Charter Business Help - Young Entrepreneur

Vinn,

You can become moderately wealthy owning a boat and running a private charter business.

As long as you start out as filthy stinking rich before getting into the above.

That is very true.

You may find it harder than you first imagined making a profit in your first year. As a beginner do you have any idea about the setup and operational costs of owning and chartering a yacht in the size range you are looking at?

Are you going to operate it yourself or offer bareboat charters?

I would suggest doing some more research regarding competition (other charters/boat clubs etc) as well as the true cost of owning and maintaining a boat. For instance, owning and using my 42' Tiara roughly 150 hrs/year costs us approximately $31k/year to maintain and enjoy (insurance, dockage, storage, fuel etc). This doesn't include any unforseen large expenses or a note. Lastly, you will either need to get your USCG captains license yourself (sea time may be an issue here) or hire a licensed captain to run the boat which will eat up a lot of your "profit".

Max

Google "Starting Charter Boat Business".

You keep talking about being an accountant, which in no way prepares you at all for the business.

Now, I see you're just talking about a boat rental. Look at the hundreds available at various sites in South Florida.

Here's another thread here on the subject.

http://www.yachtforums.com/threads/buying-a-yacht-to-charter-make-a-profit.7165/

A $30k boat? A 30' boat for charter? No, to both. No one charters a 30' boat in South Florida and no one charters a $30k boat. Some do rent boats like that but only to recover a little of their costs, not for profit.

Do you have any idea the operating costs? The cost of insurance? The cost of docking?

You talk about owning the business, but then you say the boat will be completely financed. Sounds to me like the bank will own it then and they'll be the only ones making a profit. As an accountant, you should learn that businesses 100% financed fail at least 95% of the time. No equity in the business, no profit.

You are very much confusing revenues with profits. Saying you collect $400 per day is far from making $400 per day. Let's toss some numbers and say you rented it 50 days a year at $400. That's $20k revenue less $1.5 interest on your loan, less $5k dockage, less $5k maintenance, less $5k insurance, less $1k tow coverage, less repairs of damage to the boat of $2k, less replacing things like life jackets etc on the boat $1k, less any advertising or promotion for another and you get the picture.

Oh, and add in the suits and charge backs from those who take it out, have to be towed back in and their kids are scared and they are furious.

A rule of thumb. Don't get into a business you know nothing about. You want to open a business? Develop your accounting skills and then open your office. You wouldn't encourage someone with a boat and no accounting background to open an accounting practice would you?

Doesn't include any financing charges etc. Our summer slip/winter storage is roughly $4k each, we burn a fair amount of diesel roughly 5k/gal per season then insurance, transient slip fees etc and regular maintenance items (washes/wax, fluid/filter changes etc). Things add up quite fast...

After having once managed and maintained a charter business for almost 15 years, I'd say you have just been given some very good advice.

Read it a few times and let it digest before you spend any money.

There is NO WAY you can turn a profit with that business model, those rental fees and that type of boat. A Captain goes for a minimum of $300 per day. The daily rate is way cheap, but nobody wants to rent a beat up 30' boat. Fuel is another consideration that is way under estimated, but the rentee should be paying for the fuel they consume, repairs will eat you alive on a boat like that and break downs, of which there will be many in that price/size/age boat will finish driving the nail in the coffin. The only boats I see in that size range turning a profit down here are tour boats with lots of people on them, water taxi's, dive boats, etc. But all of those markets are pretty saturated.

You would have a much better return and make a living by buying/financing a $30k car and becoming an UBER driver.

You presented it as a business idea, asked for opinions. My opinion is it's a horrible idea. As long as you have other means of paying the debt on the boat when it all fails, then go for it. In my opinion, it's got no potential as a business.

As to niche, I've seen people pursue non-existent niche's regularly. There are plenty of small boats advertised for rent by owners but they are not seeking to be profitable or self sustaining, just to cover some of their costs.

You got my thoughts and my recommendation for finding other things to read on the subject. Now, you can choose whether to listen to or ignore advice you receive. You came to this forum and the advice has been overwhelmingly in favor of this having poor prospects as a business.

I repeat that you have no idea what you're getting into, but there's only one way you'll ever believe that so go for it. Just don't risk anything you can't afford to lose.

The boat will not pay for itself. After expenses there will not be a single dollar left toward paying for the boat.

There is NO WAY the boat will pay for itself. Not even close and not at anywhere near the prices you are planning on charging. I've been in this industry over 25 years now in various forms from assistant dockmaster in a marina, to owning a commercial fishing boat, to being a full time captain to owning a very successful yacht management business and being a very highly respected delivery Captain. I'm telling you from my vast experience, as others are, that your business model will not work and the price you plan on charging will not pay the bills, let alone the maintanence.

Back when I had my commercial fishing business, live-bait (pilchards and goggleeyes) and was using the boat as much probably more than as you plan on renting it, I was spending well North of $10k a year back in early 2000s maintaining a new 24' Carolina Skiff with a 90HP Mercury which is about as bare bones as you can get maintanence-wise. Bottom job, engine servicing, this breaking, that breaking, keeping the boat waxed, and on and on. Not to mention I was doing most of the work myself.

You came on here for advice. Just about all of the advice has come from members who have spent more time just sitting on the head in a boat than you have on one, have all given the same advice, yet you want to argue with everyone. Why ask for advice?

No, you just can't win with your business or business plan. It will not work. It will not be successful. You can try, but honestly will fail miserably. That is the truth. There are many rental places already renting those types of boats, but they have a fleet of them, and mostly are only making money because they've sold X amount of annual memberships at X amount of dollars per year. At $400 per day, you won't cover maintanence costs.