Sergei Sychev was born in Moscow, Russia and immigrated to the US in 1979. After high school in Orange County, he moved to Los Angeles to attend UCLA. Out of college, Sergei entered the corporate world as a stockbroker and followed this with a series of other suit-and-tie jobs that committed him to a 9-5 work week.
A business born of bruises (literally and otherwise)
Sergei started Planet Bouncy in 2008, right in the thick of the Great Recession.
He was working for a consulting firm that, like other businesses, was going through a tough transition. Eventually everybody, including Sergei, got laid off with a short severance package.
Before this, he was a manager at the firm and had noticed that one of the guys he managed kept coming in the office on Mondays with bruises on his hands. Sergei asked him about the bruises and learned that he was working weekends for a rental company that specialized in kids’ equipment. He showed him the type of stuff he was delivering and Sergei immediately fell in love with them.
Out of fascination, Sergei purchased a few products using his credit cards and put them in a storage space. Without a single customer, he hit the pavement, walking door to door handing out his new fliers and calling old friends and customers to see if they wanted to rent jumpers for their kids’ birthday parties.
The calls soon started coming. He made more big purchases out of pocket and on credit cards, maxing out his every available resource. Sergei even depleted his 401K which was his only savings!
“I didn't sleep for a year from the fear of bankruptcy,” - he told Timely Visit.
The business, however, kept growing. He expanded his list of inventory from inflatables to concessions, tables and chairs, games, balloons and the like.
“It seemed that even in a horrible economy, people were always willing to spend money on their kids so while everybody around me was losing jobs and complaining about not having money, Planet Bouncy was booming,” Sergei remarked.
What gap in the market was Planet Bouncy filing?
Sergei says that when he first started this business, he noticed that the local companies he was competing with tended to be small with limited offering and were poorly managed with little attention to customer service and good logistics, which he says is critical to this kind of business.
“They were notorious for unsanitary inflatables and no-shows to parties. They were also buying cheaper equipment that had a much steeper depreciation value than the more expensive, well-made and durable items.”
“The gap that I took advantage of was offering quality products that were clean and new, focused on a logistics system that maximized reliability, and offered excellent customer service with user-friendly policies. Our products required a higher initial capital investment but they sold themselves and had a much higher ROI.”
Bouncing to success right from the start
Planet Bouncy was a success from the very start. In the very first month of operation in August of 2008, Sergei had a total of only two orders and gross sales of only $358. A year later, in August of 2009, he had 41 orders with gross sales of just over $6,000. In August 2010 there were 69 orders with just under $13,000 in sales. This year August saw 165 orders with over $33,000 in sales.
Sergei revealed to Timely Visit that within a few months of operation, they were chosen by a very popular local mom's group called Peach-Head that recommended them to all their members based on the quality of their product and service.
Furthermore, in 2009, Planet Bouncy won a prestigious award from Los Angeles Magazine as a Best of LA company. The SBA also selected them as a national success story based on their growth and start-up success.
The business has maintained a near 50 percent annual growth rate in sales and total orders. They completed 2009, their first year in operation, with gross sales of just over $55,000 and 363 orders. This year, they are close to gross sales of $300,000 and orders nearing 1600.
And in October 2014, Planet Bouncy finally hit the $1 million mark in total sales since inception.
Sergei further disclosed that they have invested over $500,000 in new equipment and have increased their core product (jumpers) inventory to over 100 units ranging from regular size at a rental rate of $89 to signature pieces that cost over $10,000 and rent for $600 per day.
Planet Bouncy has gone from the two employees it started out with in 2008, Sergei and his good buddy who gave him a hand with deliveries, to over 15 regular employees this year.
What is behind the success of Planet Bouncy?
Sergei believes the most important factor in his success is the demographic he has chosen to do business with. “I cater to kids and there is a very reliable and steady economy for these types of services. People don't stop spending money on their children, regardless of the economic climate.”
He added that there is also relatively little competition in his market. “There is an abundance of businesses that do what I do but most of them are garage, mom-n-pop operations that are capable of very little market share. These outfits also run their businesses very poorly.”
“Sustainability over a significant time period is key to gaining new business; however, many businesses come and go within just a few years - some within only a few months,” he pointed out.
Sergei says the other keys to his success are as important as they are redundant: hard work, perseverance, commitment, timing, and a lot of luck.
What are Sergei’s future plans for Planet Bouncy?
Sergei believes Planet Bouncy's growth is still yet to plateau so he intends to stay focused on capital investment in new, core inflatable equipment.
He also plans to expand the business’ lines of inventory to include event rental equipment such as commercial size tents and a wide range of seating and hosting options such as chairs, tables, linens, dinnerware, lighting, etc and grow its operations in Orange County and San Diego
However, Sergei says his ultimate short term goal is to reach $500,000 in annual sales.
“Another exciting goal for Planet Bouncy is to open its first indoor center that would be open seven days a week and showcase our lineup of amazing inflatables in an indoor setting,” he added.
“Charging people for attendance during the weekdays would be completely new business model that could be a great boost to revenue and drive our rental business even higher.”
What challenges has Planet Bouncy faced?
Sergei told Timely Visit that the biggest challenge he has faced thus far has been getting credit and loans for the business. “Since 2008, and still to this day, banks are reluctant to give out money required for new equipment purchasing.”
“There was no easy access to capital besides the unconventional use of revolving credit lines, business profit, and the help of state backed institutions such as the SBA.”
Another big challenge has been cash flow through a cyclical year. “Cash flow had to be closely monitored through the slow months of winter when orders declined by 50 percent or more. To help us with this decline we had to boost our business with more seasonal items such as heaters.”
The other big challenge Sergei faces is finding the right people to hire to represent the company.
“Since most of them are actual delivery drivers, they are essentially the face of Planet Bouncy,” he said. “I had to hire the right people to be trusted to step into people’s homes and make a good impression. They also had to meet certain criteria that were required to get the job done.”
Sergei revealed that he is constantly recruiting and training new people, which gets expensive and takes up a great deal of time. “There is no shortcut though; it’s the nature of this business.”
What has Sergei learned from running Planet Bouncy?
The lesson Sergei would like to share with any potential entrepreneur out there is to avoid paralysis through analysis.
“There is an established “knowledge” in corporate America that everything must first be written down, analyzed, projected, incorporated, measured out, etc. The average business idea in our head stands very little chance on this platform,” he explains. “What does drive these ideas is passion and inspiration.”
“At the very beginning, I was simply inspired by seeing pictures of the amazing products that now drive my business; much like a kid’s eyes light up when he sees a toy on a shelf that he must have,” he shared about his own experience. “If I had first done due-diligence and cost analysis on this rental business I guarantee that I would not be where I am today.”
“Entrepreneurial ideas make very little business sense at first, which is exactly why no one wants to fund them. One has to just dive in and take the first steps on blind faith. The worst that could happen is actually not that bad, believe me,”
Sergei added.
“The consequences could be much worse if you don't try!”