How to Start a Carnival Ride Business

Starting a carnival ride business can be an exciting and rewarding venture for entrepreneurs with a passion for entertainment and a knack for delivering joy to families and thrill-seekers alike.

That said, launching a carnival ride business is not without its challenges, as it will require significant financial investment, meticulous attention to safety standards, and a solid understanding of the logistics involved in setting up and operating large equipment.

In this comprehensive guide, we’ll walk you through all the essential steps you’ll need to take to start your own carnival ride business, from conducting market research and securing funding to choosing the right location, setting up operations, and attracting customers.

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Industry Overview

The U.S. carnival and amusement park industry has experienced steady growth, with current estimates indicating that approximately 500 million people attend carnivals, fairs, and festivals across the country each year.

Building on this steady growth, operators are now focusing on innovations that can further enhance the customer experience, with major amusement parks investing in technologies like IoT-enabled wristbands that streamline wait times and improve overall customer satisfaction.

At the same time, a growing middle-class population with disposable income has further fueled demand.

Startup Costs

If you’re considering whether a carnival ride business is right for you, the first thing you’ll need to know is whether it’s a) affordable, and b) worth the investment. I mean, how much can you actually make running your own carnival ride business?

Well, it depends, and the initial investment for a carnival ride business varies widely based on a multitude of factors, with total startup costs generally falling anywhere between $500,000 to $2,000,000.

These are broken down as follows:

• Ride Acquisition ($300,000 – $1,500,000): You will need to acquire a combination of quality carnival rides, with costs varying significantly based on factors such as the type, size, manufacturer, and age of each one. This category will form the bulk of your initial investment, but when starting out, you can always choose a smaller selection and supplement by outsourcing additional attractions or collaborating with independent vendors.
• Location Setup and Preparation ($50,000 – $200,000): You will need to prepare your chosen site for safe and efficient operations, with costs varying depending on whether you plan a stationary setup or a mobile operation. For a stationary site, this will often include investments in groundwork, landscaping, and fencing, while mobile setups will typically require portable structures, temporary fencing, and event space rentals to allow for flexible movement between locations.
• Transportation and Logistics ($50,000 – $200,000): To operate effectively, you will need to purchase a number of specialized vehicles in order to manage the transport of large rides, carry out maintenance tasks, and transport parts and other equipment. If you are setting up a mobile operation, these transportation requirements will be more extensive, with costs influenced by the number, type, and size of vehicles needed.
• Permits and Licenses ($5,000 – $20,000): You will need to obtain various permits and licenses to legally operate your rides and conduct business in different regions, along with passing safety inspections mandated by local authorities, with the costs varying based on where you plan to operate and the specific regulations that you’ll need to adhere to.
• Staffing and Payroll ($50,000 – $150,000): You will need to hire and train ride operators, maintenance staff, and other support personnel, with payroll expenses varying based on the size of your operation and the length of each event season.
• Marketing and Advertising ($5,000 – $50,000): You will need to allocate funds for marketing campaigns to promote your carnival rides, which may include social media advertising, local promotions, and event partnerships to attract visitors and increase bookings.
• Maintenance and Repairs ($10,000 – $50,000): You will need to budget for regular maintenance and repairs to ensure all rides remain safe and fully operational, which will include routine inspections, part replacements, and preventative upkeep to address any potential issues before they impact operations.

Note: Keep in mind that some states may require you to post a bond as part of the licensing process, which will act as a guarantee for meeting safety and operational standards.

Earning Potential

Carnival ride businesses typically have strong earning potential, with most operations achieving profit margins of 30% or more and generating a high return on investment, particularly when considering the additional high-margin revenue streams that go beyond ticket sales.

The reason behind this profitability lies in the business model: the rides serve as the main draw, attracting visitors into a self-contained environment where they are likely to spend on food, beverages, and souvenirs — all of which contribute more substantially to profits than the rides themselves.

You can think of the rides as magnets that draw people in, much like how an entertainer or popular singer would attract a crowd. That said, it’s important to be mindful of factors outside of your control that can influence your profitability.

Seasonality, for instance, can significantly affect attendance rates, as visitor numbers often fluctuate with weather conditions and the timing of local events, which can impact your revenue stream throughout the year.

Additionally, as previously discussed, carnival ride businesses require a significant initial investment to establish operations, which can create a high barrier to entry, making it challenging for new entrepreneurs to enter the market.

7 Steps to Starting a Carnival Ride Business

In order to start a carnival ride business, you’ll need to complete the following steps:

1. Planning Your Carnival Ride Business
2. Registering Your Business
3. Securing Funding (If Applicable)
4. Finding the Right Location
5. Setting up Business Accounting
6. Getting all Applicable Licenses and Permits
7. Obtaining Business Insurance

We’ve broken each one of these down in more detail below.

Still exploring your options? Check out other small business ideas.

Step 1: Plan Your Carnival Ride Business

Before diving into your carnival ride business, you’ll need to spend some time conducting thorough market research to understand where your business will fit and how it can stand out.

You should start by analyzing the market demand in the area where you plan to operate, considering factors such as local demographics, popular community events, seasonal trends, and the presence of existing competitors.

You will also need to consider the logistics of your operations, such as potential locations for your carnival, whether you will operate seasonally or year-round, and how to manage staffing and maintenance effectively.

This will help you evaluate the financial viability of your project — including projected revenues and expenses — and create a solid basis for future growth and sustainable profitability.

Finding a Suitable Name

Choosing the right business name is both important and challenging.

This is because your name will need to be eye-catching, memorable, and (at least somewhat) related to your industry.

If you don’t already have a name in mind and need help, you can visit our How to Name a Business guide or use our free Business Name Generator tool.

If you do have a name in mind, we recommend researching the following:

• Your state’s business records
• Federal and state trademark records
• Social media platforms

You will also need to make sure that your business’s name is available as a domain — this is your website’s URL address.

Note: If you’re planning to operate a sole proprietorship, you might want to operate under a business name other than your own name — known as a “Doing Business As” (DBA) name. Keep in mind that this is not recommended for a carnival ride business.

Managing Seasonal Revenue Cycles

Carnival ride businesses often experience distinct seasonal revenue patterns, with earnings peaking during warm-weather months and major holidays but dropping significantly during the off-season.

This can create a cash flow challenge, as most fixed expenses — such as equipment maintenance, insurance, storage, and core staff salaries — remain constant throughout the year, regardless of revenue fluctuations.

This disparity means that you’ll need to ensure that you have adequate cash reserves built up by strategically saving during the high-earning months.

A good approach to achieving this is to set aside a percentage of your earnings — such as 20% — as soon as you receive your revenue, saving that amount for use during the off-season.

Another way to build your cash reserves is to create off-season attractions or events that draw in visitors even during slower months, helping to maintain a steady stream of income.

This could include hosting themed events, partnering with local businesses for joint promotions, or offering unique experiences that encourage community engagement and repeat visits.

Creating a Detailed Business Plan

A detailed business plan is essential for outlining your business strategy, securing funding, and mapping out your carnival ride business’s path to growth and profitability.

When drafting one, be sure to include an executive summary, market analysis, organizational structure, product offerings, pricing strategy, and financial projections.

Remember to include as many relevant data points, research insights, and concrete examples as possible to support your claims and demonstrate the viability of your business model.

The more comprehensive and data-driven your plan, the better equipped you’ll be to make informed decisions and attract potential investors.

For more information on this step, you can have a look at our How to Write a Business Plan guide.

Step 2: Register Your Business

One crucial aspect that cannot be overlooked when starting your carnival ride business is the importance of establishing a solid business foundation. While sole proprietorships and partnerships are the most common entity types for small businesses, they’re a far less stable and advantageous option than LLCs.

This is because unincorporated business structures (i.e., sole proprietorships and partnerships) expose you as an owner to personal liability for your business’s debts and legal actions, while LLCs protect you by keeping your personal assets separate from your business’s liabilities.

In practice, this means that if your carnival ride business were to face a lawsuit or incur any debts, your savings, home, and other personal assets could not be used to cover these costs. On top of this, forming your business as an LLC also helps it to appear more legitimate and trustworthy.

Note: If you’re interested in more information before getting started, we recommend having a look at our How to Start a Business guide (DIY) or our in-depth Best Business Formation Services review (for those opting for a professional service).

Step 3: Secure Funding (If Applicable)

Nearly every business, especially in the early stages, will require some level of financing to get off the ground, with the most common options available being:

• Small Business Administration (SBA) loans
• Traditional bank loans
• Private investors
• Angel investors
• Crowdfunding campaigns

Having said that, it’s important to approach financing with caution and ensure that you only take on debt that is manageable and aligns with your business’s revenue potential.

This is because high-interest payments can significantly eat into your profit margins, and over-leveraging can leave your business vulnerable during inevitable challenges, such as poor weather conditions that lead to reduced attendance.

Of course, the extent that this step will be applicable to you will depend on your individual financial situation.

Step 4: Find and Secure the Right Location

The next step you’ll want to take is to find (and secure) the right location for your carnival ride business.

The ideal site should be highly visible, easily accessible, and spacious enough for your rides and attractions, creating an inviting atmosphere that encourages passersby to stop and enjoy the carnival experience.

To identify the best locations, you will need to create a comprehensive list of available spaces in your target area, taking into account factors such as the:

• Size and layout
• Parking availability
• Local demographics
• Power and utility access
• Permit requirements
• Setup and teardown logistics

Once you have identified the most promising sites, you will need to engage with property owners to negotiate a lease agreement.

Step 5: Set up Business Accounting

Recording your various expenses and sources of income is critical to understanding the financial performance of your business.

To do this, you will need to organize your finances into distinct categories, such as:

• Ride ticket and wristband income (e.g., individual tickets, daily passes, season passes)
• Game booth and attraction revenue (e.g., skill games, arcades, specialty attractions)
• Food and beverage sales (e.g., concessions, vendor partnerships, specialty items)
• Equipment maintenance costs (e.g., ride repairs, preventive maintenance, spare parts)
• Insurance premium expenses (e.g., liability coverage, property insurance, worker’s compensation)
• Staff wages and benefits (e.g., operators, maintenance crew, security personnel)
• Marketing expenses (e.g., advertising, promotional materials, social media)
• Permit and licensing fees (e.g., operating permits, food service licenses, safety certifications)
• Site rental expenses (e.g., venue fees, utility hookups, space rental)

This should provide clear visibility into your business’s financial performance and aid in accurate cost analysis.

Step 6: Secure All Required Licenses And Permits

The applicable licenses and permits you’ll need will largely depend on your state and local regulations.

Even so, we’ve compiled a list of some of the common licensing regulations that you’ll likely need to satisfy in order to operate legitimately:

Business Operation Licenses

At a state level, your carnival ride business will most likely be required to obtain a business license in order to operate — though this will depend on your location.

This process generally involves submitting an application, paying a fee, and meeting specific state requirements.

Amusement Ride License

In some states, you’ll need to obtain an Amusement Ride License in order to operate your carnival ride business legally.

To obtain it, you will need to have each ride inspected — typically by a certified safety inspector from a state-approved agency — in order to confirm that it meets local safety standards.

This inspection will generally include checks on the ride’s structural integrity, safety features, and maintenance records.

Zoning and Land Use Permits

Before establishing a carnival ride business, you’ll need to ensure that the land is zoned appropriately for a commercial recreation business.

Zoning regulations vary by locality and dictate the types of activities that can be conducted on a piece of land. In some areas, you may need to obtain a special use permit or a variance if the land is not already zoned for your intended use.

We recommend consulting with your local zoning authorities in order to understand the specific requirements and restrictions that will be applicable to your carnival ride business. Alternatively, you can consult with a business attorney if you want someone else to take care of this for you.

ADA Compliance

The Americans with Disabilities Act (ADA) requires all businesses open to the public, including carnival ride businesses, to be accessible to individuals with disabilities.

You will need accessible routes to and around rides, providing ramps and landings that meet specific gradient requirements and removing any barriers that could prevent access to ticketing areas, restrooms, and other amenities.

Keep in mind that compliance with ADA standards is not only a legal requirement but also ensures that your facility is inclusive and welcoming to all patrons.

Step 7: Secure Business Insurance

In addition to securing the necessary permits and licenses, you will need to obtain the right business insurance.

Note

Even if you form an LLC, purchasing business insurance is still a good idea. This is because an LLC structure protects your personal assets, not your business’s.

While specific coverage needs may vary based on factors such as location, size, and unique risks, there are several key types of insurance that most carnival ride businesses should consider.

We’ve briefly outlined these below.

Amusement Ride Liability Insurance

Amusement ride liability insurance is a specialized policy designed specifically to cover incidents related to the operation of amusement rides, protecting against claims that may arise from ride malfunctions, operator errors, or injuries occurring on the rides themselves.

The cost of this coverage varies widely, typically ranging from $100 to $500 per month depending on factors like the number (and type) of rides, as well as the coverage limits in question.

General Liability Insurance

General liability insurance is a foundational coverage that’s essential for carnival ride businesses because it protects against claims of bodily injury, property damage, and personal injury that may occur on your premises.

The average cost for general liability insurance according to recent data is $42 per month, or $504 annually, though costs can vary based on your business’s specific needs and risks.

Commercial Property Insurance

Property insurance is essential for safeguarding your carnival ride business’s physical assets, such as the rides, ticket booths, equipment, and storage facilities.

The median cost for business property insurance is approximately $63 per month for plans with a $1,000 deductible and a $60,000 policy limit.

Having said that, rates can vary significantly based on factors such as your location, risk profile, and the value of your commercial property.

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How to Start a Carnival Ride Business FAQs

How much do Carnival Ride Businesses make?

Carnival ride businesses generally make anywhere from $100,000 to $500,000 per year, though this varies significantly based on factors like the location, event frequency, and the variety of attractions offered.

Keep in mind that while ticket sales often provide the largest income stream, additional sources — such as food and beverage sales, game booths, and merchandise — contribute substantially to profitability, making high-traffic, multi-attraction setups especially lucrative.

How do traveling carnivals make money?

Traveling carnivals typically generate income from ticket sales for rides and attractions, as well as high-margin sales from food, beverages, and games.

In addition, it is not uncommon for carnivals to supplement their revenue by renting booth space to local vendors or partnering with sponsors, allowing for additional income streams beyond their primary attractions.

How to start a small carnival?

To start a small carnival, you will need to conduct market research, secure funding, and obtain all necessary permits and licenses required for operation.

Once that is completed, you will need to invest in a selection of popular rides and attractions, set up food and game booths, and develop a marketing strategy to promote your event and attract visitors.

Where do carnivals make the most money?

Carnivals make the most money from high-margin game booths and food sales, where profit margins can far exceed those from ride tickets.

This is because games generate substantial revenue by encouraging repeat plays, while food stalls benefit from impulse purchases driven by the enticing aromas and vibrant displays that attract attention as visitors enjoy the carnival atmosphere.