SlightlySick™ University

Capitalizing On Fright

In previous posts the main topic of discussion was start-up and operation costs, and how operators MUST properly manage these items in order to have a profitable haunt. Although marketing can be, and most assuredly is, a significant cost item, there exists the potential to turn this item into a lucrative revenue stream if handled appropriately. These next series of posts are dedicated to illuminating potential avenues of approach when trying to market your haunt, both for the start-up, as well as, the seasoned haunter.

Marketing 101: Haunt Start-Up

Marketing….what a simple word which elicits many definitions depending upon the person or group you ask. Well, I like to keep things simple and go directly to the source. The definition of marketing, as found in the dictionary is “(1) the act of buying or selling in a market, (2) the total of activities involved in a transfer of goods from the producer or seller to the consumer or buyer, including advertising, shipping, storing, and selling.” First-things-first, define your market. Every haunter, including myself at one point, likes to state that EVERYONE is his target audience. It may be true you want to get as many people through as possible, however there are certain niches which haunters fulfill. Much of your market will depend upon the type of event you are hosting, i.e. is there extreme gore, are you a family venue with a pumpkin patch, are you corn maze, etc. For most start-up haunters, which do not have a built-in audience, trying for a more general theme will most likely work best, as you will be able to reach a broader, more diverse demographic.

Temporary attraction providers, which tend to have multiple themes, can utilize this effectively by segmenting their attractions, i.e. this section is for older customers, while other sections are more family oriented. This, in turn, can broaden the scope of your general marketing strategy. For example, start your haunt early and run a special for families with children, i.e. parents get in free or kids get in free or half-off adult tickets, etc. You can limit your staff and set-up the attraction more as a general walk-through and pass out candy.

Once you have established your location and market segment you are aiming for, you are then prepared to begin prepping your marketing plan.

Sponsors, Sponsors, How the F* Do I Get Sponsors??!! Radio?

If you’ve ever uttered those words consider yourself a professional haunter. Haunt sponsorship, as with any sponsorship, is a slow, grinding process which can turn even the most stoic of haunters into apoplectic fits of supercilious rage. First year haunts, are almost always the most difficult to sponsor. Outside of radio stations, which typically work on your naivety and lure you in with promises of great demographics and ‘sister’ station promotion, most ‘sponsors’ are typically unwilling to work with an unproven haunt. Even upon commencing with a radio advertiser, as most haunters choose this route, make sure you know what you are getting. See how many commercials you get per day, during what hours, and if they are willing to ‘stack’ your promotions towards the beginning, and up to one week before the opening of your season. The more times people hear your commercial the better. But let’s face it, radio is beginning its long, slow death. And although by no means at its nadir, it’s definitely not the medium it once was, say 10 years ago. Most haunters are tired of the bastard ‘sister’ station, main radio stations always try to pawn off as a way to ‘cross’ promote our haunts via other venues. Whenever a sales executive says lets ‘cross promote your haunt with our new, dipstick AM, no news just talk radio station,’ makes the hairs on a certain nether region twinge.

Perhaps this is why most haunters are slowly beginning to ditch the medium altogether. Although I’m not ready to abandon radio entirely, as its serves a function, especially in those beginning, awkward years, when you are trying to tie in other sponsors by selling them ‘time’ in your commercials. You definitely should know its limits. Nonetheless if you choose this route make sure to focus on the following:

(1) Buy radio ads toward the end of the year as most radio stations are setting their operating budgets for the following year. As such, they offer specials for commercials placed during this time. This, in turn, allows you to get more bang for your buck.

(2) Frequency: Make sure to stack your commercials prior to event opening, i.e. have your commercials play every half hour or greater. Then you can slowly tone down the amount of play time towards the end.

(3) If you can get in early, see if the radio station will sponsor your event. You purchase air-time and then they give you additional ‘free’ air-time. Make sure you get them to do ‘live’ remotes and when I mean ‘live’ I mean LIVE, like having an actual on-air DJ show-up, not his sycophantic interns.

(4) Try to re-sell your air time to other sponsors in the area. If you can purchase the commercials early in the season, this could possibly impress other possible sponsors by your ‘can-do’ attitude.

(5) Location, location, location, make your location work for you. Tie in your location with your radio advertising

(6) Make sure you do the custom audio on your commercials and not some disgruntled janitor the radio station picks up off the street. If this becomes cost prohibitive, at least make sure you hear a few takes before you sign off.

Well, that’s it for now…till next time….Happy Haunting!!!

Haunt Operation Costs Can Truly Be SCARY!!

Well, as they say (and by they I’m not sure who exactly they are, but I’ve never truly appreciated their axiomatic witticisms), this is where the rubber meets the road, i.e. where your budget and true operation costs collide into a hodgepodge of mania, perturbation, and, often times, generally confused analysis. Up until this point, much of your planning has been ‘paper’ planning with the general divergence into reality when you begin construction. Both your pre-open soft and hard costs, as elaborated in previous posts, are WAY easier to calculate and control, as time is on your side (this of course assumes you begin your planning and development process early). Nonetheless, nothing can truly prepare you for opening day.

True Cost of Operations

Awww, OPENING DAY, what a truly wonderful experience it is, all the planning, hard work, and general blood, sweat, and tears will now finally pay off!!! At least, that’s in the mind of most haunt operators. They see long lines at other haunted houses and expect similar results. Although I haven’t discussed a general marketing plan and a gorilla marketing strategy, not to fret as these will be discussed in later posts, you will need to have a handle on your costs as they will most assuredly arise once operations get underway. Below you will find some of the general costs associated with operations:

1. Actors: Actor costs can single handedly run astray if you do not keep a close check on them. Much of these costs can be mitigated in the pre-planning stages by trying to work with various community organizations and trying to get volunteers to work at your haunt. In my experience, volunteer haunters are your best as they actually WANT to be there. This isn’t to say that paid haunters do not provide a great experience; it’s just that on a cost side, volunteers are definitely the way to go when starting out. This of course will require a lot of planning and proper scheduling, as you want to make sure you are properly staffed/insured. It is helpful to have a general staffing plan in mind, and have someone in charge of actor management (further posts will include a how-to on actor management).

2. Ticket Takers: Well, if you are planning on running the ticket booth yourself, then you really don’t have to worry. If you have to contract this out make sure to keep careful counts on the tickets that are received at the gate. The industry, as a whole, has gradually become more technologically equipped, i.e. use of credit card machines and e-tickets, this has greatly reduced our dependence on cash. As such, ‘skimming’ off the top which occurred in past haunt eras does not happen with as much frequency as today. Nonetheless, we still accept cash and it’s a standard haunt currency especially if you are setting up a temporary haunt attraction.

3. Security: Another large portion of your operation costs will be spent on security. Again this will stem from your pre-planning process. See if you can hire off-duty police officers and trade out event security for tickets. Contact security staffing firms early and see how flexible they are with you on scheduling. On slow nights, you will want to lower your security staff to an acceptable level. However, these costs can remain quite high anywhere from $18 to $40/hour depending upon the firm. Often times, if not discussed previously, they will charge the full time even if you relieve some of the security staff early. For temporary haunts, especially those set-up in mall parking lots, working with their security can be of tremendous benefit, as they are constantly on patrol anyway. Make sure to talk with staff and see if you can have increased presence during haunt operation hours.

4. Site Maintenance: It is helpful to note that this shouldn’t be a ‘major’ cost, however if you are not near ‘civilization’ and/or are in other remote locations finding a garbage disposal crew can be a bit tricky. Furthermore, you want to make sure that your site is free of loose debris as this can create additional hazards.

5. Electrical/Water: Although this should be considered when choosing a site, this can cause significant costs in the long run. Will you be using temporary or having a temporary power pole installed to run electricity? In one of our haunts last year we had a problem where we were one day from opening and the power company had not installed our power line. As a result, we were forced to use a temporary power generator. Generators vary in expense, especially when it comes to location. We were lucky in that we only strayed from our preliminary lighting budget by about $1,500, nonetheless without proper planning this can be a devastating blow to a start-up operation, which runs, typically, on a shoe-string budget. Water can be another concern, especially if you are required to run fire sprinklers, fountain feature props, etc. Developing a temporary water source can be costly and should impact the location you decide to lease.

6. Misc. Equipment: This will include Port-O-Potties, flashlights, safety gear,croud control, search lights, (although this can be categorized with marketing its still an equipment expense), actor ‘hangout’ area, etc.

7. Charity: This is where my two cents definitely come into play. If you don’t want to hear it, just skip this section. We, as an industry, myself included, have strayed from doing more community outreach and/or tie-ins with community organizations. But there’s more to it than in its base altruistic sense, it is also good marketing. Make sure to give back, because the community is giving to you. Make a $1 or $2 donation to the charity of your choice. Not only goes a long way for the success of your haunt, it is also good stewardship for your community.

8. Management Fee: Last but not least make sure to create a line item in your budget TO PAY YOURSELF!!! I mean you’re doing all the heavy lifting, putting an entire show together you NEED to get paid. I always hear haunters say I’m doing it for the love of the haunt. Yes that’s true; most of us wouldn’t be in this industry if we weren’t passionate about it. Nonetheless, passion does not pay back ‘Knuckles’ for your loan nor does it pay a mortgage. Typically, the only thing passion leads to, outside of pregnancy and/or other strange forms of STDs, is DIVORE or BANKRUPTCY. After you pay yourself for your time then you can get a true sense of your profitability (if you are a for-profit haunter).
I should have included this in my last post, so I’ll make up for it in this one, make sure to always leave a 10% margin for cost overruns. Most likely, at least in your beginning years, you’ll have cost overruns well above 20%, at least it will help hone your skills as a business person.

Also, at the end of the night, when you are tired, pissed off and hungry, make sure to do actual counts of all costs and total revenue. If it’s your first year you’ll have to do some creative budgeting in that you will not have experience and other numbers to compare. Nonetheless, you must constantly strive to do better each year. The day we stop learning is the day we’re looking up from the other side of the grass. Until then…..Happy Haunting

How to Use You Capital Efficaciously

Let me first start that when preparing a proper budget for your haunt you should discuss this matter with your investors, partners, and a good banker/accountant. It is imperative that everyone is privy to your budget and understands how you will implement your business plan. Throughout our years of haunting, one of the first questions we are inevitably asked is, ‘I live in such-and-such location, there are a few okay haunts, I KNOW I can build a haunt better than theirs. I have all these ideas what is the cost going to be?’ Although a seemingly straightforward question, there are many costs not realized and/or not accounted for when developing a proper budget. As such, this section will cover general costs associated with haunt ‘Start-Up Costs,’ i.e. costs which are incurred prior to beginning the show and ‘Operation Costs,’ i.e. those costs which are incurred during the haunt run.

If You Build It They Will Come

Think of your haunted house project as akin to a construction project. All construction projects have general timelines, many rules and regulations to follow and a general standard under which they move forward through the various city/state and other governmental processes. Construction costs, much like the costs of a haunted house, can be furcated into two types:

1. Soft Costs: Are those costs associated with the development of the project which do not go directly to the actual or ‘physical’ construction or improvement of the project, i.e. engineering, architectural, logo design, etc.

2. Hard Costs: Are those costs which go towards the physical development of the haunted house

When starting out, set-up a budget for each of your costs. If you are just starting to develop a pro-haunt, we would suggest hiring a consultant. As consultant’s go, there’s a plethora of them so be sure to choose someone from research. Not to toot our own horn (but when it comes down to it, it is to toot our own horn), but we do provide consulting services, either way make sure you have someone who has operated a haunt in the past and can assist you through the myriad of processes you are about to embark upon. Below you will find a comprehensive list (although not necessarily complete as locations and types of haunts vary wildly) of the costs which can be expected at start-up:

1. Consultant: This can vary, however your consultant should be able to assist you in developing preliminary layouts, electrical plans, scare scenes, logo design/development, marketing strategies, etc. This will, in turn, allow you to address more exigent needs, i.e. engineering/permitting, in a more professional way.

2. Engineer: This is largely contingent upon what type of system you are running, i.e. static – in a physical building or temporary, i.e. container/semi-trailer or other open-air/canopy system. Each municipality has their own codes which can impact the need and use of an engineer.

3. Electrical Engineer: See answer above

4. Site Plan: Can be used in conjunction with your engineer, if needed, or just a general layout of what your haunt will look like

5. Electrical Plan: Should be used in conjunction with your site plan so that you know which areas of the haunt you want to ‘flood’ with light and therefore spend a higher degree of cost to make those areas quite elaborate

6. Props/Lighting/Fog: Props can rapidly become a major expense to any haunted attraction. However, if you use your electrical plan to its highest degree, then you should only concern yourself with those areas that need to be highly decorated. Large props do not necessarily equate into highly entertaining screams. Playing an audio track of horrific screaming in the haunt is often times enough to place your patrons on edge and keeping your total cost low. Additionally, if you do have a budget to purchase large props make sure you have enough technical staff which can assist when the prop malfunctions (I’m not saying that all large props have problems, however you can bank of this, the more moving parts the more likely something will go wrong).

7. Location: Although not always the case, especially if you can work out a sponsorship with an owner of the property, most property owners require a portion, if not all, of the lease amount up-front. If you are purchasing a property then there are other tax/cost implications, however for temporary events this can be a sizeable portion of your overall budget. Parking lot costs and/or other open area costs can be from as little as $5,000 to upwards to $200,000, if significant site improvement is required. Whenever you are researching a location make sure to ask the following questions: (1) Does the location have power or do I have to bring in a temporary power generator? (2) Does the location have access to water, if not, what are my alternative sources for water?

8. Insurance: Rates do vary per carrier, however we met a few insurance reps at this past Transworld which were quoting $0.10/customer for a $1M general liability insurance policy. Essentially if you expect 5,000 patrons your total premium would be $500.

9. Pay Yourself: This is especially true if you are receiving money from investors, as you should be compensated for your work in organizing the event. Additionally, if you are applying for a bank loan, bankers want to see that you are going to be paid for your time. As is the case with many start-up haunters and business owners, paying yourself usually comes last. If you can’t pay yourself up-front, in the least build in a ‘management’ fee to be paid from operations of the haunt.

Look for Part 3, which will include all the costs associated with operations. Until then…..Happy Haunting