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Old 13-10-2012, 08:11   #1
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Wanting To Setup A Small Sail Charter Business

Hi all

I am wanting to get some advice on what is involved in setting up and running a small day sail charter business.

We have a nice boat that I think would handle 6 paying guests doing sunset sails, beach runs, or even overnighter,s for up to 4 paying guests.

Things that I would like some advice on are:

1. What captains licence is required. I am not currently a licenced captain but have signed up for a class. I have been my own captain for over 35 years, but have never taken a class.

2. Insurance? What do I need and how much more is it going to cost over standard, full coverage?

3. Web site? I have a web site designer in my family that can build a web site for me, does anyone have experience that they would like to share?

4. Coast Gaurd? How big of a chalange is it going to be to get Coast Gaurd aproval? I want to do everything legally.

5. I would love to hear from others that have done this, or are currently doing this, to find out some of the pit falls. I do not need to make a living doing this, I just would like to use my boat more and make it pay for itself. In Naples Fl, we have a tourist season that is just now starting. I would idealy like to do 4-5 day trips a week during high season and then none or very rairly during off season. Does this plan seem reasonalbe, and am I being realistic about making enough money to cover operating costs?
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Old 13-10-2012, 09:39   #2
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Re: Wanting To Setup A Small Sail Charter Business

If you set the boat up to carry six or less passengers, the boat is considered an Uninspected Passenger Vessel and not subject to USCG inspections that Charter vessels carrying over six passengers are.

You can and I recomend you do get a free USCG or Auxillary Courtesey UPV Inspection of your boat, which will help you get everything in order. Here is a link to the USCG Site that provides information on UPV

As far as licensing, you would be required, at a minimum, to have a Operator of Uninspected Vessel License - OUPV (Mistakenly and commonly called the Six-Pax License). You would also need an Auxillary Sail Endorsement. Information about that can be found USCG STCW Site

I worked several charter boats and dinning yachts in San Francisco Bay and know that insurance is expensive... How much will depend on your vessel, area sailed and crew experience.

Good luck!
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Old 13-10-2012, 10:08   #3
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Re: Wanting To Setup A Small Sail Charter Business

Regardless of the testing for the license, dont you still need documented sea time?
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Old 13-10-2012, 12:34   #4
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Re: Wanting To Setup A Small Sail Charter Business

Yes you are required to have a certain amount of sea time for your licenses. For your first issue the seatime includes your entire life, as long as you can document it.

If you are a vessel owner you can document your own time on your boat.

Maritime Institute of San Diego has a simple web page that explains the requirements for each license.

The basic sea time requirements are:

OUPV - 360 Sea Days
Master 100-ton Inland - 360 Sea Days
Master 100-ton Near Coastal - 720 Days
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Old 13-10-2012, 16:22   #5
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Re: Wanting To Setup A Small Sail Charter Business

Thanks for the helpful information.
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Old 13-10-2012, 19:24   #6
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Re: Wanting To Setup A Small Sail Charter Business

Rocketman:

Jereimason has pretty much covered the requirements. I was planning on doing something similar in case my freelance work dries up. So far it hasn't so my plans have been put on hold. I was looking at an addition $700 in insurance costs over what I was paying for 20 trips. I would also have to change insurance companies to get the policy which of course means a new survey $. But, this was two years ago so the numbers might be off a little. But, may give you an idea of some of the startup costs.
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Old 13-10-2012, 19:27   #7
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Re: Wanting To Setup A Small Sail Charter Business

Quote:
Originally Posted by mbianka View Post
Rocketman:

Jereimason has pretty much covered the requirements. I was planning on doing something similar in case my freelance work dries up. So far it hasn't so my plans have been put on hold. I was looking at an addition $700 in insurance costs over what I was paying for 20 trips. I would also have to change insurance companies to get the policy which of course means a new survey $. But, this was two years ago so the numbers might be off a little. But, may give you an idea of some of the startup costs.
Thanks for the information, can you tell me what insurance company would alow you to do charter work with your boat?
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Old 14-10-2012, 06:11   #8
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Re: Wanting To Setup A Small Sail Charter Business

Quote:
Originally Posted by Rocketman View Post
Thanks for the information, can you tell me what insurance company would alow you to do charter work with your boat?
Rocketman:

I don't recall who I talked to and don't have my files nearby. I know I spoke to someone at the Annapolis Boat Show one year. But, there use to be someone here on CF who was in the insurance business too. Might try a search either here or on google. I do know Boat U.S. does NOT insure charter boats so you can write them off right away.
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Old 14-10-2012, 20:04   #9
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Re: Wanting To Setup A Small Sail Charter Business

Rocketman, is there any way you can get a job working for another charter company for a year? To see what the business is actually like befor you invest in setting one up?

T be a success you will need to answer the phones, full time. Do marketing, more than full time. Book reservations, lose about 3% to credit card charges, pay comercial insurance (an dpossibly dockage), local business regiistration and taxes as applicable, a LOT of paperwork besides the captains license. And of course, six passengers mean six bosses, what do you mean you only have domestic blue cheese on this boat?

Find some people in the business, either on the boat show circuit (FLL is coming around) or out of town so it isn't competitors, and start taking people to lunch to talk about the business first hand. Yeah, that's gonna cost money too. Bear in mind a clean boat photographs well (and you'll need a web site these days, and prepare to pay brokers and hotel concierges their piece) and of course you'll probably want to spend an hour or two every day, before and after, cleaning the boat...

A lot of work and investment beyond the obvious. Which is why I'd start by trying to get a job in the business, where someone else is taking all those risks, and then start spending some money picking brains and joining trade associations.

Or as we say up north "The grass is always greener over the sepctic tank."
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Old 14-10-2012, 20:36   #10
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Re: Wanting To Setup A Small Sail Charter Business

Rocketman:

Take Hello Sailor's advice to heart. There are probably easier ways to make a living than in the charter business. That's why I have not moved forward with my plans. Currently for me it is more lucrative to do some freelance work going into a building that is air conditioned in summer and heated in winter. Where my income does not depend on the season or the weather conditions. When my work gig is over I am a free man on board with no set schedule or place to be. If I want to take off and head out somewhere with the boat I can. If I was depending on the charter income solely I'd have to give up some of that freedom in order to maximise my charter income. This is not to discourage you but, to have you look at the realities of the business. As Hello Sailor mentioned there are also additional costs and work to consider before you get paying passengers on board.
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Old 14-10-2012, 20:48   #11
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Re: Wanting To Setup A Small Sail Charter Business

Hellosailer and Mbianka thanks so much for your helpful advise, I will take it to heart. The first step is getting my captains licence. This is something I have been wanting to do for a long time, so the investment in time and money for this, I believe is worth it. As to actually starting the charter up in my boat, I freely admit that I may not be ready, and learing the trade while working for someone else is a great idea.
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Old 14-10-2012, 22:14   #12
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Re: Wanting To Setup A Small Sail Charter Business

Rocketman:

Indeed go for it! Having that Merchant Mariner Credential and TWIC Card will open doors for you and the knowledge gained will stay with you for the rest of your life. Even the first responder training will come in handy and be a plus on the resume no matter what you decide to do.
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Old 30-10-2013, 07:17   #13
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Re: Wanting To Setup A Small Sail Charter Business

Capt Mike is right on point. There are easier ways to make a living, and in fact, it is very difficult to make a decent living chartering your boat. I am a retired pilot and have been doing charters since 2008, with 5 months off every other winter to cruise the Caribbean. I average 3 charters a week when active, mostly sunset cruises and half day cruises for groups up to 6 (OUPV) only, because I DO NOT want the government on my boat, and neither do you. Getting your license is a paper chase, so just get the list, start at the top, and work your way down, and plow through it all.
Recommend a private captain's license school for passing the exam, like Mariner's Learning Systems. If you do all the online modules and know the answers to all the online questions, you should get 100% on their exam and the certificate is in lieu of taking the CG exam.
Get 90% of business from website and previous customer referrals, and only 10% from local ads, C of C and hotels, so a good website with SEO is important.
The sailing and handling customers is mostly easy and fun. I single hand my 44 most days, and if the w/x is too poor for single handing, you shouldn't be taking people out on the Gulf anyway as they will just get sick and scared or both.
Never rent bareboat. There will be a handful of groups in a year that are trouble, mostly booze related, so just be firm and cut them off. Maybe once a year I'll tell them to straighten out or I'll have the Coasties come and take them off, which always works.
My boat is free & clear, so if I cover all my expenses for marina, maintenance and repairs in a year, I'm happy. Pricing since the financial meltdown is tough, as people are tighter with money and the competition has lower prices.
Good luck.
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Old 30-10-2013, 13:30   #14
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Re: Wanting To Setup A Small Sail Charter Business

Konakoma

Thanks for your advise.
Since I posted this thread, I went to a captains school and received my 50 ton master captains license with sailing and towing endorsement's and the TWIC card. As I mentioned previously, this is something I wanted to do regardless of starting a charter business.

Shortly after getting my captains license the Dockmaster position opened up at the marina where I keep my boat and I was offered that position. I decided to take that position, which did not require a captains license but the knowledge received in the school has helped me with the job and gives me some level of respect, deserved or not. I really am enjoying the new job, but, for now I am using the job to put together a sailing kitty, and to pay the boat off before doing any chartering. I would strongly recommend to anyone wanting to work in any part of the marine industry, to get there captains license. It is not required for much of the industry, but it gives some level of knowledge of the rules and instant respect.

I did check into insurance for chartering, and did not find it to be show stopper but as with any business, start up costs, finding a marina that allows charters, and creating a web site were obstacles that need a far amount of time and money to get off the ground. For now, I am happy with the salary of working for a sleepy marina that really appreciates someone with at lease a little boating knowledge and common sense.
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Old 31-10-2013, 02:53   #15
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Re: Wanting To Setup A Small Sail Charter Business

I don't recall. Does the Jones Act play into it anymore? I know for large ships, if you want to do charters that go port to port inside the USA, the boat is supposed to be built in the USA. There may be a waiver for small boat charters.

Also, I heard one time that if you get your license, it's about the same to get a 25 or 50 ton version as the 6pack and that opens oppurtunities.

We've considered it as a side hobby but with the costs and paperwork, it didn't make sense unless you were doing a fairly large number of charters (3-4 per month just didn't justify the hassle and up front costs).
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