Perhaps you are eager to exit the 9 to 5 grind. Maybe you’re looking for a lifestyle change – or just a change of pace. Perhaps it’s an opportunity to be your own boss.
Whatever your reason for wanting to start your very own day charter business, we applaud you. Who wouldn’t want to spend their days on the water, meeting friendly holidaymakers, making new friends and doing what makes you happy? But what can appear at first to be a long off dream, we can make a reality – and sooner than you may think.
PREPARING TO SUCCEED
Before getting too excited about the prospect of handing in your notice and jumping in head first, you will want to run through some of the basic fundamentals that you need to cover in order to successfully launch your new business. In the charter world it’s absolutely true to say, failing to prepare is preparing to fail. Therefore, get organized, do your homework and prepare to succeed! Create a document with your business plan and address all of the queries raised in the following sections. This article should help you identify and highlight all of the critical questions you will need to ask yourself in evaluating the feasibility of this business venture.
Any good yacht broker will be able to help you through this process. It makes sense to start talking to a broker sooner rather than later as they will have inside information on the market, and have realistic expected returns readily available. They will also be able to offer support and connections with charter booking agencies. These agencies supply your initial customer base and are a vital component in the startup stage.
STAGE ONE: Do I want this?
If you are reading this, then this first step is one you may have already taken. However it is probably the most important stage in this process and worth formally evaluating again. Ask yourself, do I really want to be doing this? You’ll probably answer yes, of course, why not… right? But too few charter companies understand and consider that this is a serious business. It will be a lot of fun and a very exciting adventure but at times it will also be a lot of hard work and you will regularly be tested mentally and physically.
STAGE TWO: Assess the market!
Where do you want to start your day charter business? Why? Is there a demand for day charter in this area? Are there other areas that would perform better? These are the questions to be asking yourself in this stage. Consider things such as historical tourism trends, and where charter guests come from. Are they out of town visitors, cruise guests or locals looking to party on the water. How much are others charging in the area, how many charters are they running per year?
STAGE THREE: SWOT analysis
Using the information you have developed in stage two create a SWOT analysis. If you do not have previous experience using the SWOT (Strengths, Weaknesses, Opportunities, Threats) tool, we highly recommend running through this exercise to analyze the local tourism/charter industry to discover how you can be competitive and offer value to your charter guests. Learn more about SWOT analysis
STAGE FOUR: Offer differentiation
What will you offer, and how does this set you apart from the competition? Don’t be afraid to be different! Will your guests be swimming? Will you offer dive tours? Are dinner cruises an option? Will you target the upper end of the market? if so you will need to match your offering to these requirements. Or will you be competing on cost, targeting backpackers and budget holiday makers? What is currently available and how can you provide a competitive advantage?
STAGE FIVE: The nuts and bolts
- Operation Model including: length of season, trips per day, average passenger load, multiple locations depending on the season.
- Day-to-Day operation: Hired skipper or self-skipperd, crew roles, and customer service. Will crew assist with handling the boat, entertain the guests, serve guests or all of the above?
- Launch Date – it can take 6-12 months to build a new charter boat to match your unique requirements! Seek advice from the shipyard, and take advantage of their expertise when equipping a boat
- Licensing / local authority issues – your local yacht broker should know the local market and provide valuable insights. Locate your local charter expert
- Marketing / booking systems – Charter booking agencies and tour agencies will be vital in the initial stages of your operation. Have your broker provide you with these contacts and connections so you can lay some groundwork before the arrival of your vessel.
When delving deeper into this list, consider how will you find and attract guests, and especially how they will book and pay. Will you be using a booking agency to manage this? Do you have a business model that handles guests for the whole day? Do you have beach access and launch access for small boats and maintenance arrangements for larger boats? Will you do your own accounting or hire someone to do this for you? Will marketing be in house or outsourced? These are all extremely important questions to include in your business plan. You will need to address each of these in order to successfully launch your new day charter business.
STAGE SIX: Return on Investment Calculation
Having proceeded through the previous stages and given the information you have now gathered, create a profit and loss prediction on your day charter company. The most critical aspect to the overall result of this calculation is the initial outlay on the boat(s) and the maximum number of passengers – these are the figures you will not have control over. The number of trips per day/week/season, the cost per head, etc are all variables you may be able to adjust later to suit changing market conditions. You can download an example of a profit and loss calculation for the Seawind 1160 Resort HERE. In this example we have based our calculations on an operation in Phuket, Thailand.
Don’t forget why you are doing this! to have fun and earn a living doing what you love. It may be beneficial to run through these steps a number of times as you work on your plan and develop your figures.
Get in touch with one of our charter specialists to learn how to begin, prepare and successfully complete your journey into charter business ownership today! Still unsure? Send us an email with any questions you have about what your next steps should be and how to determine if this is the right choice for you.