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Due diligence while buying (or selling) a haunt.

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  • #16
    I just returned from vacation so I apologize for not having responded sooner. Here are questions I recently received via email and my replies. I'm currently working on responding to more than 600 emails and getting caught up on a number of projects I left pending when I headed out on vacation so I hope this helps!

    Question: I have been looking into having a company build my haunt. Can you provide any insight into the company you used and what your recommendations would be in pursuing something like this?

    I prefer not to disclose the company we went with as it was a long time ago now and the bad experience is water under the bridge at this point. I would, however, suggest that you request references from anyone you are considering and make sure to really investigate how well the reference knows the haunt builder / business owner. You don't want to find out later that the reference is just a good friend saying what they believe you want to hear. Ask solid questions as to what all was entailed in the work they had done by the builder and ask them to be specific. Make sure to ask about fire and safety code compliance; this is critical!

    Make sure you check with your local officials and know the requirements so you can present them to the builder and have it written into the contract that they will build in compliance and comply with inspections during the building process. Include in the contract that you will not be held to the balance due on the contract until the haunt has passed all necessary inspections. Also, be sure to include the completion date and include penalties that will be taken off the balance due for each day late on completion. I'd ask Larry Kirchner if he has any used attractions for sale, or if he knows of any. You could wind up saving a bundle on purchasing used as opposed to buying new. I'll also say that, unless you have access to some incredibly talented artists who are able to creatively build and paint sets, you will probably not be able to produce an attraction for the same price you may be able to find one used. Again, I'd look to see if you can locate a used attraction built by Halloween Productions or another top haunt builder for sale. Check for auctions taking place around the country as well!!!

    In regard to your question about starting out with approximately 3,500 square feet, starting out with 3,500 square feet is great! You can always increase the size of your attraction and the number of actors, but it can really hurt you if you start out too big and you have to downsize your attraction or staff. Quality is a far greater consideration than quantity and you can develop your attraction throughput and scenes in such a manner that your guests get a good show length with great quality without having to start off too big right out of the gate. This will also help you minimize your staffing and other overhead requirements until you know what your attendance will be and the financial investment it will justify. If you are going to lease a building to begin, you are better off committing to a smaller, and less expensive, least at first. As you grow your attraction and improve it, your fan base will grow as well.

    Question: You also mentioned with your business you received bank financing. Was it hard to convince a back to take a risk on this type of project no matter how good the business plan is?

    In the present economy, obtaining loans can be tricky. Does this mean it can't happen? Absolutely not! Our first loan was not an SBA Loan. Of course we owned an inn and used equity in the property as collateral for the loan. Any lender will want to know the loan can be secured by collateral and will normally require an investment of good faith on your part. I do believe that under our current President, there are going to be additional SBA loan opportunities with Obama's commitment to small businesses. Although you will probably have to operate the business a year or two before you'll be able to be approved for an SBA loan, that doesn't mean you shouldn't begin trying right away! Talk to the banks in your area that provide SBA Loans. Find out what opportunities are available right now. Also, contact SBA for your area directly and find out which lender writes the largest volume of SBA loans. This will be the lender you want to really start developing a relationship with as they will be the most likely to be able to slip higher risk SBA loans in with their other loans. As you build your relationship with the loan officer, even if you are not approved right away, invite him or her out to your attraction and provide complimentary VIP Tickets. Let the loan officer see your passion and your progress. This is something the lender can "sell" to SBA! Most of all, if this is really your passion, don't let anyone talk you out of it! Be willing to do your homework and always keep the vision of what you want to materialize clear so that it can motivate you!

    I highly recommend building a manifestation board with pictures of attractions that inspire you. Include pictures of outside and inside, and pictures of long lines of people waiting to enter. Imagine this as your attraction and feel the joy it brings! This is an extremely effective tool in motivating and manifesting!

    Anyway, I wish you all the best in your journey! Be good to everyone you encounter and treat them with respect and fairness. Maintain a positive attitude and a willingness and desire to help others. It's your life, make it a GREAT one my friend!

    Happy New Year!

    By the way, I just realized that I didn't clarify. We did ultimately get an SBA loan, once we were able to show a few year's of being established with attendance growth each year. Last year we obtained a second SBA loan to make significant enhancements to the Raycliff Manor attraction and to add a second new attraction, "Raycliff Carriage House".

    Remember, it's not as much about the destination as it is the journey so remember to enjoy the ride! ; )

    Kelly Allen
    Raycliff Manor Haunted Attraction


    • #17
      I have bought a lot of used props from old haunts. Most of them have taken a beating literally. Macho teenage boys like to punch things when they get scared. I do not know the Equation others use, but I look at the wholesale/discount price of the item new and expect to pay around 33% of that. Then I look at the damage, and determine if it is fixable or if it can be hidden. Lastly, I look at can I build it cheaper myself. There are a lot of unemployed haunters dying to make some quick cash building props. If I had money, I could probably hire 3 or 4 professionals year round.

      One thing I hate is props you see at the Halloween store. I want to see original props. If the haunt has been around for a few years, I would suspect that the props have the "been there done that" feeling. So when buying someone else's haunt, you have to ask yourself, how can you keep the haunt new and exciting.

      It seems to me that the haunts in your neighborhood are weak, as the newcomer just came in and stole the market. I would not want to build on someone else's bad reputation. I would suspect that another new haunt in the market could have the same success with the right marketing. I would say the key is location and marketing. Is it close to the freeway? Do you have mascot or recognizable gimmick? Target your audience through the radio. That will get them in the door! Having a good haunt and word of mouth will most likely be the cause of the next years success.

      It is difficult to buy a permanent location and only make profit a few months out of the year. If you lease it will be cheaper, but you will have to tear everything down, store, and rebuild later. Oh the Joy.

      Also, the old haunts may have been better because of actors. I would dig a little bit and see what people liked about the haunt.

      I would look at what I could afford by stating how much you want to spend per square foot. I would then want to determine how many actors vs animitronics you are going to use per room. Then I would look at the cost of decorations, not being afraid to buy things from salvation army/junk yards.