Wednesday, April 19, 2006

Residual Income


I've been thinking lately (since I've chosen a career in Christian higher education - which I love - and the odds are pretty good that while I will certainly make a comfortable living someday, it will never make me rich) that I need to start a side business. You see, I like to travel. Ideally... I'd like to spend two weeks a year traveling in another country, one week traveling within the US, and one more week at the beach (country doesn't matter on this one) EACH year. While I could strategically schedule all of my out of town "business" trips for the advancement and financial support of Christian higher education in cities that have beaches, I've recently had an idea that I think just might help me achieve that goal without having to soil the integrity of my department's travel budget.

What is this idea you ask? One word... INFLATABLES. Yes you heard right... INFLATABLES. I found out recently that these amazing producers of residual income can be purchased for the low low price of $1900. Word on the street is that going rate for these beautiful bouncy jackpots is somewhere around $200 per four hour rental - AND - it's not just the folks in Nichols Hills or Gaillardia that are renting them either. No. These things are popping up at kids birthday parties all over the place.

Let's say I pay a college student $50 to go, set it up, come back in four hours, deflate it, pack it back up, and take it back where it belongs... that's still $150 per rental. To be conservative, let's say the actual profit (after advertising, storage, and insurance) comes to $100 per rental. Then, let's say I rent it out four times per month eleven months out of the year. That's $4400 per year in residual income and the inflatable is paid off after the first five months. Let's also say that I purchase an additional inflatable every year for the next five years. Being conservative again, let's pretend I'm able to rent each of the four inflatables out three times per month, ten months out of the year. That's $12,000 residual income a year that really shouldn't involve much work on my part.

Obviously there will be some work. I'll have to hire workers, collect the money, write the paychecks, do some advertising, schedule the birthday parties, and take care of the taxes. However, I work on a college campus so there are always good trustworthy students who are looking for work that I can hire. Collecting money never did bother me much. With the help of QuickenPro, writing paychecks and keeping track of taxes should be a breeze. With the help of the Microsoft Outlook Calendar (which I am a very proficient user of), scheduling doesn't worry me. As far as advertising goes, the beauty of these inflatables is that you can put your company logo and phone number right on the top front panel. Obviously it would take a little leg work to get the company name out there, but after the first ten or twenty parties, most of my business would probably end up coming from word of mouth and referrals. After all, it's all about keeping up with the Jone's when it comes to kids' birthday parties. If one kid on the block gets an inflatable for his or her birthday party, they're all gonna want one.

Other than everything I've already mentioned, there are two reasons this idea is extremely appealing to me.

Reason #1 - I will probably be partnering with my brother-in-law on this deal. If we each put in half, it's only going to take $850 out my pocket. If I have over estimated the market demand for this product and we can't get anyone to rent, we'll still have our own moon bounce. How cool would that be? "Hey guys, do you wanna come over to my house? We can watch the game, munch on some buffalo wings, and jump in the moonbounce." Nope... it doesn't get any cooler than that.

Reason #2 - There will never be a shortage of children's birthday parties, and I can't ever foresee a time when inflatables will not be a huge birthday party hit. Granted, the economy could tank and people might stop wanting to spend $200 for an inflatable rental at their kids' birthday, but that doesn't worry me. If the economy does tank and people stop renting inflatables, I won't have paid for any of them with credit so I won't have to worry about missing a payment. It's not like inflatable moonbounces are perishable either. When the economy does come back, I will be there waiting to pounce, like a fat man at an all you can eat Chinese buffet, on all of the exciting "Welcome Back Economy" parties that just won't be complete without an inflatable moonbounce. If the economy doesn't come back... what to do with a few inflatable moonbounces that no body wants to rent will be the least of my problems.

Europe, Nassau, Maui, and Australia, here I come. Yes sir! It's gonna be cool... real cool.

3 comments:

  1. Sounds good, not to mention you can always "underpay" the students you hire from OC. They never complain, unless you raise their housing...and they still can't do anything about it!

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  2. That sounds like a great idea. I was going to tell you so in an email, but I didn't want to feed your compulsion.

    Why $50/job (~$25/hr) for these college kids? I remember when I was in college, and we didn't have no fancy jobs like that. And my college never rented inflatables that I can remember while I was there. I say pay the workers $20 total and give them a free half-hour in the inflatable.

    You'll have so many takers, you'll have to beat them away with sticks.

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  3. I'm telling you. Inflatable slip and slides. It is the wave of the inflatable future.

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