What is a charter boat if you can’t enjoy it at sea and get paid for it at the same time? Read this boater’s guide to starting your own charter business.
1.4 billion people participated in international tourism in 2018. That massive number was reached two years earlier than experts had predicted.
With the rise of tourism has come a lot of money flowing into tourism-targeted businesses. One of the biggest beneficiaries of that influx of cash has been the boating industry.
Think about it… If tourists are traveling to warm-weather destinations, what’s one of the top things that they’ll want to do? Get in the water!
That leads many tourists to ask “What is a charter boat?” and eventually book one’s services.
If you’d like to cash in on tourism-driven charter boat demand, keep reading. Below, we step prospective boat entrepreneurs through broad steps on how to start their own boating business!
If you live in an area where the weather is bad for nine months out of the year, a charter boat business isn’t going to be viable. The same is true if you don’t get any tourists in your area.
There are, of course, exceptions to this rule.
For example, boats are chartered in Antarctica to see cold-weather features like glaciers. Boats are also chartered in non-tourist towns if boat travel is required to get to certain areas where locals work or collect resources.
Bottom line: Make sure that your area stands a reasonable chance of getting customers that are interested in boat travel for the majority of the year before proceeding.
Suspecting that you can run a successful charter boat business isn’t the same as actually running one successfully. To make sure that your suspicions are reasonably accurate, you’ll need to draw up a business plan.
Your business plan should include things like all of the expenses that are involved with running a charter boat business (gas, insurance, boat payment, maintenance, etc.) and how much you’ll need to charge per hour in order to offset those expenses and claim a profit. You’ll also want to survey other boat businesses in the area to determine what they’re charging, how much business they’re doing and what you can reasonably expect.
Do not skip creating a business plan as you launch your venture. A little bit of homework can save you a whole lot of money and heartache down the line.
There are a lot of different charter boats out there. Which one you choose is going to depend on what your projected customer looks like and how much money you have.
If you think that the majority of your customers are going to be people going out on fishing trips, you’ll want to make sure your boat has features like fishing rails, tanks for caught fish and other fishing necessities. If your intention is to charter 100+ people that want to enjoy corporate outings, your boat should be outfitted with sprawling decks and a commercial kitchen.
Understand what your core customer’s needs/wants are and do everything that you can to accommodate those preferences with your boat.
Your boat payment is going to be one of the most expensive aspects of your business. You’ll have to determine if it makes more sense financially to rent or buy your vessel.
Boat loans can be taken out to buy a boat which should prove to be cheaper and more flexible than leasing over the lifespan of your business. On the other hand, leasing allows you to run your business with a lower commitment since you don’t actually own your boat. It could also get you into a nicer vessel than you could afford to buy.
Like any small business, before you’re ready to set sail, you’ll have to let Uncle Sam know what your intentions are. The best way to do that is to head over to the IRS website and register your company.
Starting out, you could register your charter boat business as a sole-proprietorship which is the simplest form of business classification. Be aware that sole-proprietorships do present certain liabilities if you’re sued. For added protection, talk to a business lawyer or your accountant about how to register as an LLC and if that’s an appropriate course of action.
With your company registered and your boat purchase in-progress, you’ll want to have a dock picked out where you can keep your boat and pick up passengers. To ensure that you’re able to attract as many customers as possible, you’ll want to select a dock that’s liable to attract tourists. That might mean paying a little bit more but believe us when we say that the extra money is well worth the investment.
Some docks will offer discounted rates if you lease long-term as opposed to renting a slip month to month so be sure to inquire about special rates before committing to anything.
You’ve done the hard stuff in getting your boat, dock, and business ready to set sail. Now it’s time to start attracting customers through marketing.
There are a ton of ways that you can let customers know you’re open for business. You could take out Facebook ads, put up posters around your dock, write blog posts that answer common questions like “What is a charter boat?”, “How much do charter boats cost?” and more.
Just be sure that building a website and allowing people to book your services online is part of your marketing to-do list. A charter boat company without a website in today’s world is one that’s not going to stay afloat for long.
You now know how to launch a charter boat business. With that education in place, ask yourself, what is a charter boat business’s value to your life?
If you think that running a boat business could make you happier and more financially stable, set sail! If you’re not sure, keep your aspirations anchored and keep thinking.
For more tips on all things self-employment, check out more of the content on our website!