Effective Growth Strategies for Photo Booth Rental Businesses
The photo booth rental sector maintains a $70 million market capitalization with projections estimating an annual increase of over 7% per year, making it important to find effective strategies to grow your business (IBISWorld). The increased competition in the photo booth market has made it difficult for many businesses to find creative ways to promote business growth. However, growth is critical to ensure business continuity, leading businesses to consider multiple different strategies to implement including purchasing efficient equipment and adding new revenue streams.
Purchase Efficient Equipment
The first viable strategy to promote business growth in your photo booth rental business is to purchase efficient equipment. Let’s say you only have one photo booth machine that you currently rent. If you were to invest in another machine, you have the potential to double your profits. Although investing in another piece of equipment sounds expensive, many companies, like RevoSpin, work with you to put together an equipment package that fits your needs and is within your budget. In addition, many small businesses have luck securing a line of credit that can aid in paying for the piece of equipment all while maintaining effective cash flow policies.
Create Engaging Marketing Campaigns
Social media is rapidly changing the way that consumers browse and purchase products. Utilizing different social media platforms, such as Facebook, Twitter and TikTok, gives your business exposure to different target markets. One viral video has the potential to reach tens of thousands of individuals. Even if only 1% of those views convert to sales, your business will benefit and see increased growth. Moreover, in order to create engaging marketing campaigns, you will need to understand your target market. For example, if your target audience is between the ages of 20-40, you would want to analyze the social media platforms that group is using to tailor your campaign.
Add New Revenue Streams
Many photo booth rental businesses are wary of adding new revenue streams, but the advantages far outweigh any drawbacks. New, innovative technology is consistently hitting the photo booth market. One such innovation is a 360 photo booth that allows users to take spinning videos. Getting ahold of the new technology before your competitors will lead to increased sales and accumulation of market share, both of which help scale your business. The revenue generated from adding a new revenue stream far exceeds the initial equipment cost. Moreover, finding new revenue streams can be done by staying on top of trending posts and closely monitoring competitors.
Reinvest Profits
Many photo booth rental business owners make the detrimental mistake of pulling out all profits the business makes. Although it may be tempting to pay yourself once you have excess income, you should not take any money out of the business in the first few years. Recent studies have shown that nearly 20% of new businesses fail in the first 2 years with a 45% failure rate at the five-year mark (Deane, Investopedia). Your business has a higher chance of success if you focus on reinvesting profits in the form of new equipment and other value-added items. After you are consistently generating a solid revenue stream and your equipment is operating at peak efficiency, you can begin to pull money out of your company in the form of a salary or distribution.
Invest in an Accounting Software
Implementing growth measures is only half the battle with keeping track of your financials on the other side. Accounting is the foundation for many successful businesses, controlling the cash flow and income reporting functions. An accounting software can take a significant amount of the burden off your plate, allowing for seamless integration of bank transactions and continuous tracking of financial reports. Furthermore, reconciliation procedures and report oversight should be completed on a monthly basis to retain a full understanding of your business’s financial health. The ability to access your financial information in real-time with an accounting software leads to more informed business decisions, ultimately promoting growth.
Have the Legal Side in Check
Similar to investing in an accounting software, you should also have a legal resource on your side. No business runs 100% smoothly, calling on the need to be fully prepared for whatever legal situation arises. One legal team that is knowledgeable on photo booth rental businesses is Legalinc. Legalinc has the knowledge to not only help your business determine proper entity type, but they can also help you navigate other complex areas of being a business owner. As your business begins to grow, different entity setups may be more beneficial, making it important to have an expert working alongside you to reduce any errors and mistakes in the process. In addition, Legalinc frequently helps small businesses complete annual filings and corporate compliance in a timely yet accurate manner.
Form Beneficial Partnerships
Many small businesses see heightened benefits from forming beneficial partnerships with other businesses operating in the same industry. Reach out to party planners and different venues to provide them with your contact information. In many cases, you can work directly with the planner or venue to put together a package deal for customers, allowing both parties to generate revenue. Furthermore, a positive relationship with other industry experts leads to increased referrals and opportunities for rentals, promoting business growth.
Next Steps
Finding what growth strategies work for your photo booth rental business will take time and perseverance; however, don’t automatically rule out strategies because they didn’t work the first time around. Consumer demand and competition is constantly changing calling on the need for your business to adapt to new requirements. The first step many photo booth rental business owners take is purchasing new equipment with RevoSpin, creating the opportunity to double profits. For more information or to put together a custom equipment package, reach out to RevoSpin today.
Sources
Deane, Michael. “Top 6 Reasons New Businesses Fail.” Investopedia, 10 January 2022, https://www.investopedia.com/financial-edge/1010/top-6-reasons-new-businesses-fail.aspx#:~:text=Data%20from%20the%20BLS%20shows,to%2015%20years%20or%20more. Accessed 12 April 2022.
IBISWorld. “Photo Booth Rental Industry in the US – Market Report.” IBISWorld, 22 October 2021, https://www.ibisworld.com/united-states/market-research-reports/photo-booth-rental-industry/. Accessed 12 April 2022.