AIRCO is Gearing Up!

AIRCO Town Hall Meeting Recap

Thanks to everyone who attended our first Town Hall meeting in the AIRCO chat room! At the peak we had about 25 or so attendees and some really good questions asked. The following is a transcript of the prepared part of the meeting:

Mike Reigel, Rent-Fun

Thanks everyone for coming to our town hall meeting! We have quite a few people here, so to manage things and keep em moving, if you have a comment or a question, please type a * to let us know and wait until you are recognized to respond. While waiting, you can go ahead and type your comment so it's ready to go.

SO, if you have something to add, type a * and we'll call on you. Don't worry, we'll get to everyone!

Thanks again for coming! I'm Mike Reigel, aka Rent Fun and I'm on the Board of Directors for AIRCO. I'm going to start out by telling you how AIRCO is structured and who's driving this boat!

There are 4 directors (also known as committee chairpersons) and an executive director.

Scottie: Executive Director
The Moonwalk Guy: Committee Chair - Research and Education
Rent Fun: Committee Chair - Safety and Regulatory Issues
BAJ: Committee Chair - Communications and Vendor Relations
Partywright: Commitee Chair- Industry Promotion, Marketing and Recruitment


We are going to post on the site details and guides on safe setups and takedowns as well as an overview of the staking requirements by state and stay on top of proposed regulation. We will be asking members to be a contact point for their state and keep us up to date on what's going on there.

Now, I'll pass things over to Robert Whitsell (BAJ), chair of Communications and Vendor Relations

Robert Whitsell, Bounce Around Jax (BAJ)

Hi, I'm Robert (also known as BAJ) and I'm looking forward to the communications and vendor relations area. We will be putting out a monthly newsletter for anyone to read (members and non-members) and also a private newsletter for members only. The public newsletter will have marketing ideas and industry news while the private newsletter will have special deals for members, what's going on in AIRCO, and a few other features reserved for members.

On the Vendor Relations side, we are looking for vendors to sponsor AIRCO, not only from an advertising standpoint (which pays the light bills) but also to get actively involved. A safer industry benefits all of us and insurance and regulations are directly tied to percieved safety. We are looking forward to getting the big and small players involved, and hopefully exposing you to some smaller business opporutnities you may not yet be aware of.

I'm going to turn things over now to Harold, on the Research and Education committee.

Harold Fisher, The Moonwalk Guy, was unable to access the chat- the following was related by BAJ

What we are planning on the research and education committee starts out with the membership application. We'll be asking for some detailed information, but it won't be tied back to your company. This information will help us to start benchmarking the health of our industry, the growth, the profitability, and the safety as you'll be asked to fill it in every year to renew your membership. This will go a long way toward our goal of becoming self-insured,so that we aren't at the whims of the general underwriters.

We are going to continue to add articles and papers to the site on training and best practices, as well as keep you informed of training opportunities around the country. By educating as many rental company operators as possible, we should be able to reduce the incidents of accidents or other issues that give our industry a black eye.

I'm going to turn things over to Scottie now, since AJ couldn't be here tonight:

Scottie Claiborne, AIRCO Director

Thanks! I'm Scottie although I am playing the role of AJ (Partywright) tonight. On the Industry Promotion, Marketing, and Recruitment committee, we have a LOT going on. We have signed a contract for a monthly major news release with a public relations company- we'll be doing a public release every month to make the general public aware of AIRCO, our goals and our missions. We want people who are looking for an inflatable company to see that AIRCO logo and understand that that member company is committed to safety, cleanliness, and customer service. This is what will help set our members apart in their markets.

We are also working on a direct mailing to go out this month to attract additional members to our organization. The membership is critical because we will need a large number of active participants if we are going to be able to pull off a self-insured plan- it is going to take us a while to get there, but I know we can do it.

We will have an AIRCO logo you can place on your website when you become a member- this will link to a page explaining how AIRCO membership means you are committed to safety and professionalism and hopefully, it will give you an edge in gaining market share.

In general news, we are getting close to our launch date of May 15! The registration system is working but I am having a few bugs with the survey- it should all be fixed by the time we are ready to go. We will also be adding a ton of new information to the site in the next week or so and continue to improve the site every month. Let us know what YOU need and we'll work on it.

As a little preview, we are launching a Vendor Directory this weeked. If you'd like to take a look at it, you can access it at http://www.a-irco.org/forum/index.php?act=links.

We are building the most comprehensive listing of related inflatable business links on the net, so if you have something you'd like to see added, just send a PM to any of the moderators and they can add it for you.

Follow up questions were (paraphrased):

Q: Does insurance have to be A-Rated or can it be surplus insurance?
A: At this point, insurance is insurance regardless of the underwriter. We may take another look at that in the future though.

Q: How will you verify that members have insurance and that they don't drop it?
A: We will be checking with the insurance company to verify. If they drop their insurance, they will have a hard time getting any next year and membership will have to be reverified every year. As an add-on note, we will require AIRCO to be named as an additional insured on the insurance certification. This should not have an associated cost, and we will be notified in the event of a lapse in insurance.

Q: How much does it cost to join?
A: It's free. You just need to fill out the survey and arrange for the additional insured with your insurance company.

New Game Pumps Up the Fun

Product Profile- Pitchburst's New Boom Blaster Game

By Mike Reigel

From the makers of Pitchburst comes an exciting new game that will not only pump up the fun, but also your profits!

The Boom Blaster, from Whirlwhims, LLC, is a speed-pumpin', balloon bustin' challenge game. The game consists of two parts, a "Boom Tower" and a "Boom Detonator Box", which are easily connected by an air hose. A balloon is fitted over a nozzle on the Boom Tower and players pump the handle on the Detonator Box to inflate the balloon. As the balloon grows in size it presses against "Bursting Teeth" until it pops. The first player to burst their balloon is the winner.

The Boom Blaster is very portable and can easily be setup in under a minute. With it's bright red paint and colorful graphics the Boom Blaster will surely draw attention. A minimum of two Boom Blasters are needed for head to head competition. Six to eight Boom Blasters would make an awesome game for those larger events!

The Boom Blaster is in production now and will start shipping the beginning of June. The first production run is very limited, so don't wait too long to order. The regular price for Boom Blaster is $429. There is an introductory offer until May 31st that will save you $40 per unit. Quantity discounts are also available. Expected rental rates for a pair of Boom Blasters range from $80 to $150 so there's a quick return on investment.

The Boom Blaster is bound to be this years hottest new game. For more information, visit www.boom-blaster.com.

Moms Makin' It Work!

Member Profile- Life of the Party's Heidi Schulz

By Harold Fisher

Welcome to the AIRCO Member Profile. Every issue we will try to spotlight an AIRCO member, how they got into the business and their views on the industry. In this edition we interviewed Heidi Schulz with Life of the Party Rentals in Wisconsin.

AIRCO: You're a single mom with how many children?
Heidi: I am a single mother of 2 children, my son Jeremy is 14 years old, and my daughter Katelyn is 5.

AIRCO: Do you do this by yourself?
Heidi: I run the business entirely by myself, but now that my inventory has expanded and I ordered some bigger, heavier pieces, my son helps me out with deliveries. He loves the business, and all his friends are jealous because of his "job".

AIRCO: Why did you start the business?
Heidi: For years I rented moonwalks for my son's birthday parties and other family events. Our rentals consisted of borrowing a truck, going to the rental place and picking up the inflatable, and then taking it home and trying to figure out what to do with it next. The next day we would have to load it back up and return it to the rental place. When I think about it now, I realize how dangerous the situation was because we didn't stake the bouncers that we rented, mostly because we didn't receive any instructions from the rental place on how to do this. My decision was to provide a service to people wanting to rent an inflatable, but to focus on safety and cleanliness, and take the stress away from the party-giver by delivering and setting up the inflatables for them.

AIRCO: How long have you been in the business?
Heidi: I began researching inflatable manufacturers, looking through piles of catalogs and was overwhelmed by the variety of inflatables that there is to choose from. I found David Drew and Hullabaloo and after lots of e-mails back and forth and phone conversations, I ordered my first moonwalk in September of 2003. Anyone in this industry knows how exciting it is to receive your first moonwalk so I spent that winter passing out flyers, business cards and researching what I wanted to buy next. While many people in the industry have had trouble with insurance, I am lucky to be in a state that Friedman's covers, and working with Scott DeSousa has been a pleasant experience.

AIRCO: How many units do you have?
Heidi: I have added a lot to my inventory since that first moonwalk, I now have 3 moonwalks, inflatable hoops, monster basketball, frame games, cornhole, Pitchburst, a sno-cone machine, undersea adventure air maze, and recently added a 5-in-1 combo, laddergolf and will be getting the new Boom Blasters in June.

AIRCO: Who is your target market?
Heidi: I do mostly back yard parties, but have also done fundraisers and pay-per-plays for various groups in the area. One of the greatest rewards of this business is seeing the kid's eyes light up when you turn the blower on and the moonwalk inflates! The only problem then is getting them to be patient while you stake it down and clean it!!!

AIRCO: In your opinion is your state regulated too little or over regulated?
Heidi: I feel there is not enough regulation by the state, businesses such as this should be required to carry insurance and follow safety procedures. Around my area most of the other companies are rental places where people pick the inflatables up and set them up themselves. Just knowing this scares me, because I know when we rented in years past we didn't stake or secure the moonwalk properly.

AIRCO: If you had to do it all over again would you still have gotten into the business?
Heidi: This is a great business to be in, and I really enjoy it. If I had it to do all over again would I? Well, that's a difficult question...while I love what I do, it's allot of hard work, and a big investment of money and time. I think I provide a great service with quality equipment and great customer service. Overall, I love it and hope to be in this for a long time, doing bigger and better things.

Business at What Cost? The Rental Rate Spiral

By Scottie Claiborne

New businesses starting out often think the key to breaking into a saturated market is to undercut the competition. They reason that they can quickly take price-concious consumers away from existing business and pretty soon, they'll be able to quit their day jobs and rent moonwalks full time.

This theory just doesn't work out well for anyone. Why not?

Undercutting prices in your market may gain some business in the short term, but you'll find that someone else will come along and undercut YOU. There are always people who see the short term gain without thinking about how they are impacting the market or even their own bottom line. All that happens is that the value of a bouncer rental is lowered for everyone and clients become resistant to paying a reasonable rate.

How Much is a Bounce Rental Worth?

Every marketing student knows the value of an object is what the market is willing to pay. As the supply of moonwalks in an area increases, to a certain extent, it creates more business- up to a point. When the market becomes oversaturated, all businesses lose as newcomers attempt to grab market share by undercutting the market prices.

When Competition is a Good Thing

Anyone who has established a bouncer business in a brand new market knows that it's slow to start. Parents aren't used to thinking of moonwalk rentals for birthday parties; schools, churches, and corporations aren't used to renting them for fundraisers, festivals, or corporate picnics. It takes a lot of exposure to maximize the potential of the inflatable business in a new market.

Reasonable amounts of competition help to raise awareness of inflatable rental through the entire market. As the demand for moonwalks increases, it's good to have a few other companies to trade rental referrals. As long as prices stay fairly level and the companies have something different to offer (or the same highly demanded items) competitors rarely put each other out of business. Most markets can support a large number of competitors without eroding rental rates at all.

When Competition Ruins the Market

The problems start when supply starts to exceed demand. When the market is totally maxed out; bouncers can be seen in every neighborhood and at every church function on a regular basis and there aren't many new avenues to explore, people continue to get into the business at an even higher rate as they are exposed to inflatables and see how "easy" it is.

Prices for equipment continue to fall dramatically. Insurance rates are sky high, but many operators don't bother to purchase insurance. There are very few requirements or limitations on bouncers in most states at this time. For under $5000, a new business can be off and running.

Because most new businesses need a "hook" to start building clientele, they find out their competitor's prices and set their fees lower. It starts a spiral effect when existing companies see their business eroding and lower their prices too.

Why Aren't Lower Prices a Good Thing?

When you sell moonwalk rentals, you aren't selling the value of the bounce. You are selling a SERVICE. The time it takes you to answer and return phone calls all week long, prepare paperwork, clean and maintain your equipment, plus delivery, setup, and takedown time. Does $60-$80 seem like a fair amount of money for all that time?

Add onto that vehicle maintenance costs and gas, cleaning supplies, replacement parts (extension cords, stakes, etc) as well as paper, ink and postage if you mail paperwork.

If you are a conscientious business, you also pay for insurance, taxes, and possibly annual or regular inspections. There are marketing and storage costs and you may even have a vehicle purchased specifically for the business.

When you book more rentals, your fixed costs stay the same. When you lower your prices, your fixed costs are still the same. You are working as hard as ever, but making less for your effort. If you love the business and do it as a hobby, then lower rental fees won't concern you. You can spend hours and hours doing what you love and put a little in the bank.

But if you actually want to earn an income renting inflatables, you need to have a realistic idea of the amount of time, energy and money you put into the business and what you are getting as a return on your investment.

Take a hard look at your market and see what's needed- is it time to add more interactives? Games? Tables, tents, and chairs? What can you do that's different from the rest that will make your business stand out and be profitable?

Don't give in to price spiraling- make your company different and better than the others and give customers a reason to call again and again and refer you to all their friends.

Hot Threads at the Forum

Wrap Up

That's it for the May Advisor! Expect to start receiving the Advisor every month as long as you are subscribed. AIRCO members will also receive the AIRCO Insider on a monthly basis, with details about AIRCO organizational items, upcoming happenings, and special deals for members only.

Both the Advisor and the Insider are in need of information and articles, so if you've got something to share with the industry, send it to me at scottieclaiborne@a-irco.org. We want to hear from you! See you next month, or feel free to join us at the forum anytime, day or night. We hope you have a WONDERFUL Mother's Day!