i checked out your webpage. I love your luffy puppet!

It sounds like in your position there's a couple of things you need to do. You basically want to run what is essentially 2 businesses in 1. A puppet design studio, and a performance group. Ambitious for sure, that's awesome! My first suggestion would be to take a few hours and work up a business plan. This way you will have a much tighter grasp on what each portion of your idea will cost you, and be able to set things up in stages.

Even with a small amount of seed money you could get a few characters for your performances, build your own stage for a fraction of a pre-made one, and be on your way doing local gigs. Then the money you make from that can start funding the collection of supplies. Like Billy mentioned with his loan, $1500 got him started but he's still buying supplies on a regular basis.. That part is neverending!! Having the ability to generate money from early performances will get you some cash to build up the supplies and tools you will need. Because there will be tons of supplies to get your hands on!!

As far as the building is concerned. Do you plan on building 1 of a kind custom characters for people, or do you plan on making say dozens of smaller hand puppet versions of your main performers? That can greatly shift the start-up costs too. You wanted to leave puppets behind places. Make sure to leave things like scripts, songs, etc. behind as well so the people you are training have some start-up materials to begin with themselves. All the more reason for a business plan since those expenses of left behind items need to come from somewhere.

Websites are essential. Google Places listing is free, tons of online directories are free to list your website on to get some basic starting backlinks. Add a Twitter account for good measure too, link it to the site. Post progress pics, performance pics/vids, etc. Document your process, people love the 'behind the scenes' type of thing, and it shows the work and dedication to your craft.

Hope that helps a little more You can do it!!

And use Facebook!

I agree with the others, start small and build bigger! I wish you lots of luck with it - I'd love my own puppet studio too.

Thanks everyone, that is some great starter advice.

I dont rememeber if anyone mentioned this but one of the things i did was write custom shows to suit what market i was going for. I approached the schools said i would like to write a show that supported something they were teaching. It didnt always work but when your willing to accomidate a need like that sometimes they are more open.

Thanks DrPuppet. I will try that suggestion. Sorry for such a late reply, I've been really busy with my other job.

I'm on my phone not my computer and hope this makes sense. 
1. You really need to hook up with puppeteers in your area. OWS does Ifest in IL and this year doing MAX in OH. There is a Vent fest up there somewhere. Kidmin and Group are both doing things up there and OWS does either a spring or fall fest. I think there is more in the Midwest for puppetry than anywhere else

I would search for a church that is open to puppets and shares your vision. Why? They will have resources (people,  contacts, money).
That is a starting point. I think you have to break your vision into pieces and attain them one or two at a time. Otherwise you set yourself up for burnout.

Very good advice thank you. I have been doing stuff with local charities and that is getting my name out there. Quick question, to make all of this legal, does anyone have a suggestion if not for prophet or LLC is better?

I think it depends on what you want to do. I think if you are looking for grants you almost have to go not for profit. A LLC is to protect you personally and your property so you can't be sued direct because of something that happens with the puppet business.  Of course this is just a laymens opinion. You really need to meet with a lawyer to determine what you need in your area or really do your research of what is best locally.