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Old 05-05-2019, 11:12   #1
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Thinking about a chartering business

Hi all, looking for advice. I live within an hour driving distance from Chesapeake bay and thinking about starting "owner/operator" charter business that I can run on weekends and vacations. So the idea would be to purchase something like Jeanneau 440 and take people sailing in either Chesapeake or Delaware bays or coastal crusing around that area. Looking for anyone who has experience in this space. I have a well paying job, which can help me to offset some of the risks, meaning I will not be solely relying on this as income. Any thoughts and feedback is greatly appreciated. Alex.
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Old 05-05-2019, 12:03   #2
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Re: Thinking about a chartering business

Do you have the USCG credentials?

Are you by nature a "social" sorta person?

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Old 05-05-2019, 12:04   #3
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Re: Thinking about a chartering business

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Hi all, looking for advice. I live within an hour driving distance from Chesapeake bay and thinking about starting "owner/operator" charter business that I can run on weekends and vacations. So the idea would be to purchase something like Jeanneau 440 and take people sailing in either Chesapeake or Delaware bays or coastal crusing around that area. Looking for anyone who has experience in this space. I have a well paying job, which can help me to offset some of the risks, meaning I will not be solely relying on this as income. Any thoughts and feedback is greatly appreciated. Alex.
My Feedback is, is that how you want to spend your weekends and vacations? Working? Because itís a real job. Itís not easy. You get plenty of jerks. You wonít have that much fun. Itís actually work. Just remember that.
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Old 05-05-2019, 13:24   #4
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Re: Thinking about a chartering business

Surest way to spoil a hobby you love is try to turn it into a source of income.

Yes there are exceptions.

But running a capital-intensive business is both very risky and takes special discipline skills & knowledge.

Get your legal and practical qualifications in place, lots of experience crewing for free or for hire before making any big investments.
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Old 05-05-2019, 16:32   #5
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Re: Thinking about a chartering business

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Surest way to spoil a hobby you love is try to turn it into a source of income.

Yes there are exceptions.

But running a capital-intensive business is both very risky and takes special discipline skills & knowledge.

Get your legal and practical qualifications in place, lots of experience crewing for free or for hire before making any big investments.
I appreciate generic statements as much as the next guy, but I am looking for some practical advice from people who have actually done it, such good CPAs, marketing, business plans, etc.
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Old 05-05-2019, 17:01   #6
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Re: Thinking about a chartering business

Do a search; such has been asked many times, but answers usually general and realistic (tempering of enthusiasm).

The legalities and insurance issues are not minor.
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Old 05-05-2019, 17:08   #7
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Re: Thinking about a chartering business

Check with your insurer first, mine charges $175 -$200 additional per day for a charter.
Read your marina contract, most prohibit commercial use until they get their share.
A friend with a brokerage has all the shoreside legalities and promotion in place and doing charters for him was cheaper than jumping thru the hoops required there.
Couple decades ago a guy I knew did casual charters on his Catalina 36, insurance and other costs convinced him he had to go full time or not at all. He went full time, got a whale watching boat fleet now, but no sails.
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Old 06-05-2019, 02:53   #8
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Re: Thinking about a chartering business

My advice would be.

Get certified as an instructor. Don’t by a boat, teach sailing on a boat owned by someone else, managed by a sailing school. And schedule sailing when it suits you.
I used to do this it was fun, I enjoyed it. I can’t remember meeting any jerks. Didn’t pay much. I wasn’t doing it for the money anyhow. I was doing it to go sailing.

If you want to by a boat. Go talk to a local charter company and sailing school.
You will find. It will not pay. It will cover partition cost of ownership.
If it works for you good. It clearly works for the people who get involved with these programs.

Trying to run a business by yourself. Is not impossible. Some people do it.
The marketing and organization will take a lot of time.
The charter company will get you a lot more business. But will take 50 % give or take of the income

If you can afford to by a nice 40 plus foot boat. Putting it in to a charter fleet in your sailing area may just work out well for you.
Most boats charter bareboat.
Limiting boat to skippered only charters will limit business opportunities.
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Old 06-05-2019, 04:58   #9
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Re: Thinking about a chartering business

I set up a charter operation 3 years ago, lots of paperwork and some additional equipment to comply with the USCG UPV requirements, in addition to the license and TWIC, also the initial and random drug testing, the alcohol tester onboard, the charts, light lists, regulation books, accident report forms, insurance, website, CPA, business license, commercial State Registration etc, etc.
Invited the USCG to come and inspect my operation to make sure all the t’s were crossed and i’s dotted. (Volunteer Examination)
No money in it unless you go full time and run charters 5 times a week, even so you will probably run in the red.
Some tax benefits the first 5 years if you can convince your CPA and the IRS that it is a business and not an expensive hobby.
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Old 06-05-2019, 05:07   #10
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Re: Thinking about a chartering business

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I set up a charter operation 3 years ago, lots of paperwork and some additional equipment to comply with the USCG UPV requirements, in addition to the license and TWIC, also the initial and random drug testing, the alcohol tester onboard, the charts, light lists, regulation books, accident report forms, insurance, website, CPA, business license, commercial State Registration etc, etc.
Invited the USCG to come and inspect my operation to make sure all the tís were crossed and iís dotted. (Volunteer Examination)
No money in it unless you go full time and run charters 5 times a week, even so you will probably run in the red.
Some tax benefits the first 5 years if you can convince your CPA and the IRS that it is a business and not an expensive hobby.
The reason why I want to do it is to offset the cost of boat ownership. I just cannot justify 300K + expenses hobby. In my research so far as long as there is intent to be profitable and active owner participation in the business IRS will allow 179 deduction, plus being in the red can be offset from my corporate income. Would you be willing to go through your numbers and steps in a private conversation? I wish I lived in FL so I can invite you out for dinner
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Old 06-05-2019, 05:32   #11
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Re: Thinking about a chartering business

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The reason why I want to do it is to offset the cost of boat ownership. I just cannot justify 300K + expenses hobby. In my research so far as long as there is intent to be profitable and active owner participation in the business IRS will allow 179 deduction, plus being in the red can be offset from my corporate income. Would you be willing to go through your numbers and steps in a private conversation? I wish I lived in FL so I can invite you out for dinner
Sure, send me a message, dinner ok: Next time you come to Fort Lauderdale, look me up, lots of lobster places here.
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Old 06-05-2019, 07:40   #12
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Re: Thinking about a chartering business

I spent 10 years running tourist boats in the Whitsunday Island area of the Oz Great Barrier reef. I ran everything from half day trips on my yacht out of a couple of resort islands to an 800 passenger day trip operation. I skippered overnight up to 6 day fishing & diving charters on the outer reef, & ran a 10 boat fleet bear boat operation, in those 10 years.


The easiest was the bareboats, where you dealt with your customers mostly by radio, or a 325 passenger high speed cat, with a totally separate wheel house. The most tiring was a 160 passenger boat, with a wheel house open to the tourists. If as we did, you require resorts & accommodation houses to supply your customers, there is a fair bit promotion & marketing work involved as well.


Over that 10 years I lost count of the number of new people who started up a new operation, or bought an existing one, but were gone in just a few years. Some could not earn enough, some found being an entertainer all day every day, as well as a skipper wore them down. It did me.


Running tourists from 9AM to 5PM becomes an 11 hour day, with preparation & clean up, so it gets tiring.


Perhaps it will tell you something to know I spent 8 years cruising the Pacific islands, so loved the ocean, but bought a remote grazing property & breed cows for some years, when I left the tourist boat industry.
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Old 06-05-2019, 08:07   #13
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Re: Thinking about a chartering business

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I spent 10 years running tourist boats in the Whitsunday Island area of the Oz Great Barrier reef. I ran everything from half day trips on my yacht out of a couple of resort islands to an 800 passenger day trip operation. I skippered overnight up to 6 day fishing & diving charters on the outer reef, & ran a 10 boat fleet bear boat operation, in those 10 years.


The easiest was the bareboats, where you dealt with your customers mostly by radio, or a 325 passenger high speed cat, with a totally separate wheel house. The most tiring was a 160 passenger boat, with a wheel house open to the tourists. If as we did, you require resorts & accommodation houses to supply your customers, there is a fair bit promotion & marketing work involved as well.


Over that 10 years I lost count of the number of new people who started up a new operation, or bought an existing one, but were gone in just a few years. Some could not earn enough, some found being an entertainer all day every day, as well as a skipper wore them down. It did me.


Running tourists from 9AM to 5PM becomes an 11 hour day, with preparation & clean up, so it gets tiring.


Perhaps it will tell you something to know I spent 8 years cruising the Pacific islands, so loved the ocean, but bought a remote grazing property & breed cows for some years, when I left the tourist boat industry.
I think if I did it full-time as a primary income source I would do the same as you did Since I am looking at it as a part-time adventure 6 months out of the year on weekends and vacations, it could be ok. But thank you for sharing your experience.
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Old 06-05-2019, 08:11   #14
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Re: Thinking about a chartering business

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I appreciate generic statements as much as the next guy, but I am looking for some practical advice from people who have actually done it, such good CPAs, marketing, business plans, etc.

But that's not what your OP asked: "...looking for advice." You got some. Even if you put aside the input you didn't seek or like, in any endeavor that requires interfacing with the general public & transportation, there are insurance and legal issues for starters.



Marketing? You might want to find some examples of what you'd think you'd like to do, and read their material.


Do you speak more than English? Really. A friend ran a successful 6 pack business based on foreign tourists, an untapped market. Most likely easier than finding the odd tourist from Iowa (nothing personal) who wants to go boating. Took many years to build referrals.



Good luck.
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Old 06-05-2019, 08:17   #15
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Re: Thinking about a chartering business

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But that's not what your OP asked: "...looking for advice." You got some. Even if you put aside the input you didn't seek or like, in any endeavor that requires interfacing with the general public & transportation, there are insurance and legal issues for starters.



Marketing? You might want to find some examples of what you'd think you'd like to do, and read their material.


Do you speak more than English? Really. A friend ran a successful 6 pack business based on foreign tourists, an untapped market. Most likely easier than finding the odd tourist from Iowa (nothing personal) who wants to go boating. Took many years to build referrals.



Good luck.
Point well taken on being open to all feedback. I do speak 3 languages, so that is an interesting idea to advertise that way. Also based on the comments above may pursue a sailing instructor cert to offer learning trips in addition to sightseeing.
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