I would be surprised if the majority of people in this industry started with $350,000.00 or more budgets, but I certainly agree that would be a great amount to have! Actually, if I had that much, I think I would RETIRE! But then again, I'm not in a major metro-area. In a giant city, you would need a giant budget.
But one of the neat things about haunted houses (in typical towns) is that you can start out small and GROW over time. I actually prefer the haunts that do not use all Industry standard props, but instead, build their own home-made variety (provided they are good). I loved the Scare Factory stuff the first several times I saw it, but by the sixth time, it no longer surprises me any more. And when all the expensive haunts have the same props and exact same air controlled tricks, it gets predictable. So in some instances, the smaller haunts with originality and creativity can still out preform the deep pocket haunts because they are different.
This is just my personal opinion, mind you, and I understand others might feel differently. I saw a very professional haunt designed for $120,000.00, a big one that was 12,000 square feet in size. It was pretty darn good. Across town, we started our meager 6,000 square foot one for just $6,000.00 ($500 of which paid for the temporary rent for the closed resteraunt building). We grew in three years until they sold the building and tore it down... then we took over the 12,000 square foot haunt that went bankrupt because they couldn't make back their $120,000.00! So I know there are oppertunities to start out small and still improve over time. Because haunts are one of the few businesses where ideas and effort can still trump assets.
That being said, I thought the first advice given on this thread was also valid: Before investing a lot of money, get involved with other haunts and learn everything you can. You can save yourself a lot of grief learning from other people's mistakes. The how-to-haunt books are also helpful, though reading several is better than just relying on one, and none of them make up for pratical experience. I'm not saying you can't make it work by just jumping into it, because that's what I basically did, but I didn't have other local haunts to help at that time.
I remember reading advice somewhere to try to save as much money as possible by using used materials and recycle everything. That seemed like simplistic advice, but I also think it was correct. We dumpster dive the theater's stage building department's trash all the time to find useable lumber, and we reuse nails, and get used drywall (sligtly busted) donated to us--- anything to keep the Home Depot bill down, and that can be hundreds if not thousands of dollars "earned" each season. I'm sure I'm not the only haunt guy who frequents the Goodwills and Pawn shops as often as I consult the prop catalogs. Haunted props are expensive, usually two or three times more than they seem worth! But I realize it is a small market and they don't have the volume to make back their investments. (Still, I suspect many of them cater more to the deep pocket Amusement park operators and the like, because I would rather pay someone $6 an hour to jump up out of the chair than pay a vender $2,000 for an air controlled dumby to do the same thing. Granted, they don't need bathroom breaks, but still!)
But all those big budgets certainly have their place. Truth is, I'll go to and enjoy about ANY haunted house, big or small. I certainy have a special appreciation for the underdogs though. And as far as advertising goes, I DREAM of the day I can spend tens of thousands on it, but in the meantime, the internet is a Godsend for cheap advertising, as is YouTube (allowing you to host your own internet video ad), and those cheap flyers that you can leave at costume shops and the like. (And don't forget the posters, xeroxed if you have to!) And getting free newspaper coverage is VERY helpful. (You usually need some sort of angle though, like a new technology or special charity cause.) People trust the articles far more than they do the ads (though if knew how flawed the reporters often are... but I digress.)
Our best advertising is the return customers who bring in new blood each season. About 6 to 7 out of ten of our costumers are returns. Unfortunately, you don't get many of those your first year!
Anyway, those are just some thoughts, free comments worth what you paid for them.