By Leonard Pickel of Hauntrepreneurs Themed Attraction Design and Consulting Firm
Imagine driving past a Haunted House on the last Saturday before Halloween. You might think that the haunt owner is getting rich when you see the long lines of people each paying $20 or more to get scared! But the truth is that a Haunted Event is a business like any other. It will fail if you don’t treat it like a business. However, a properly advertised, properly configured Halloween Event can be very successful and very fulfilling as a business.
The two hardest pieces of the puzzle to find when planning to open an October seasonal attraction are location and funding. As hard as it is to find enough money to open, finding a location is even harder. So that is your primary goal! And good luck! You will need it. Think outside the box on this. Find an existing location or business without a lot of heavy October traffic. The ideal locations are water parks, flea markets, small amusement parks, family fun centers, and even tennis clubs that have parking and infrastructure like restrooms. Many of these businesses already know how to market properly and have contacts with sponsors. These are the kinds of businesses that are perfect to partner up with for a haunt. Just make sure that you own the name of the event and the haunt itself, so that if they decide to cut you out someday, you will at least have some assets to take with you.
In the meantime, here are some inexpensive things you can do to move your project along: First you need a name for the event, NOT for the haunt at your event, but for the overall event. The names of the attractions that make up the event will change over time. Never put your location in the name, as that too may change. Make sure you can purchase the .com for the name you choose. It is a good sign that a name is not already trademarked when no one else is using it. I do recommend that you trademark your event name. It costs about $250 to file for a trademark if you do it yourself. Search the web for trademark and copyright registration on the dot gov website, and then follow the online their instructions to get the copright and trademark.
Once you pick the name and purchase the domain name, create all the social media pages you can think of for that name. Twitter, Facebook, Instagram, Snapchat, and YouTube are the main options, but grab everything. You never know what the next hot platform will be. As soon as you have the social media pages, start building traffic on them and the website. For that you need logos and artwork for your event. I strongly suggest you hire a professional to build your website and do your artwork. This is the branding of your product, and branding can make or break an event. Your website or social media is the first impression people have of your quality, professionalism, and creativity. Don’t disappoint them before the even get to your haunt.
It takes time to build a following, so start as soon as your can. Create social media posts in haunt groups to drive interest in your pages. Post often, like other posts often, share your posts on social networks often, and build a following. Involve your followers in the concept development of the event, or at least let them think they are involved. This will give them a sense of ownership and they will support your efforts. Social media is a great place to find staff as well. Create a Facebook Group just for your actors. The attempt here is to build a community of people who have a love relationship with the event. Your staff will interact and become friends, share rides, swap schedules, and help promote your event to their social networks.
Marketing Your Attraction
The key piece of a successful Haunted event is marketing. The industry average cost for customer acquisition is between two and three dollars per capita spent in advertising dollars. You may be able to get as low as $1.50 per capita for an established event, but three dollars per head is recommended for a new event. At this point, it literally becomes a math problem. How many people do you need to put through your haunt to be truly profitable? Multiply that number by $3.00 per person and this becomes your marketing budget. This is the target number to spend in marketing dollars for your event. If you spend these dollars wisely and in the right places, your event can be a success.
Where to spend that money is a whole other conversation, but stay away from newspaper, fliers, and street teams! You cannot “guerilla market” a haunted house and expect to get more than 5,000 people in attendance. You must spend real money on traditional media to be profitable. Radio, billboards, purchased social media ads, etc… Radio has been king of haunt advertising for forty years, but that is changing. Digital media is taking that place, and even today’s radio stations have some digital component, so it is recommended to use both. Once you decide on a marketing budget, set that money aside BEFORE you start building the haunt. Advertising is the last thing you purchase, and if you go over budget when building the attraction, it is tempting to steal ad money. Don’t do it! You are better off with a weak haunt that is promoted properly, than a great haunt that no one knows about because of lack of money spent on advertising.
Design & Operations
The next number you need to consider for your business plan is the build and operation costs. Even before you can price your construction, you must design the attractions. I say attractions in the plural sense because I am a true believer in the multi-element event. You need to break your fright experience into at least two pieces so you can sell people something to eat or drink in between the two. Today I don’t design any attractions larger than 3,000 square feet, but I want you to have 3-4 attractions to start, and more later. Again, the why is a longer discussion; but as an example, one can charge more for (4) 2,000 square foot haunts than you can for a single 8,000 square foot haunt. The costs remain the same and that extra ticket money goes directly to your bottom line.
Only the sky is the limit when building a haunted house. I promise it will take you every dollar you can lay your hands on plus more to build your haunted house. In order to be successful you must set a budget and sick to that budget! It will take you between $20 and $35 per square foot to build your attraction. You may be able to shave those numbers slightly by building it yourself, or by purchasing a used attraction from someone. There are several available for sale on the Hauntrepreneurs.com website. But you can easily exceed that budget by buying a bunch of expensive animatronics. It is live actors that scare people. Large animatronics are great eye candy, provide “wow” power and work well for the purposes of misdirection, but they rarely scare that 21-year-old male. The 21-year-old male is the hardest to frighten in a haunt and should also be your target for scares. Animated pop ups and air/water blasts are fine, but real scares are done by actors. Too, actors are cheaper, at least in the short run, than animatronics.
Actors can make or break a haunted house and they are hard to find, especially good ones, so look everywhere. Pay them minimum wage unless they have experience and increase their wage each year. You have to schmooze, groom and coddle your staff. Offer performance perks, feed them, and make sure they know how important they are to your success. Do whatever it takes to keep the great ones. However, you must retain control. They must stick to the design of the haunt. There is little room for ad libbing. One actor standing in a hallway not letting people pass can destroy the quality of the show and will bottleneck your attraction into the parking lot. Both are profit killers.
By the way, unless your company is a 501c3 charitable organization, it is not legal for you to use volunteer labor. And why would you, when the actors are so key to your success? If you are a real a business, then you should pay your employees! If you cannot afford to pay your employees, then you really aren’t in business. Even a non-profit haunted house needs to make a profit. Otherwise what is the point of opening it as a fundraiser? For that matter, if charitable haunts would approach their haunted event like they would a for-profit business, they would make more money for the charity than they would as a non-profit haunted house.
Planning The Budget
The last question is what to charge. This will depend on your market, the economy and the location. Start your pricing on the high end and offer discounts early in the season to drive early attendance. Decrease the discounts as October 31st approaches. I recommend opening your season on the last Saturday in September. Then plan to be open every Friday and Saturday through the first Saturday in November. You should also stay open the Sunday before Columbus Day, and maybe even Halloween night depending on your market and how the day falls this year. Haunting is a date thing, so it is important to be open when people would go out on dates. People will only come when you are open on a typical date night, and any other nights won’t add significantly to your attendance while significantly increasing payroll. Thus, it is best to open only on a typical date nights.
Attendance is typically exponential: Every weekend will generally double in attendance from the week prior. So the more people you can get in the haunt early, the more it will tend to dramatically increase the final head count. Just make sure the attraction can handle the number of people you are driving to your door. Design the haunts to provide a great show for a constant line of people through the haunt. You will not need that capacity all the time. But if you don’t have it when you do need it, your guests will have long wait times. If people had to wait four hours to get in, they will not be happy no matter how cool your haunt is. I also highly recommend timed ticketing for your event. This solves a lot of problems and flattens out the nightly attendance curve. Without timed ticketing, typically everyone will arrive at 9pm to go through your haunts. There are many more reasons on why timed ticketing is a smart idea. Trust me on this one.
Crunching the numbers
Once you put all of these numbers in a business plan, it will tell you how much capital you need to open. I wish I could tell you where to find the money to open your fright event. In many cases you are on your own! Even so: When you get to the end of your business plan, make sure the bottom line says “obscene profits!” If it doesn’t say “obscene profits,” then rework the business plan until it does. Add an additional haunted house to the offering so you can increase your ticket price, increase your advertising to drive more attendance, or do both, but don’t start a business that is not, at least on paper, highly profitable. Why would you?
A Strong Reserve Fund
My last piece of advice is to make sure you have enough to money not only get open year one, but you also you have some cash in reserve to make it to year two. The costs for a haunting business is front loaded. You have to pay for props and walls and equipment. It is year two when the high profits start kicking in. If you don’t have enough money in reserve to overcome a bad year, some mistakes you will make, bad weather, or an unforeseen mishap; then you are done before you even get to year two. It is much better to wait until next year or the year after that and make sure you have everything you need to be profitable from the start. If you really took a close look at haunts across the county, many of them are not profitable. They use volunteer labor, don’t include their time in the profit and loss statement, and still just scratch by with minimal proceeds.
The final analysis
Opening a Haunted Event is not a get rich quick scheme. The window for making money is very small. There are easier ways to make a living, but there is no business that is more fun than scaring the crap out of people! Done properly, with the multi-element approach, timed ticketing, paid staff, $3 per head spent in advertising, great location, build cost control, high capacity, great actors and enough capital to make it to year two, a fright event can be very profitable. Haunting is a creative outlet like no other. I have been helping people get started in the haunt business for over 40 years now it is my true passion. If you love horror and scaring people, then Haunting could be in your future as well!