity claims and positioning of return on investment based off of what is called sweat equity. You have taken $500 in junk and $500 in assorted materials and made something that has an end value of $10,000 to $25,000.

Once you have this resource that no one can quickly match just by buying crap, you are the man. YOu have a place in the world and finding partners that have also $25,000 to pay rent for a year up front or $25,000 in varified advertising, then they can be a partner, otherwise they have no idea how tough it is to make that much money or create so much stuff and sorry, you have to decline their offer. You have to stand up for your actual value in stuff.

If you rent out a mask or costume, you might really only have $20 into it but if if gets destroyed or lost, the value is $100. You either rent it for $40 a day or sell it outright for $100. The more skills the more something can be worth like an $800 costume or a $5,000 costume. Of course anyone can make something but can you actually sell or rent it becomes a subjective experiment out in the real world.

The only part of treating it like a business is knowing your parts and products, how much it is actually worth, how much you have actually invested in time and effort and materials value. Then you are already broke even. The thing is sitting right there and isn't costing some monthly payment beyond maybe a storage bill. And that storage you need to be clever about too. You could end up with thousands in storage and less than that in actual value and you just cut your end income payday down by 50%. For me the big thing is where am I going to keep this crap and how much does that cost. Or if I'm displacing floor space in my other business warehouses, is that costing money or impacting my ability to make money normally?

Instead of having an iphone you have decided to spend $100 a month on making things. Get a pay as you go phone for $8 a month. You drive used cars that are paid for and repair them yourself. This realignment of money makes buying and making things possible even in a poor economy. You knock out some hobbies like buying $7.50 magazines and $12 records. You sparingly go to movies and cut back on monthly charges to sit and watch TV when you should be making things.

Making things becomes theraputic and a total diversion to the rest of the world sucks and you can't make any money. Meanwhile you are tinkering away making money in a way. Maybe you have to for inspiration, go to other haunted houses and travel to conventions but, at some point you are going to have to stop spending $800 to travel and lodge and have a beer, see things you can't afford, and get busy at home. You can always just get on Hauntworld an annoy everyone.

Greg Chrise
11-03-2012, 01:44 PM
The other low budget realization you have to develop is that there is no haunt until there is a haunt. I see people all the time renting a building and trying to get designs approved and then somehow the whole thing is going to get built out in a month and be open. It can be done but in the pay as you go format you build the thing and have the designs and everything is close to being built and planned for, then you go for the building or location. It isn't a long drawn out drama episode of not going to make it or spending $18,000 in non refundable rent or anything stupid.

I see a level of stupidity all the time that somehow the local officials are supposed to jump around for you and provide because you might have paid $100 in taxes your whole life and there is this imaginary thing called a "budget". You either have it or you don't. The other thing that makes me just want to rip off my own appendiges and beat myself with them is the word "business plan". The plan is, you go to work and you get paid. Anything beyond that is bullshit. Or it is a big indicator of someone who is about to spend 3 years in failure mode no matter how much money they have. Much of what has to be done to build a good event is tremendously labor intensive or time consuming. You can jump up in September and totally assemble and detail things and get it on TV, I have done it but, the results might be lack luster. Ten years ago the market would totally dig what ever you provided.

If you aren't strapped by some imaginery schedule and an overhead you can come up with the things you really need to have like larger props, facades, better costumes, even if you do have to make them yourself. So there are two camps, the I have $200,000 and good credit and the I have no money and I'm opening in 2013 and need input for a business plan. Page one, you are doing it wrong. I'm watching all kinds of people spend $200,000 per year and move back in with relatives. In those situations you can't even be short a few thousand dollars and not get screwed. But, if you have managed the building costs, easy because they were done with no money, consider it managed, then any thing even $20 coming in the door is money to spit among every party that did something that night if need be.

11-05-2012, 11:52 AM
Just to recap what has already been said, start small and get creative. I opened up by moving my home haunt into a campground that offered up a building. Every year got bigger and bigger and bigger, until now we are running it over several weekends as part of a camping destination (and open to the public as well). I have been able to embezzle from myself and purchase some key props and effects over the years as a long term investment that I know will pay off eventually - and we are already starting to see the road to profitability sooner rather than later!

I am already full of ideas for next year and my sponsor/partner (the campground owner) is getting excited as well because their numbers have gradually increased during a time when they are usually dormant. I would have never thought about a campground, but we began thinking out of the box and here we are!