Planning on moving to usvi to open a charter business- need advice

[djofdm]

Hi,

Myself and my gf plan on moving to usvi in the next 2 years.

Our rough plan is such:


I have decent assets, and a passive part time income of 100k from a business I own, and she has a similar situation with a meal delivery business. Eventually we will be exiting those businesses. I'm a tech mba guy, opened 3 startups that I sold over the years. She is an exec chef and her meal delivery business is growing to the point where she can have a manager and sous chef take over within a year.

Our plan

Buy a used beneteau 55 sense or Oceanis ( no newer than 2012 ) should I buy a brand new one? Our model is foodie charters with ultra high end food, wine, cooking classes, plus diving, private meals on beaches ect- I think this will give us differentiation. Either that or a cat?


Rent it out as a barebones charter by the week and crewed by us ( she's a well known chef here ) for the weeks we aren't barebones chartered

Weeks where we aren't sold out, my goal is to list it on airbnb as a rental, with crewed daysails.

We will also be opening a small beach and supper club in st Thomas with my brother who is a successful owner of 3 bars and restaurants.

We don't plan on living on it snd will just buy s condo.

My questions: what can I expect booking rates to be if we price ourselves 30 percent below fmv 1st year? What's my risk? Should I get a cat instead? How seasonal is the market?




Sent from my iPad using Cruisers Sailing Forum

[2Hulls]

Should one assume you have your USCG license and you know how to get a waiver of the Jones Act (unless it doesn't apply in the USVI or the vessel you select was built in the US)?

2 Hulls Dave

[djofdm]

I will obv have to get the license, prior. Jones act waiver shouldn't be an issue for an attorney to handle, correct?


Sent from my iPad using Cruisers Sailing Forum

[Rubikoop]

What connections do you have on St Thomas? How many years have you spent on St Thomas? What size and value of sailboats have you owned to date? What experience do you have in the charter business? What do you currently carry for a captains license? Have you looked at some of the charter brokerages to better understand the existing market?

I try not to discourage ambitious spirit and can appreciate stubborn optimism. After 10 years of living here I've seen you countless times with a successful history in the states come down here and lose large sums of money because you believe running a business here will be like you've done it before. The successful small business people I see have vacationed here for many years and see a specific niche to fill. I'm associated with the term charter business and know many in the day trip and crewed charter business. In my mind it is a fairly saturated business. I don't know of anybody with a single boat that is really successful. The economy of scale makes it challenging. The ones that I see doing the best have a history in social networking, have a history as cruisers and many years of sailing experience, are mechanically inclined and truly love to entertain. There isn't really a AAA on the water.

As to boats. Do your research. Count how many monos are out there as compared to cats. I'm guessing 5:1 cats to monos. Why do you suppose that is?

As to opening a beach bar. How many existing beach bars are currently on St Thomas? How many are for sale? What is going to make yours, assuming you can find one for sale, better than the existing?

Most people starting a small business locally don't have enough hours in the day to run a new bar and you want to try and throw a boat in on top of it? And remotely manage a couple of other businesses too? Let me know when you will be arriving so I can buy stock in Redbull.






Sent from my iPhone using Cruisers Sailing Forum

[2Hulls]

Originally Posted by djofdm

I will obv have to get the license, prior.

OK, good. Do you already have the sea time? If not, this will take a lot of your time before you move, or after you get there.

Jones act waiver shouldn't be an issue for an attorney to handle, correct?

I honestly don't know because I haven't needed to attempt it. But I expect the difficulty is not so much the legal challenge as it is the challenge the existing competition will present. If I understand the process correctly, existing businesses serving the same potential customers get to claim they are adequately serving the demand, thus a waiver for you is unjustified. But as stated, I don't have first hand knowledge of this - I was just intending to alert you to this hurdle. You can research the details.....

Good luck,
2 Hulls Dave

[djofdm]

Originally Posted by Rubikoop

What connections do you have on St Thomas?


Family owns property there, been about 6 times or about 20 weeks total

How many years have you spent on St Thomas? What size and value of sailboats have you owned to date?


Started with a San Juan 24 currently have a hunter 40. I race 2 seasons a year up in pac nw for 6 years.

What experience do you have in the charter business?


None.

What do you currently carry for a captains license? Have you looked at some of the charter brokerages to better understand the existing market?

I'll be getting a 6pk I have the hours. I have looked into the brokerages, yes. My assumptions are the bigger cats service a different market I'm targeting.


I try not to discourage ambitious spirit and can appreciate stubborn optimism. After 10 years of living here I've seen you countless times with a successful history in the states come down here and lose large sums of money because you believe running a business here will be like you've done it before. The successful small business people I see have vacationed here for many years and see a specific niche to fill. I'm associated with the term charter business and know many in the day trip and crewed charter business. In my mind it is a fairly saturated business. I don't know of anybody with a single boat that is really successful. The economy of scale makes it challenging. The ones that I see doing the best have a history in social networking, have a history as cruisers and many years of sailing experience, are mechanically inclined and truly love to entertain. There isn't really a AAA on the water.

As to boats. Do your research. Count how many monos are out there as compared to cats. I'm guessing 5:1 cats to monos. Why do you suppose that is?


People don't like getting leaned over? 😃 more help here. I know cats have more room but do they have more occupancy?

As to opening a beach bar. How many existing beach bars are currently on St Thomas? How many are for sale? What is going to make yours, assuming you can find one for sale, better than the existing?

This part I'm not even slightly worried about. 1st we will have a partner, brother who owns 3 incredibly successful bars and restaurants in ca, wa, tn. If we can't find one for sale we will make an offer to buy out an existing bar, done it before, worked out fine. I owned a 4000 sq foot bar and averaged 40-60k a month gross.3rd one of my bar managers will be reloing for s partnership. Plus gf won several awards here in the nw as exec chef, and she will be bringing her sous chef. I know fine dining sucks there.

Our 2 businesses don't require a lot of work and her sous will be taking over day to day, and we have a gm. I run all sales for my startup and currently only put in 30 hours, will reducing it more with my assistant. Currently we are at a 2.5m run rate with 40 percent gp.

Most people starting a small business locally don't have enough hours in the day to run a new bar and you want to try and throw a boat in on top of it? And remotely manage a couple of other businesses too? Let me know when you will be arriving so I can buy stock in Redbull.

The hardest part of owning multiple businesses is finding someone to run them for you. Obv me and the gf sleep like normal humans.

Any answers on the crewed vs bareboat weeks chartered? I'm trying to run budget and proforma. Non booked days can be offset with airbnb bookings.






Sent from my iPhone using Cruisers Sailing Forum

Sent from my iPad using Cruisers Sailing Forum

[rourkeh]

I have seen a lot of people start an owner operated charter business down here in the islands and less than 10% make more than slave wages in the long run. We had some friends who bought a larger cat and chartered for years out of the BVI's. They were the most successful owner operators I ever met, being booked for real money 8-10 months of the year with excellent repeat and referral business built over 10 years in business. They quit last year to work as captain and crew on larger, newer boat for salaries. Wonder why.
The draw backs to this idea are a very long list.
Ridiculously long hours for months on end.
Maintenance costs are very high and never end.
Clients will break EVERYTHING on your boat.
The market is saturated beyond belief with like mined people.
It takes years to build steady client list to the point where you make ANY money.
You'll be lucky to walk away with 50% of fee after costs.

I was living in the BVI's for 18 months and watched a parade of people with your idea come with money and leave broke. I have been in St Maarten for 2 years and seen exactly the same story.
I looked at chartering down here with a much larger boat and unlimited budget for start-up and when I ran the real, no BS numbers I decided I did not want to work 80 hour weeks for $10 an hour.
Stick with the restaurant idea sounds like you have a chance with that.

[FamilyVan]

I think if ultra-high end is your goal, you should probably take a look at what ultra-high end in the yacht business means.

I'm not sure that a 55' Oceanis is the answer to that question.

Sent from my SGH-I547C using Cruisers Sailing Forum mobile app

[S/V Antares]

I do not want to dash your plans but the life you want is extremely difficult. Perhaps you have some bucks so just buy a boat and cruise a bit to find out for yourself that this "Life Aquatic" is very difficult if not a myth.

Buy a cottage in the place you like best , start a business and live as well as you can. This can even be on or near he water ......Boats are what I know.... And it is insanely difficult to make a living on a boat on the water..

[Catopia]

When you say barebones day charter are you meaning bareboat (ie no capt) chartering. IMO that would be a real mistake if you have a nice boat. It will not remain nice for long or you will spend far more money repairing it than you take in.

We were on our boat in White Bay on Jost earlier this month and watched yet another bareboat run straight into the reef. We see this and other issues almost every time we are there. Lots of damage and hard use.


Sent from my iPhone using Cruisers Sailing Forum

[zboss]

Beach front property does not grow on trees in the Virgin Islands. You will not find desirable beach front property with a "for sale" sign out front that doesn't already have two buyers that have spent 10 years cultivating a relationship with the current owner and another 8 buyers with 100x as much money as you do waiting in the wings to scoop it up or drag you into years of court litigation just to make you squirm.

You may have better luck in the Bahamas or some other less developed areas.

[ozskipper]

I wish you well on your project.

There is an old saying in the marine industry.
"How to retire on million dollars in the marine industry.
Start with two million dollars. "

Yes its a pessimistic view. But its used often. At the end of the day, set yourself up so you protect your investment at all costs.

[captsam54]

Having grown up there and been in the charter business..... I suggest you look at buying someone out who has been there for years and is leaving because of health or getting old reasons etc. You just might have a chance then....

[Bulawayo]

What is with all the acronyms? Is it really too difficult to spell out?

[cajucito]

Every Business Person I know believes that everyone else in business is making money faster and easier. Not True. Many Sailors I know believe they could start a successful charter business and make easy money while enjoying life afloat. Not True either.. Your best chance as suggested maybe to take over a successful charter business and add a new 'exciting & In Demand' dimension.