Cashflowing With Water Toys - Boats and Marinas

Welcome to another edition of a Cashflow playbook!

A review of the opportunity

The recreational boating industry is insane right now! With a total economic impact of over $170.3 billion, supporting over 691,000 jobs and generating $39 billion in labor income, it’s clear that this is one of the best ways to make money in the outdoors.

This month, we’re talking all about how you can make significant income in the boat rental industry..

Summary

Intro:

Dive into Boating… Become drenched in profits.

The boat rental market is growing by leaps and bounds. The growth is spurred by factors such as increasing popularity of recreational boating, rising disposable incomes, and the growing number of tourists seeking water-based activities.

Believe it or not, when the pandemic hit, the boating business saw a boom due to people social distancing on the open waters. This boom continued post-pandemic and brought more opportunities to start earning additional income by utilizing your own boat. Capitalizing on these opportunities, the boating industry, also known as RV-ing on Waters, provides many monetary gains for individuals looking to own an income-generating investment on the water.

​Boating rentals and boat membership programs are predicted to grow exponentially in the coming years. According to the Bureau of Economic Analysis, the largest outdoor recreation activity in the U.S. alone is leisure boating and fishing!

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The best part is that listing boats is as simple as using one website to handle vetting clients, cash deposits, and hiring a captain for your vessel.

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Playbook

If you already happen to have a boat, renting it out is a great way to offset the costs of ownership. If you don’t currently own a boat, there is great opportunity to purchase and rent out your boat to bring in some serious cash. Owning a boat rental company can come with several benefits, including:

• Income potential: A successful boat rental company can generate significant income for the owner, particularly during peak boating season or in popular tourist destinations.
• Flexibility: Boat rental businesses can offer flexible scheduling options for both the owner and customers, allowing for a work-life balance and the ability to set your own schedule.
• Low overhead costs: Boat rental companies often have lower overhead costs compared to other types of businesses, as they typically do not require a physical storefront or inventory.
• Customer relationships: Owning a boat rental company can provide opportunities to build long-term relationships with customers, many of whom may become repeat renters or even boat buyers.
• Lifestyle benefits: For those who love boating, owning a boat rental company can provide a fulfilling and enjoyable lifestyle, allowing you to spend time on the water and share your passion with others.
• Tax benefits: Depending on the location and type of boat rental business, there may be tax benefits such as deductions for maintenance and repairs.

Here’s our step-by-step guide on how to a rental enterprise that creates wealth on the open seas.

Step 1: Purchase your boat(s)

If you already own your own boat and want to make some extra cash, then this can be a very simple process of listing your boat on an app. However, if you’re feeling more ambitious and want to start a larger operation with multiple boats, be aware that the cost per boat can be quite significant.

Here are a few things to consider when buying boats for a boat rental company:

• Determine your budget: Decide on the amount of money you are willing to spend on purchasing boats for your rental business. This will help you determine the type and number of boats you can afford.
• Research boat types: Research the types of boats that are suitable for your rental business. Consider factors such as the type of waterway you'll be renting on, the number of passengers you want to accommodate, and the types of activities your customers will be interested in. Beyond typical motor and sail boats, you may also want to consider these different types of watercraft that you can also rent kayaks, pontoon boats, houseboats, or other more unique types of boats. We’ve even seen hot tub boat rental companies!
• Research boat manufacturers and models: Look for reputable boat manufacturers that produce high-quality, reliable boats. Research different models and compare features, specifications, and pricing.
• Contact dealers or brokers: Once you have a list of potential boats, contact dealers or brokers to get pricing and availability information. Ask for recommendations and read reviews from other boat rental companies.
• Negotiate pricing and terms: Negotiate pricing and terms with the dealer or broker. Ask about financing options, warranties, and maintenance plans.
• Conduct inspections and sea trials: Before making a purchase, inspect the boats to ensure they meet safety and maintenance standards. Conduct sea trials to test the boat's performance and handling.
• Purchase boats and obtain necessary paperwork: Once you have made a decision on which boats to purchase, complete the necessary paperwork for the sale. This may include titles, registrations, and insurance.
• Arrange for delivery: Arrange for the boats to be delivered to your rental location or arrange for transportation if necessary.

Check these sites for boat purchasing inspiration:

• ​https://www.marinemax.com/​
• ​https://www.boattrader.com/​
• ​https://www.yachtworld.com/
• Your local community such as Craigslists and magazines classifies
• Marinas and marina clubs
• Boatyards

Funding

Financing a boat rental company can be a significant investment, and there are several options available for securing the necessary funding. Here are some ways to finance a boat rental company:

• Personal savings: If you have personal savings, this may be the simplest and least expensive way to finance your boat rental company. Using your own money can give you greater control over your business and reduce the amount of debt you need to take on.
• Business loans: Many banks and financial institutions offer loans specifically for small businesses, including boat rental companies. These loans may require collateral and a solid business plan, but can offer competitive interest rates and longer repayment terms.You may even consider researching a marine lending institution rather than a bank loan.
• Investors: You may be able to secure investment capital from investors who are interested in your boat rental company. This may involve giving up some ownership or control of your business in exchange for the funding.
• Crowdfunding: Crowdfunding platforms, such as Kickstarter or GoFundMe, allow you to raise funds from a large number of individual investors. This can be a good option if you have a unique or compelling business concept that resonates with potential investors.
• Equipment financing: Many companies offer equipment financing specifically for boats and other watercraft. This type of financing may allow you to spread out the cost of purchasing boats over time, making it easier to manage your cash flow.
• Small Business Administration (SBA) loans: The SBA offers loans and other funding options for small businesses, including boat rental companies. These loans may offer lower interest rates and longer repayment terms than traditional bank loans.

When considering financing options, it's important to consider your long-term goals, cash flow projections, and overall financial strategy. Consult with financial advisors or small business experts to help you make the best decisions for your business.

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