Everyone loves a nice day on the boat out in the water. Whether you go out on your boat to fish or relax, a boat can be a nice place for individual relaxation as well as socializing with friends and family. As you go on vacation and may not have your boat with you, you might be interested in renting a boat. In fact, you may have rented boats on vacations in the past or even just for a nice weekend near your home. Considering the high prices of boat rentals, you may consider it to be a fairly profitable business.
If you are an entrepreneur and looking to start a business, you may have thought about your own boat rental business. Indeed, this business may be the best of both worlds, with a money-making opportunity and a way to continue your passion for boating. However, you might be wondering how you could make this dream a reality and the steps that you need to make your boat rental business a profitable one.
You have come to the right place. In this post, we will review the steps to designing your boat rental business, the steps involved in getting it off the ground, the responsibilities your business will have, potential sources of funding, and strategies to lead your boat rental business to success in this step-by-step guide. We will cover the following topics in this article in-depth:
Design Your Boat Rental Business
Now starts the fun part. The first step in starting your boat rental business is to think about what kind of boat rental business you want. Your boat rental company will have a certain purpose, and with that certain purpose, specific types of boats to suit the business idea. You will likely want one unifying idea for your boat business so you can control costs and market your boat rental business effectively.
Your start-up boat rental business will need at least one boat! You likely want more than one. You should think about what kind of boats or watercraft would help your boat rental services be successful. This might include jetskis for people on holiday who want to ride waves. Or, you might be on a lake or a river and think kayaks would be a better option. If your rental company is going to be located in an area with experienced sailors, then renting sailboats might be a possibility.
Your small business might also consider tapping into the fishing market by renting fishing boats to those who want to go fishing. A pontoon boat rental market might exist near a lake or really calm waters and be a great idea for someone looking for a more relaxed experience. Your new boat rental operations company might consider buying houseboats and renting them out as AirBnBs for people to stay in. The options are endless, but they do provide you with a variety of options.
Your successful boat rental company might not just depend on your renting out your boats for others to drive as your sole business. Your boat rental business might also offer options for prospective renters to instead charter through you. You could double as a boat charter business with the fleet of boats that you have. This can allow you to pick up more potential customers. You may even consider dipping into the yacht charter business, for example. This makes sense, as not all boat rental businesses will have renters as the people in charge of maneuvering the boat.
As you can see, there are a wide variety of options for the types of boats that you can have and the business purpose that you want to serve. Some of this will be limited by the bodies of water that you are intending on locating your boat rental business by as well as the markets that come there. In addition to the types of boats, you will need to decide on the types of fuel that they will have, including electric boats, gas-powered boats, or others.
Your start-up costs will ultimately depend on your choices in designing your boat rental company. However, your new business is likely to benefit from new and unique boat rental services in your area because they will face less competition from rental boat companies in the rental industry near you. Moreover, a well-selected business design can help your own business become even more successful and attract customers who boat rental companies may have traditionally struggled to reach.
Write a Business Plan
Now that you have your business purpose and basic details in mind, you are ready to start writing the business plan for your boat rental business. A business plan can help you determine if your boat rental business idea will likely work in your community and solidify your business model. By doing your research you can help to make the business venture less risky for yourself and your potential investors. Moreover, a business plan can help guide you through setting up and operating your business well.
As you think of writing your business plan, you may be interested in how to make a business plan. The exact contents of a business plan in terms of the sections contained therein may depend on who you ask. However, it is generally a good idea to have a business plan containing a business description for your boat rental company, a market analysis of boat rental businesses in your area and a strategy for your boat rental business, a boat rental company management and organizational description, an overview of the products and services that your boat rental business will offer, a competitive analysis of boat rental companies who will be competing with your business, an operating plan for your boat rental business, and information on the financial projections and needs of your boat rental business.
A well-written business plan can help you raise the probability of your business being profitable. With a business plan, you have the ability to get into the weeds of the research and think critically about the likely success of your business. Outlining your future steps can help you greatly in the process of opening your boat rental company.
Find a Location for Your Boat Rental Business
One of the most important steps in starting your boat rental business is choosing the right location. While you might have an initial idea of your ideal location for your boat rental business when you were designing the company’s main purpose, you should have a good idea of where you want it to be located from your business plan.
Choosing a location is important for a variety of reasons. First, a location may need to be in a place with the right kind of water. Some businesses are better run on lakes and others on the ocean, for example. You should consider the necessary environment for the boats that you will own. This will be fundamental to your business.
Another reason location matters a lot for your boat rental company is that your boat rental company is that you may be located next to competitors. You should make sure that there is light or no competition against your boat rental business when thinking of a place to locate. Remember too that your business purpose might be distinct enough to give you some cushion against your competition.
You should also consider working with a real estate agent to identify a place for your business. While your business might occupy just a few dock spaces, you might want a stand to be able to manage your guests and renters as they arrive. You should consider the layout of your boat rental company and the things needed. After that, you can select prospective locations for your business. Overall, you have a lot of options when it comes to how you want to set up your boat rental business and where you want it to be located.
Getting estimates of the cost of buying or renting spaces for your boat rental space is important. It will help you understand how much capital you will need to put into the business to get it off the ground and the financing options that may be available to you.
Form Your Boat Rental Business
Now it is time to form your boat rental business. Essentially, you will need to set up a legal structure for your boat rental business to operate under. You can start by thinking about your business name. To be sure that the name is available, you should visit your state’s secretary of state website to be sure that no one is using it. Make sure to choose something appealing and understandable so that potential customers will understand your business’s purpose.
Next, you should file documents to legally form a business in the state of your operation. As a business owner, you will need to choose what type of business entity you would like to form. Since you are working with boats and there is the potential for accidents, you likely want to shield yourself from personal liability as much as possible. To protect your personal assets, you will likely want to form a limited liability company, limited liability partnership, corporation, or another type of entity that can help you.
To do this, you should consider enlisting an attorney to guide you through this process. That way, you can be sure that your legal structure is optimized for your business and that your paperwork has been filed correctly.
Finance Your Boat Rental Business
The one issue with starting a boat rental business as compared to other kinds of businesses is that there is a lot of capital required in starting one. This is because you need to purchase boats for your customers to be able to rent. While you are able to start your boat rental business with only a few boats, you can likely achieve better returns and profit margins by having several boats.
The good news is that it is possible to buy boats on a loan or lease them. This can give your small business some flexibility when it comes to setting up your boat rental business. You really only need enough capital to operate for the first few months in this case. However, sometimes getting this financing will be hard. The interest rates, however, may be affordable due to the boat being able to be used as collateral. Thus, the loans and leases are less risky for lenders.
Other kinds of loans are also available to you to help your boat rental business get off the ground. These include small business loans through the SBA, term loans, lines of credit, equipment financing, and more. Both banks and alternative lenders (like Biz2Credit!) can help your small business needs when it comes to affording the setup and operating costs of your boat rental business.
In this step, you want to make sure that you have the capital that you need to start your boat rental business. Once you have this in line, you can proceed to the next step of opening your boat rental company.
Build Your Boat Rental Business
Now that you have your funding and financing in line, it is time to build your boat rental business. You have located a hypothetical property before this step where you could locate your boats and rental service at. Now, you should go through with buying or leasing the space you need.
If you need a facility, such as an indoor store or an outdoor boat stand, you should begin building or renting this facility. You should also purchase your boats, buy them on a loan, or lease them, and have them delivered to your location. Make sure to equip them with the necessary safety equipment and any other necessary furnishings. Ensure that your customers also have a way to reach your facility via public transportation or have a place for them to park their cars.
Apply for Permits
The permitting process is one that you should conduct simultaneously with the acquisition of a property for your rental business to operate on. This is because some of the permits that you may need to operate your boat rental business can take years to get.
One of the most common permits that you will likely need is a water permit. This permit allows you to be able to dock your boats at a certain dock. You will likely need to work with the person who owns the dock to get one of these permits issued by the city or other local governing authority.
The reason that these permits are issued is that the government wants to ensure that the operator of a boat rental business will not create issues for other people using the dock and that the operator and the boat rental business will treat the docks and waterways with respect.
In addition to a water permit, you may need other permits as required by national, state, or local governing bodies. You should check with the relevant departments and include this information in your business plan to ensure that you have covered your bases when it comes to compliance.
Buy Insurance for Your Boat Rental Business
The next step in opening your boat rental business should be to acquire business insurance for your business. Since you are renting boats to people, and you are not necessarily aware of their capabilities of maneuvering a boat, there is a high probability of some kind of accident at some point in your business’s operations. Business insurance can help protect your boat rental business from incurring too much damage.
There are generally two types of insurance of business insurance that your boat rental business should have at a basic level. These include liability insurance and property damage insurance. Liability insurance can help protect your business from lawsuits in the event of someone getting hurt while renting one of your boats or spending time at your boat rental business property. Without this kind of insurance, your business operations could be seriously at risk in the event of a lawsuit.
Property damage insurance, on a different note, can help your business recover damages from your assets. If a boating accident damages one of your boats, you may be able to file a claim and get some or all of your money back, depending on the situation and insurance.
In addition, there are likely other types of relevant business insurance. Including some of these policies in your business plan can help ensure that you, your investors, and your business are protected in the event of an unfortunate event occurring. The best business insurance for your boat rental business may depend on the stage of your business.
Hire and Train Your Employees
After acquiring your insurance and getting your permits, it is time to hire and train your employees. Your employees are the foundation of a good business operation, but they also likely need to be good at handling complex situations involved in a boat rental business. Your employees may need to guide your renters on how to use boats as well as dock them. You may need employees to drive your boats. Or, you may need people who can both operate the front desk as well as deal with situations as they arise, including on the water.
As a result, you need to be sure that you are hiring great employees. Paying well can help as well as vetting their background to determine if their experience is a good fit for your boat rental business. Even if your future employees do not have specific experience in managing a boat rental business, you can still train them.
Having a good training program for your employees is one of the keys to success. If you can train your employees well for their roles and make sure that you are hiring great employees, then you are on track to have a smooth and successful operation. You should be able to depend on them so you can focus on the bigger-picture management of your boat rental business.
Make sure that you hire and train your employees well ahead of the grand opening. You want to be able to make sure that you get your business off the ground well. Having a smooth opening can contribute to repeat business as well as help your business’s reputation in your local community.
Advertise Your Boat Rental Business
Good news! You are nearing the opening of your boat rental business. With so few steps left, you are well on your way to a successful grand opening. To prepare for the grand opening, you need to ensure that you will have a steady flow of business. Since setting up a boat rental business can take a long time and is not necessarily visible from the road around an area, you may not have a lot of word-of-mouth about your new business.
Not only for spreading word-of-mouth, the idea to advertise has other benefits. Your boat rental business likely wants to attract not just locals but also visitors from out of town. You want your boat rental business to be the place to go in your local area for anyone, whether they live in the area or are stopping by.
The first step to ensuring that your boat rental business has a great advertising plan is to build a website. This way, prospective customers can know about your business and access key details without needing to call and take up your employees’ time. Your online presence can also be supplemented with an online booking system which can enable you to reduce inefficiencies and make scheduling easier.
To build your website, you should choose a domain name that matches your business. You can use services or hire designers to build a beautiful website. Consider hiring a marketing firm to ensure that you have good SEO, or search engine optimization, when it comes to people searching for a boat rental business in the area where your company is located. By having great SEO, you can drive more business.
Additional strategies to get the word out about your business and drive traffic during your operations are to create and maintain social media accounts. Your social media can serve as free or paid advertising to help draw in a targeted audience who is looking for boat rental services in your area. You might consider making accounts on Facebook, Instagram, TikTok, or LinkedIn. This can help advertise your business and link people directly to signing up with your business.
You may consider contacting local hotels in your area or your visitor’s bureau. You may want to be able to provide guests and tourists with flyers informing them about the recreational activities that your boat rental business offers in the community.
Overall, it is vital to establish a good marketing strategy. This would encompass having a great website, social media presence, and even things like a referral program. Your business needs to be able to establish itself in the community as you work toward your grand opening. In addition, you want to be able to establish ongoing channels of future business for your boat rental business as it operates. You can also actively communicate with your customers and maintain good customer service and relationships.
Get Ready to Open Your Boat Rental Business
Congratulations! You have made it to the end. With a solid business plan, all the permits and business licenses you need, your boats, and real estate, and having acquired insurance, hired and trained employees, and marketed your business, you are at the finish line of the set-up process. Now, you need to prepare your boat rental business for the grand opening.
It is recommended that you hold an event when you go to start the grand opening of your boat rental business. This might include a party in your office where you rent your boats or a party on the boats themselves. An event can be a great opportunity to draw out the community and bring them to a fun location to spend time with one another and get to know you as a business owner. As a result, you can inspire excitement within the community and help to spread the word of mouth. You can set up your event for success by reaching out to your local government and local newspapers to see if they will advertise or attend your event for free. Getting this free press can help promote your small business and attract potential customers.
Once you pass the grand opening, you have started your boat rental business. Now it is time to use your business plan and wise business management strategies to drive your boat rental company to growth and success.
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