Halloween has always been a busy time for the Fallenstein family. Jenice Fallenstein handcrafted costumes for all four of her children: Julie, Lisa, Heather and Tom. James Fallenstein went to great lengths to decorate the house and the yard. “It wasn’t just a couple of tombstones in the yard,” Tom Fallenstein remembers. “It was like 50 gravestones, a bunch of ghosts and a big scarecrow. It was always a big deal; our family definitely got into Halloween.”

The family still rallies around their favorite holiday — but now they have to mix a little work in with the fun of it.

Halloween became a business for them in 1992, when Julie and Lisa started renting some of the costumes their mom had made out of their garage. Nine years later, Tom started selling additional costumes online. By the end of 2005, the two online operations and the rental shop had merged — and the family’s love for costumes and Halloween festivities had turned into a business that is now known as HalloweenCostumes.com.

Everyone has an ownership stake in and plays a role in running both HalloweenCostumes.com and its sister costume-rental operation, CostumesGalore.net. Tom is the CEO and president; Julie Fallenstein-Johnson is executive vice president and works closely with the vendors and handles much of the buying. Jenice Fallenstein serves as the CFO and works with daughter Heather Fallenstein Madison, who is also a vice president, in the accounting department, rentals and returns. Lisa Fallenstein Holthaus owns her own photography studio (Elite Portrait Design) and contributes her photographic skills for shooting costumes and products; she also pitches in during the seasonal busy time. And James Fallenstein comes by to lend a hand whenever and wherever he’s needed.

In the beginning, that was all the staff they needed. But the business quickly grew beyond what the five family members could handle. It also grew beyond what was possible either in the Fallenstein’s home or in the 9,000-square-foot building on Front Street that they purchased in 2006.

Now HalloweenCostumes.com employs 40 full-time people year round; in the busy-ness that surrounds Halloween, they hire up to 200 additional employees. The business currently occupies 50,000 square feet of space at 1415 1st Avenue in Mankato, which is filled almost to capacity.

From Flappers to Transformers
In 2001, Tom Fallenstein invested $5,000 in flapper costumes. His sisters had been enjoying great success renting out the flapper gowns their mother had made, so he decided to try selling similar costumes online to help pay for college. The 30 orders that were placed that year were enough encouragement to do it again. “It was still just a hobby,” Fallenstein says. “It was just a college job.”

When Fallenstein graduated from Minnesota State University with a degree in computer science in December 2004, he decided to make it a bigger business. He increased both his inventory and his presence on the Web for Halloween 2005. But he didn’t increase his staff — he had only hired one other person to work with him. So when orders started pouring in, he recruited his sisters and his parents to help.

Tom and Julie laugh about that crazy Halloween season now. They show their employees the video they took that year, much of it recorded in the wee hours of the morning as everyone processed orders and packaged costumes for shipping. And they remember the lessons they learned during that time.

Although they’ve been able to better prepare for the busy season in the years since then, Fallenstein says they still learn something every Halloween.