If you are anything like me, I’m not much of a risk taker when it comes to using my own money for a new idea (and probably like you, I come up with 5-10 new “ideas” every day in my head). Most entrepreneurs try to mitigate as much risk as possible when it comes to financing a new business venture. Also like many of you, I have a family to support and don’t have a ton of disposable income. If this is you, just ignore the first 4 points and skip down to #5.
- Save up. I bought my photo booth with money we had in our savings account. Perhaps you have enough in your savings as well. Maybe you forgot about the account with all the birthday money from grandma. If you don’t already have enough in savings, how quickly could you save $3,000-$6,000? You could probably save this amount quicker than you think by picking up some extra hours at work and cutting back on some expenses.
- Open up a no-interest, no payments for a while, credit card. Like everyone else, every day I get a new credit card offer in my mailbox, many of them offer no-interest payments for 6 months to 1 year or balance transfer deals. If you’ve got a good credit score and a sufficient credit limit, you could put the photo booth on the new credit card and pay it off interest free as you book photo booth rentals.
- Peer to peer lending. Get a personal loan from your peers. You could use a site like Prosper or Lending Club, to secure a personal loan without going through your bank. Fill out the application and see what kind of credit rate they propose. If they agree to your application and you to the terms, investors begin funding your loan. Most loans are fulfilled within 10-15 days.
- Crowdfunding. Let me start by saying, I don’t know anyone who has crowdfunded a photo booth, but I think it is certainly possible. Crowdfunding is becoming a popular way to raise funds for non-profits, causes, inventions and ideas, why not a service business like photo booth rentals? Sites like Kickstarter, Indiegogo, and GoFundMe are available to anyone to raise money for their cause or business. Typically, the people who give a donation receive a perk or gift of some sort. Since we are in the photo booth business, you could offer 1 or 2 hours of a photo booth rental for a certain donation amount, photo strip graphic design, company t-shirt, etc.
- Book before you buy. This is by far my favorite strategy, I’m a big fan of using other people’s money, whenever I can. Although I didn’t fully pay for my photo booth before I bought it, I did book two Sweet 16 parties while the booth was in-transit, being delivered to my house. I was actually out of town for those two Sweet 16 parties, the first gigs we ever had and quickly trained a friend, but that is a story for another time. Here is a strategy you can use if you are really risk averse and want to insure that you are making a good investment and business decision.
Decide on the brand of photo booth that you are going to purchase (or if you are going to DIY, figure out what you are going to build) so that you can use stock photos, photos that the booth produces and know its features and capabilities. Ask the company for some sample, booth produced photos, as well as some photos of the booth itself, explain that you are considering purchasing their photo booth and they will be more than willing to send you some. You are going to advertise with these photos and don’t want to false advertise by using photos that the photo booth did not produce. Fire up your simple one-page website that you used during the validation process and run a Google Adwords campaign and/or a Facebook ad campaign to your site and actually take deposits and book dates. Be sure to give yourself plenty of time to acquire the photo booth and make it clear that you’re only taking deposits for dates 6 months or a year out, whatever you are comfortable with. For example, right now you could say that you are only booking dates for next year. Believe it or not, most people don’t care about actually coming to see the booth in person and meeting with you. I think we’ve only ever had 2-3 people come by to see the photo booth in person before placing a deposit. Furthermore, probably 90% of people who book our photo booth, we’ve never even actually spoken with on the phone, email has been the preferred method of communication. You may have to set-up a DBA with your local county office, if people are going to send you deposit checks, although about 75% of people who book our photo booth prefer to pay online. Depending on the prices you set and the price of the booth you are buying, if you take 10-20 deposits and then take into account the remaining balances you’ll receive, it is possible to pay for the entire booth, before you even have it.
Now if you are already in the event industry, a DJ, event planner, caterer, etc. who is considering adding a photo booth to your services or if you know someone who is, this becomes even easier. You can simply send out an email to your existing list or their list, asking if they would be interested in renting a photo booth for their event. If you happen to know a vendor who goes to Bridal/Wedding Expos and would be willing to provide you with an email list of brides and grooms that would be incredibly valuable for generating bookings as well.
Lastly, this strategy also works if you are considering adding a second photo booth to your business. Keep track of how many people you’ve had to turn down because you were already booked that date, and see if the potential profits come close to the cost of adding another photo booth. Contact those folks back and start double booking dates if the number make sense.
Get out there and starting filling up your calendar!
If you’re close to making the commitment be sure to check this out first – Don’t buy a photo booth until you read this.
Otherwise, if you’re ready to get started here are some tips on how to structure your business.