How to Start a Fireworks Tent Business

Starting a fireworks tent business can be an exciting and rewarding business venture for entrepreneurs who are passionate about popular national celebrations and want to provide a memorable experience to their customers.

Having said that, you should keep in mind that launching a successful fireworks tent business requires careful planning, significant investment, and a wide range of skills.

In this comprehensive guide, we’ll walk you through all the essential steps you’ll need to take to start your own fireworks tent business, from finding a suitable location and purchasing inventory to obtaining licenses, setting up operations, and attracting customers.

Ready to turn your business idea into a reality? We recommend forming an LLC as it is the most affordable way to protect your personal assets. You can do this yourself or with our trusted partner for a small fee.

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Industry Overview

The fireworks industry in the U.S. has consistently seen significant growth, with consumer fireworks revenue alone increasing from $636 million in 2010 to $2.2 billion by 2023.

This surge is primarily being fueled by the rising popularity of personal fireworks displays for holidays like the 4th of July and New Year’s Eve, as well as regulatory changes that have expanded access to fireworks in many states.

Startup Costs

If you’re considering whether a fireworks tent 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 fireworks tent business?

Well, it depends. The initial investment for a fireworks tent business varies widely based on factors such as the scale of your business’s operations, its inventory size, and the specific products it offers:

• Fireworks inventory will make up the largest portion of your startup costs. In fact, depending on the variety and quantity of fireworks you intend to sell, you can expect to spend anywhere between $5,000 and $20,000 on this alone. This should be enough to be a wide variety of products (e.g., sparklers, aerial fireworks, firecrackers, etc) for your store — especially considering the many discounts offered by wholesalers for bulk purchases.
• Tent and equipment rentals are another significant cost to bear in mind when looking to start your fireworks tent. Rentals will typically cost between $1,000 and $3,000 depending on the size, quality, and duration of the tent. However, if you decide to buy one instead, it can range from as little as $500 to $2,000 for a small to medium sized tent up to between $6,000 and $15,000 for a heavy-duty commercial tent. Additional expenses for tables, chairs, signage, lighting, and point-of-sale systems will likely add another $500 to $1,500.
• Licensing, permits, and insurance will also take up a substantial portion of your initial budget due to the inherently hazardous nature of fireworks — which necessitates their strict regulation. In total, you can easily spend between $1,500 to $4,000 on local sales permits, temporary tent permits, fireworks-specific licenses, and the various types of insurance you’ll need.

In addition to these upfront costs, it’s important to bear in mind the ongoing costs associated with running this type of business. For a fireworks tent in particular, the main ones you’ll primarily be faced with include restocking your inventory, insurance premiums and license renewals, and tent and equipment rental.

However, if you decide to scale up your operations and hire any employees, these will also represent a significant portion of your ongoing costs.

Earning Potential

Fireworks tent businesses have the potential to earn significant profit margins by buying fireworks in bulk from suppliers and then selling them piecemeal to customers; this — combined with high seasonal demand — will form the core of your earning potential.

More specifically, your business will primarily thrive around key events like the 4th of July and New Year’s Eve. However, this does present the challenge of how to handle unsold inventory once the 4th of July has passed. Since fireworks sales tend to plummet outside of peak holidays, it’s critical to manage your stock carefully.

That said, while this business is highly seasonal, you shouldn’t worry too much about leftover inventory as long as you plan to keep running. Since fireworks generally store quite well (if they’re kept in a cool, dry place), you can easily sell any remaining products the following year without a loss in quality or safety.

Due to the fact that many people wait until the last minute to purchase fireworks for their celebrations, sales will often surge in the weeks (and especially the final days) leading up to the 4th of July.

In order to boost profits, many fireworks tent owners choose to sacrifice their own July 4th celebrations by staying open for last-minute customers. By catering to these spontaneous buyers, you’ll likely see a noticeable increase in sales, ensuring you maximize your earnings during the busiest time of the year.

8 Steps to Starting a Fireworks Tent Business

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

1. Planning Your Fireworks Tent Business
2. Registering Your Business
3. Setting Up Your Taxes
4. Find a Suitable Location
5. Purchase Inventory and Supplies
6. Setting Up Your Fireworks Tent
7. Getting all Applicable Licenses and Permits
8. 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 Fireworks Tent Business

Before diving into your fireworks tent business, you’ll need to spend some time conducting thorough market research.

This can involve analyzing the local market to understand the demand for fireworks, identifying potential competitors, and assessing the target demographic.

This will help you evaluate the financial viability of your project — including projected revenues and expenses — as well as determine the best location for your business.

Finding a Suitable Name

Choosing the right business name is both important and challenging.

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 Fireworks Tent Business Name Generator tool.

If you do have a name in mind, we recommend researching the following to confirm it’s available:

• 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 fireworks tent business.

Develop a Marketing Strategy

Effective marketing is key to growing your customer base. However, due to the unique nature of a fireworks tent business, you’ll need to adopt more traditional methods of marketing.

Since fireworks are heavily regulated, shipping them is often prohibited or highly restricted in many areas, making an online-only business less viable — as a result, physical advertising is far more likely to be effective.

There are a number of reasons this is the case, the first of which is that, when people are out and about and they see your physical signs or banners, they’re able to act immediately by visiting your tent. Since they’re nearby — and often already in the mindset to purchase — customers are more likely to be receptive to your advertising.

Another important factor is that fireworks are often an impulse purchase, especially around holiday events. People driving or walking by a fireworks tent are more likely to make a stop if they see clear signage or eye-catching displays. By contrast, online ads may reach people who are interested but then disappointed when they realize they can’t order fireworks for delivery due to legal constraints.

Finally, physical advertising can help build anticipation within the community by making people aware that they need to visit your tent for their fireworks needs. This is an especially useful tactic on customers who might otherwise wait until the last minute to make a purchase as it acts as a reminder.

Step 2: Register Your Business

One crucial aspect that cannot be overlooked when starting your fireworks tent 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 — especially when it comes to fireworks tent businesses (with potential liabilities and debt).

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 fireworks tent 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 state-specific How to Start an LLC guide (DIY) or our in-depth Best LLC Services review (for those opting for a professional service).

Step 3: Set Up Your Taxes

The next step you’ll need to take is to register your business for taxes. To this, you’ll need to obtain an Employer Identification Number (EIN), which you can think of as your business’s Social Security Number.

If you form your LLC through a specialized LLC formation service, this will likely be already handled for you in exchange for a small additional fee.

Even so, it’s important to make sure that you fully understand your business’s tax obligations; since these can depend on your location, it’s a bit difficult to accurately break down exactly which taxes you’ll be subject to.

Nevertheless, most businesses will typically be subject to income tax, sales tax, and employment taxes at the federal level. Fireworks tent businesses in particular will also likely need to pay excise tax for the sale of this product, as well as payroll taxes if they have employees. Additionally, your business may be required to pay local city or county taxes on top of this, depending on where it’s based.

Due to the complex nature of business taxes, we always advise our readers to seek the help of a professional accountant or business attorney for this step.

Recommended: Book a free consultation with our trusted partner, 1-800Accountant to potentially save both time and money.

Step 4: Find a Suitable Location

Securing the right location for your fireworks tent is critical to the success of your business as it will directly impact the visibility of your tent and, consequently, the volume of customers it attracts.

As a result, you should aim to set up in a high-traffic area that has easy access for both drivers and pedestrians as well as ample available parking. Some good examples can be found near shopping centers, busy intersections, or large public gathering spots as they naturally draw crowds during peak seasons.

When selecting a spot, keep in mind that some locations may require additional preparation before you can set up your tent or stand. For example, the land may be uneven or cluttered with debris that means it needs to be cleared, leveled, or otherwise modified before you can safely install your tent.

It’s worth considering the level of work a potential spot may need before you can use it, as these added steps can be time-consuming and costly.

For this reason, it’s important to strike a balance between finding a prime location and minimizing the necessary extra work in order to simplify the process of starting up your fireworks tent and keep costs under control.

Step 5: Purchase Inventory and Supplies

One of the most important steps in starting a successful fireworks tent business is to obtain high-quality inventory and essential supplies.

While it may be tempting to invest in cheaper products, always try to invest in quality fireworks provided by a reputable wholesaler to ensure you satisfy your customers’ expectations — this is the best way to encourage repeat business.

To get an idea of the wholesalers and products you want to invest in, there are numerous supplier shows put on by manufacturers that you can attend each year. For example, the Pyrotechnics Guild International (PGI) hosts an annual week-long show in August in various cities across the country.

Alternatively, the conventions and tradeshows put on by the National Fireworks Association (NFA) are another great way to connect with distributors, exhibitors, and manufacturers in the fireworks industry.

Before selecting a supplier, be sure to check that the products they sell are compliant with local regulations, as many cities have strict rules regarding which types of fireworks can be sold.

In addition to fireworks inventory, you’ll need to source essential supplies to run your business, such as a tent, shelving, signage, fire alarms, and point-of-sale equipment.

Step 6: Set Up Your Fireworks Tent

With all your inventory and equipment ready, you’ll be ready to begin setting up your fireworks tent.

When setting up your fireworks tent, the layout and organization of your store can make a significant difference in attracting customers and boosting sales. A well-organized and engaging display not only makes it easier for customers to browse but also encourages impulse purchases.

When completing this step, we recommend adhering to the following tips:

• Product Placement: Make sure to position high-demand or items you make significant profit on at eye level or near your tent’s entrance to capture the attention of your customers immediately.
• Clear Signage: Using large, easy-to-read signs is a simple and effective way of allowing customers to easily navigate your tent and find the type of products they’re looking for (e.g., family-friendly, large displays, sparklers).
• Offer Bundles: By including product bundles near to where customers checkout in your tent, you can help to encourage last-minute impulse purchases.
• Engage Customers: You can include a QR code underneath each product you’re selling that takes the buyer to a YouTube video demonstrating what that firework will look like. This helps the customer to know what they’re buying and is highly engaging.

Smaller stores will need to set up each day, making sure to order and organize their stock in a clean and orderly layout. Larger stores with more valuable inventories may need to consider alternative options (e.g., security and cameras to watch over the store at night) as set up may take several hours each day, which becomes infeasible and can take away from your total selling time.

Step 7: Secure All Necessary Permits and Licenses

Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.

Seller’s Permit

A Seller’s Permit, which may also be referred to as a Sales Tax Permit, is a crucial requirement for any fireworks tent business.

This permit allows you to legally sell physical products and collect sales tax from your customers, which you must then remit to your state’s tax authority. Operating without this permit not only prevents you from lawfully collecting sales tax but can also lead to penalties and fines for non-compliance.

Fireworks Permit

In most states, it’s necessary to obtain some form of Fireworks Permit to be able to sell and store these regulated products. While the requirements for obtaining this permit can vary, you’ll typically need to apply through your city or state’s fire department or other regulatory agency.

Typically, this will require you to prove that your business is compliant with local fire codes and safety regulations, such as maintaining proper distances between your tent and other structures.

Temporary Use Permit

Temporary Use Permits are needed for any business to be able to perform activities or special events in an area for a limited period of time, as long as they don’t plan to construct or alter a permanent building.

Since fireworks tents are often temporary structures, many jurisdictions will require a temporary use permit to be able to set up and operate your tent in a specific spot (e.g., a parking lot or open space), for a set period such as the fireworks selling season.

Local Licenses and Permits

In addition to the standard state and federal permits required to sell fireworks, your business will also need to comply with various local regulations as each city or county has its own specific licenses and permits.

Below, we’ve included some of the key local licenses and permits you may need to obtain:

• Local Business License: In a large number of municipalities, you’ll be required to apply for a business license that’s specific to the local area.
• Zoning Permit: You may also need a zoning permit, which confirms that the location you choose for your fireworks tent complies with that area’s land-use and zoning regulations.
• Fire Department Permit: This confirms that your business meets safety standards for handling fireworks, such as proper storage, safe distances from other structures, and the availability of fire safety equipment like extinguishers.
• Police Department Permit: Some jurisdictions may require a permit from the police department to prove that proper measures are in place to prevent theft, manage crowd control, and maintain public safety during your business’s operation.

Each local government may have its own rules on where and how signage can be displayed, so it’s important to ensure compliance to avoid disruptions in your marketing efforts.

Step 8: Get 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 fireworks tent businesses should consider.

We’ve briefly outlined these below.

General Liability Insurance

General liability insurance is a foundational coverage that’s essential for fireworks tent businesses because it protects against claims of bodily injury, property damage, and personal injury that may be caused during the sale, handling, or display of fireworks at your tent.

An example of this might be if a customer trips over a display stand while shopping and suffers an injury, or a firework damages a nearby vehicle during a demonstration — in either of these cases, general liability insurance would cover the costs.

The average cost for general liability insurance according to recent data is between $50 and $150 per month, or between $600 and $1,800 annually, though costs can vary based on your business’s specific needs and risks.

Property Liability Insurance

Due to the inherently hazardous nature of fireworks, it’s essential that your business invests in product liability insurance to ensure that it’s adequately protected.

This coverage will provide your fireworks tent business with protection from any claims related to injuries or damages caused by the products it sells. For example, if a firework malfunctions and causes injury to a customer, this insurance could prevent your business from being held responsible.

While it can vary depending on the specific situation of your business, you can typically expect to need to pay between $100 and $300 per month for this insurance coverage.

Commercial Property Insurance

Commercial property insurance is essential for safeguarding your fireworks tent business’s physical assets.

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 business’s location, risk profile, and the value of the property in question.

Ready to Get Started?

How to Start a Fireworks Tent Business FAQs

What are the costs involved in opening a fireworks tent business?

To start a fireworks tent business, you’ll need three essential things: a tent or collapsible structure, the fireworks themselves, and money for staffing (and potentially security) during the season.

However the cost of each of these can vary greatly depending on what you choose to invest in. For example, investing in a more durable tent may cost more upfront but less in the long run than replacing a cheap one each year.

Who is the target market?

The primary market for a fireworks tent business is individuals and families planning events for celebrations like 4th of July or New Years Eve.

Depending on what your state allows, your customers can range from families seeking smaller, family-friendly items to adults looking for larger, more dramatic displays. Due to this, it’s imperative that you offer a variety of fireworks at different price points so that you cater to different needs and budgets.

How does a fireworks tent business make money?

Fireworks tent businesses make money by purchasing fireworks in bulk at discounted rates and selling them individually to consumers.

In this way, acting as a middleman between suppliers and customers allows for significant profit margins. However, success often depends on effective marketing, location, and understanding customer preferences, all of which can significantly boost sales during peak holiday season.

Are firework businesses profitable?

If run correctly, firework businesses can be highly profitable — especially during peak seasons like the 4th of July and New Year’s Eve.

Profitability comes from purchasing fireworks in bulk at lower prices and selling them on to consumers at a significant markup. However, this can vary depending on your location, marketing, inventory management, and planning.