Advice for starting a delivery boat business

[Captain Graham]

Hello All,
I am starting up a small boat service business, focused on training and boat deliveries.

For the next few years I will be using my vacation time for the business until I retire.
My short term goal (before Retirement) is to earn $4,000 to $8,000 per year.
My long term goal (after Retirement) is to earn $20,000 to $30,000 per year.

So far I have gotten my USCG Masters License, became a USCG Qualified Instructor and set up a LLC for taxes.
My business/marketing plan is to develop contacts in the New York City area by doing 2-4 USGC 100 Ton training classes per year.
I do these training classes at Yacht Clubs where I will meet people active in boating.

I should add that for the first few years I will be a mate and not take on the responsibilities as the Captain during deliveries.
This is mostly because I have been sailing the past 30 years on Lake Erie where there are no tides or currents and with no electronics.
I did sail for 10 years in the NYC area when I was a kid but I do not consider that experience to be enough.

Can anyone who is in the business give me some advice.

Thanks in advance.

[belizesailor]

The LLC is not just for taxes, it also provides a degree of liability protection. All contracts should be in the name of the LLC and all client payments should be made to the LLC...not you personally.

If you plan to remain a one man show, ask your accountant about designating the LLC as a "disregarded entity" for tax purposes...this eliminates the need to file a return for the LLC.


In addition to building some experience as Mate, you might also consider pursuing RYA Yachmaster certification...looks good on a resume.

Check into insurance for deliveries and personal/business general liability coverage.


Yacht Brokers are a good source of leads. Get to know some in your area. Attend a few boat shows and give them cards. I used to get a lot of referals via brokers for training/deliveries.

Charter Companies are also another good source. They often need to move boats seasonally. I used to move boats for both TMM & Moorings. I was in the charter industry so knew them directly, but you can meet them at boat shows too.

[Captain Graham]

belizesailor ,
Thank you for some very good advice.

[Uricanejack]

Don’t.

I have contemplated similar ideas. Just when I look at it the numbers. The numbers have never added up. I think it must be just about the worst possible small business idea there is.

Why not dream though?

My plan. Post retirement. Sailing instructor. Problem I just want a part time gig.
Other wise I am not retired.
Go back to the sailing school I used to work for. Re certify as an instructor.
Go back on the list of instructors.
Work the opertunitities I want to. I will earn bear money and have the pleasure of sailing some nice boats.

I though about adding my own boat. And doing some instruction on my boat.

Well my boat is over 30 years old. I think it’s quite nice but. My pal who runs the school says no. it’s to old.

You are offering something diffrent. Commercial course, for commercial lisence. Class room based rather than on a boat. Might work. So long as you are not trying to pay for a boat.

My questions.

If I want a USCG 100 T certificates
Why would I come to you for instruction?
What do you offer me other schools don’t?

If you can answer those well you might just be on to something.

I have the possibility of doing something similar when I retire. There is a market.
I former colleague is Doing something similar.
He goes to where the course is required. Mostly to fishing and small commercial operators. In remote areas. Teaching mandatory courses.

Delivery no clue.

[LuvSun]

Is this via inland or ocean?


My sisters friend sails boats from the pacific to NZ for money, mostly Fiji, sometimes Hawaii. I can ask them if its any help.

[Captain Graham]

Originally Posted by LuvSun

Is this via inland or ocean?

My sisters friend sails boats from the pacific to NZ for money, mostly Fiji, sometimes Hawaii. I can ask them if its any help.

Thank you for the offer but I am not ready for ocean trips, yet.

Since I am still working full time and I do not have ocean experience, my plan is to do 1-2 deliveries along the US East Coast per year until I retire in a few years.

The USCG 100 Ton training classes is a way to get to know people in the boating business, in my target market NYC Area.
I will be conducting my next class in March in Bridgeport CT.

My day job is a project engineer doing advanced process control, controlling temperatures, pressures, levels, etc. in heavy industry.
I am also the groups trainer, conducting training classes for our new employees all over the world.

So I have years of experience training people on technical subjects and the USCG approved training company that I work for, hired me based on this experience and my personality.

[fish53]

I'd suggest being a greeter at Walmart, you make more money, have way less aggravation and you'll spend more time on a boat, yours. There are thousands of people happy to do deliveries for a ham sandwich and expenses, and thousands cheap enough to let them. I used to do deliveries, I had a master 1600gt oceans license ("had" as in taken for health reasons) and years of commercial experience yet everyone expected me to work for peanuts delivering their broken down boats in two days less than the boat was capable of in the best of conditions. But hey a dreams a dream, if you have the skills by which I mean mechanical/electrical/marine surveying as well as your skills navigating and boat handling take a shot. If you lack these skills you're just becoming a headache for yourself, the owner, and anyone that has to help along the way. The training part is the antithesis of the delivery part, those that can do those that can't teach, which is why the only training I ever got was the mandatory kind.

[boatman61]

If your hoping to make a living doing deliveries forget it..
You'd have to charge prices at $400+/day just for you then theres crew plus expenses..
There was a guy based in Annapolis on here who had a few rants about me and a couple of others here because we do it kinda part time and freelance thus stealing from his rice bowl.. kinda funny considering I am EU based and US - US jobs are illegal for me to do but hey.. as he said he had a family to support... he needed to place blame for not cutting it.
It takes a long time to build a reputation and just one cock up to destroy it.. People will remember and reference that cockup 1000x longer than the 40 perfect jobs before.
Good luck.

[SimonV]

I delivered part time on the east coast of Australia and SE Asia , there is no money for full time unless you get commercial deliveries, but they tend to have their own staff. All my jobs were word of mouth and the only way to make money was to have the wife as my crew. Good luck but money is tight and owners are tighter.

[Tricolor]

Originally Posted by boatman61

If your hoping to make a living doing deliveries forget it..
You'd have to charge prices at $400+/day just for you then theres crew plus expenses..
There was a guy based in Annapolis on here who had a few rants about me and a couple of others here because we do it kinda part time and freelance thus stealing from his rice bowl.. kinda funny considering I am EU based and US - US jobs are illegal for me to do but hey.. as he said he had a family to support... he needed to place blame for not cutting it.
It takes a long time to build a reputation and just one cock up to destroy it.. People will remember and reference that cockup 1000x longer than the 40 perfect jobs before.
Good luck.

This is the reason that I don't do deliveries, so many people asked me to do so from Brazil and Suriname to the Caribbean and one asked for a delivery Brazil Capetown.

But hey, I can live without as I receive my monthly dutch retirement check. So easy talk for me.

[DEAN2140]

"The LLC is not just for taxes, it also provides a degree of liability protection. All contracts should be in the name of the LLC and all client payments should be made to the LLC...not you personally."

An LLC will not protect you against liability for negligence, which is the most obvious cause for a lawsuit. It will protect you from some financial liability if you borrow money or incur debts to vendors and the like in the name of the LLC. Your best protection is your own insurance or being named as an additional insured on the boat owner's policy.

[belizesailor]

Originally Posted by DEAN2140

"The LLC is not just for taxes, it also provides a degree of liability protection. All contracts should be in the name of the LLC and all client payments should be made to the LLC...not you personally."

An LLC will not protect you against liability for negligence, which is the most obvious cause for a lawsuit. It will protect you from some financial liability if you borrow money or incur debts to vendors and the like in the name of the LLC. Your best protection is your own insurance or being named as an additional insured on the boat owner's policy.

It wont protect you from gross/criminal negligence...and in those extreme cases likely neither will your insurance.

It can protect your personal assets in most cases except for gross/criminal negligence.

[seabreez]

Originally Posted by SimonV

I delivered part time on the east coast of Australia and SE Asia , there is no money for full time unless you get commercial deliveries, but they tend to have their own staff. All my jobs were word of mouth and the only way to make money was to have the wife as my crew. Good luck but money is tight and owners are tighter.

I second the motion here... did a few deliveries and the headaches are not worth it. Now I am on a small commercial tug pushing barges all over and I LOVE IT. Getting paid well, home every night, days off when I want and invite who I want on for crew occasionally.

[dochip]

Have you priced insurance? My “captain other vessels” policy was horribly expensive. And few vendors still write such coverage

[TrentePieds]

Quote: "An LLC will not protect you against liability for negligence, which is the most obvious cause for a lawsuit. It will protect you from some financial liability if you borrow money or incur debts to vendors and the like in the name of the LLC. Your best protection is your own insurance or being named as an additional insured on the boat owner's policy. "

No sensible lender would lend to an LLC in the "yachting business", wobbly as it is financially, without the shareholder(s) guaranteeing the loan and tendering shore based assets, preferably real estate, as security. Therefore an LLC offers no protection in that regard.

"Closely held" corporations offer no tax advantages in this jurisdiction. Among other things, "depreciation", here called Capital Cost Allowance, that in days of yore was what made it beneficial for tax purposes to "charter" one's boat, must now be apportioned on "business use" and "private use" so all the CCA you can legally take, if your "business use" is, say 5% of the number of days in a year (i.e.18 days) is 5% of the basic rate of CCA. I believe the rate at present is 15% of the declining balance (on acquisition cost). Then what you can take is 5% of 15%, i.e. 3/4 percent, of the "undepreciated balance" of acquisition cost. This may be applied to your "business income" (from the boat) but NOT to you "earned" income from employment or to your "investment Income"

For most yacht owners, the "Net income from business" (the "chartering" of a yacht) is normally negative, so therefore the CCA is of no consequence whatsoever.

So you see, there are no advantages either in regard to escaping legal liability or in respect to tax liability by running a "charter business" as a sole proprietor. Because there are no "personal exemptions" if the business is run and reported as an LLC, there are no tax benefits in doing that either.

Regulations may be different in the US, of course, but I rather doubt it. Best to talk to your tax accountant.

All in all, the soundest, least troublesome and least expensive policy is to just buy a boat and consider the expense of ownership the cost of having a hobby. The acquisition cost should be considered "sunk cost" :-)!

TP