Advice for starting a delivery boat business

[valhalla360]

Originally Posted by Auspicious

Six people plus you is pretty full for a 30' boat as a business venture. What about drinks and snacks? I don't think you can do seven trips a weekend without help. Turn-around is key and you'll need someone focused on cleaning and prep and provisioning while you deal with customers.

I agree that $8k is not going to get you a boat that people will pay to sail. Also $1k/year for maintenance of an $8k boat isn't enough.

Actually, you will need a separate person to sell while you run the boat if you are doing production style 2hr sunset sails. If people show up at the dock and no one is there to sell them a ticket on the next run, they will go find something else to do.

Also, I struggle to see you getting $50/head on a beat up $8k boat. First time it breaks down and you have to be towed back to the dock, expect the online reviews to kill a lot of demand.

[mvweebles]

Originally Posted by Captain Graham

A little update on the 2 hour sailboat cruising part of my business (PhaseII)

My target date for having everything setup and ready to go is June 2021.

I am estimating the startup costs will be about $15,000.
1. New LLC $1,000 one time cost.
2. Slip $2,200 per year.
3. Insurance $1,000 per year.
4. Boat Survey $1,000 one time cost.
5. Boat Repairs $1,000
6. Target boat price under $8,000 one time cost.
7. Other $1,000

Any tips on where to find commercial insurance for a charter operation for $1000/year? Boat repairs at $1000 1x and $1000/yr seems wildly optimistic. Probably won't even cover a haul/bottom paint.

Good luck, and thanks for sharing.

Peter

[ohdrinkboy]

Having paying customers on a boat is really tough on it. They generally just don't care about keeping your boat nice because they paid. I would expect you to spend more like $1k/month just to keep it neat, clean, well working.

[Auspicious]

... and the value of the skipper's time is?

[Captain Graham]

I did a web search and found the following list of sailboats and number of passengers.

https://charlestonsail.com/

We arrange tours from the following selection of Sail Boats according to group size and availability:
25ft Catalina 250, 4 passenger
27ft Albin Vega, 4 passenger
28ft Precision, 5 passenger
30 ft Catalina, 6 passenger
34 ft Beneteau, 6 passenger
34ft Tartan 3400, 6 passenger
44 ft Sloop, 6 passenger

[Manateeman]

Captain Graham. My father was an attorney specializing in insurance cases in Admiralty so I learned a little bit about it. Congratulations on your license. Here are some insights on how to make a lot of money while protecting your license.
Here is what I’ve learned and recommend, seriously recommend.
Go back to school and get an AB. Learn a few greetings in French.
Go to Louisiana. Bring any recommendations about your engineering work or examples of projects. Bring a letter from the highest placed law enforcement officer you know to vouch for you. Another from your local religious leader.
Copies of every medical exam and drug test and a detailed physical.
Bring pictures of your family. No photos of you anywhere near a sailboat.
Go to the big oilfield companies. Take the first assignment they have no matter where. Open a bank account in the bayou where they have no computers.
Work only till you have enough money for a nice custom yacht.
Never get near a rich private yacht owner.
Do not ever, ever, fix anything on other boats.
Do not deliver boats. Not even new boats. Never, ever, period.
Do not teach boating. Do not survey boats. Don’t start a blog.
Do not work for the civil side of USCG or any Navy contractor.
Do not take paying passengers.
Do not work on passenger vessels.
If you are riding AB and the boat sinks, ask for medical assistance for your head injury and say nothing till your Maritime certified attorney arrives.
If you want to ride Captain, get professional license insurance and pay for a private Maritime Certified Attorney... a lot, in advance. Captains hang, ABs and Engineers just get beat. Group insurance attorneys will not save your license.
Obviously, never sail on an LNG, Commercial dive boat or factory fish trawler.
This is simply the opinion and consensus of two Captains and a crew of manatees.
If you wish independent confirmation on the validity and worth of these opinions, talk to an Attorney certified in Admirality.
Happy trails to you.
Captain Mark and his “undocumented yet Federally protected” manatees

[Captain Graham]

Thank you all for your posts.

A little update on the 2 hour sailboat cruising part of my business (PhaseII)

I have decided that buying the right sailboat at the right price is more important then the starting date.
So my original starting date of June 2021 may change and I may even postpone it to May 2022.

I am in no hurry and want to start this business off on the right foot.
It is kind of like buying real estate.
If you are buying a home for your family the price is important but there are also other considerations.
But if you are buying a home to rent out as a business the numbers have to be correct or the business will fail.

My Budget is on target
1. New LLC $1,000 one time cost. (actual coast was only $700)
2. Slip $2,200 per year. (this is the actual cost)
3. Insurance $1,000 per year.
Some had said that this number is low.
Well before I posted the estimate of $1,000 I did talk with an agent.
He emailed me an estimate of $500 per year.
www.charterlakes.com
4. Boat Survey $1,000 one time cost.
The estimated I have gotten are between $500 to $750.
5. Boat Repairs $1,000.
Assuming I get a boat in good condition this is a reasonable estimate.
6. Target boat price under $8,000 one time cost.
Last weekend I made a $8,000 offer on a sailboat that is listed for $9,500.
He declined my offer, no problem there are other sailboat out there.
7. Other $1,000
This includes getting the sailboat documented by the USCG.

To answer some of the issues people have posted.
1. Increasing my costs (buying a bigger boat) and lowering my potential income (doing less number of charters per weekend) is a sure fire way to have the business fail.
2. No need for a bigger boat as I have posted another sailboat charter business take 6 people out on their Catalina 30 Sailboat.
3. Doing 7 - 2 hour trips per weekend is easy to do and I will have time between trips to clean the and get ready for the next trip.
I am looking at only 3 per day max.
4. I will not be selling tickets at the Dock.
I will be using an online booking systems like https://fareharbor.com or https://www.xola.com.
5. I will not be selling drinks or food it will be a BYOB.
I will provide bottled water at no extra cost.

[Captain Graham]

Well it took some time but I found the right sailboat for my business.
The process was interesting.
1. A few boats did not match their descriptions
These where mostly boats that when they were last used were in good shape.
But the owner did not realize that after a few years on the hard the condition of the boat had deteriorated.
Then when we visited the boat together the owner was very upset and I was not going to buy a headache for the price they wanted.
2. A few owners did flat out lie about the condition.
One guy told me over the phone the inboard engine was in great shape.
When visiting the boat he then pointed out the outboard motor and bracket where not included in the package.
When I asked why do you have a outboard he said he did not trust the engine because it has water in the oil.
3. Almost all of the Catalinas I looked at had the Catalina Smile and cracking in the bilge.
4. I did pay for 2 boats to be surveyed.
Both failed and I learned a lot about what to look for in buying an old sailboat.

Finally I found a good sailboat that will work well, a 1980 Watkins 27.
Nice large cockpit, wide side decks for moving forward and over build.
http://www.watkinsowners.com/w27.htm

It come in under budget at $4,000 but I will need to do some repairs to get her to pass a survey.

Because of the following, I have decided to start the charter business next year 2022.
1. I have used up all of my vacation time.
Our company had a cash flow problem a few months ago and everyone was asked to use their vacations (which already was accounted for) so we would not have to let anyone go. This was a request not a demand but we all decided to help out and we took our vacations.
It is nice to work for a company that is very transparent about things like this.
2. Our company is starting to get some good orders from old customers where I was the onsite engineer.
My current job is not an onsite engineer and does not require very much travel. But I am willing to work as an onsite engineer again to help with our cash flow.
3. The sailboat I purchased is old and will need some work to pass a survey. Example The PO rewired the boat and used wire nuts.
Wire nuts will cause the boat to fail the survey but I also suspect the wire he used was not high quality. So I may need to rewire the entire boat.

So this summer I will be playing with my new boat, cleaning her, fixing her up and then get it surveyed next year.

About the insurance
1. This year I will be paying $100 for the year.
2. I have 2 quotes for next year for when I do the chartering are $500 and $800.

The good news is I have $4,000 more in the budget for repairs and I have a new sailboat to play with.

[flightlead404]

Originally Posted by DEAN2140

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. .

Maybe. Most places won't lend the LLC money without established business credit, history, assets. Which of course if you have, you probably don't need to borrow. Otherwise you'll have to personally guarantee.

[Captain Graham]

Just a little update on my 2 boating businesses

1. The service business - mostly doing Captain's Training Classes
2018 Net loss of $1500 (startup year)
2019 Net income $6000
2020 Net Income $8000
2021 Net income $8000

2. Sailboat Charter business - 2 hour sailboat cruises on Lake Erie
2021 Net loss $9500 (startup year)
$ 700 - Opened new LLC
$4000 - cost of boat (Watkins 27)
$2500 - Rebuild the engine
$2000 - Dock that I did not use (it is a great location so I paid the fee to keep the dock)
$ 300 - Winter storage (this is low because I did not put the poat in the water and just worked on it)

My budget as $15000 and I spent $9500 but I still have some work on the boat.

My forecast for 2022 is
1. My service business should have a net income of about $8000 again
2. My Sailboat business is a little harder to forecast but I am estimating between $10000 and $20000 net income.

So after 4 years of stead progress I think I will earn between $18000 and $28000 in 2022.

Remember I am still working a full time job as a project engineer where I travel to job sites for 2-3 weeks so making an additional $18000 to $28000 is great.

My the next decision is when do I retire from my full time engineering job and spend more time with my boating businesses.
I just turned 65.

My forecast for my businesses when I retire from my full time job is
1. My service business - $15000 to $20000 (should be easy)
2. My Sailboat business - at this point my wild guess is between $20000 to $30000 (I will know more after this year)

[Captain Graham]

I should add that I have NOT spent money on anything not needed for the Business.
It is very tempting to buy toys that I want but not what the business needs.

Example I would like to have a chart plotter but it is not needed for the business it is just a toy.

I have bought
1. New Racor Fuel filter with extra filters
2. Other engine parts
3. Type 1 life jackets with strobe lights (required by the Coast Guard)

My goal is to keep my startup costs low so the business will return a profit quickly.

[Lucky Luke 1]

I know a delivery captain who has been doing it for decades both nationally and internationally. There is not much money in it but plenty of aggravation and missed birthdays. He has a small boat yard and that's what keeps his head above water.

He seems to spend a lot of time fixing other peoples boats in ports as he is waiting for weather windows and then arguing with the boat owner over the costs and timelines.

But GL with it. Often our semi retirement "job" is more of an interest than actually being profitable.


Your 65- just retire and enjoy life. Go sailing.

[Captain Graham]

Originally Posted by Lucky Luke 1

I know a delivery captain who has been doing it for decades both nationally and internationally. There is not much money in it but plenty of aggravation and missed birthdays. He has a small boat yard and that's what keeps his head above water.

He seems to spend a lot of time fixing other peoples boats in ports as he is waiting for weather windows and then arguing with the boat owner over the costs and timelines.

But GL with it. Often our semi retirement "job" is more of an interest than actually being profitable.


Your 65- just retire and enjoy life. Go sailing.

FYI When I started this thread I wanted to start a delivery boat business.
But because I am working full time as an engineer I changed my goal to mostly training and some sunset cruises.
Once I retire I may go back to doing boat deliveries but at this time I am not sure.