How Tough Is the Owner/Charter Business?

[pearlnecklace]

I've been owner/operator chartering for 23 years, preferring day chartering; much easier. My recommendations; own your boat outright; use brokers, they pass on their percentage to the charterer; plan on not making a profit for the first three years; find a mate with big personality and cooking skills and let her drive the boat; a good crew is as important as a good boat; word of mouth is the best advertising, and remember; lots of competition is not necessarily a bad thing. Go for it.
Brian

[chicagodrifter]

I will add these to the whole "dream" about making money. Current and former boat owners are going to be your best customers. Try to target them first (powerboaters and fishermen). They will understand your pain, pricing and ability more than the occasional land person. For a day cruise you may take land people. You may also try Island Hoppers from hostels if you are going between expensive to fly places. By the way, all the places will want licenses and taxes.

[exilio3000]

But I've seriously considered just renting out the boats to folks with sailing experience so I wouldn't have to be on the boat with them, and they would be utilitarian vessels, not luxury ships. The reason for plainjane vessels is that I figure I wouldn't have to deal with Richy Rich primadonnas - just value-minded folks looking for an affordable goodtime. People that don't need someone nearby to boss around and abuse. Although I've worked in service industries extensively, and I can tell you you just have to take the good with the bad. The "kill them with kindness" approach mentioned earlier really is the only way to make it through with the jerks. Criticism has just got to be so much water off a duck's back for you. Try not to drink away your misery. Luckily, my partner is a lawyer, and you can bet I'll always have customers sign a service agreement.

You really ought to think about not sinking all you cash into one vessel, (saw that you have 200k+ burning a hole in your pocket). If something happens to it, you SOL for awhile waiting for the insurance to kick in. That's why I like the idea of a small "fleet" of not-to-costly" utilitarian boats. Learn how to repair small marine engines, and you are golden.

I really have been thinking that the more you diversify your services, the more safety you have created for your long term financial stability. You may not profit as fast as a specialist, but you'll be more likely to weather the storm in bad times. For instance, I was thinking that perhaps a good way to make it living on a ship fulltime would be to offer luxury goods and repair services to yatchers, cruisers - this in addition to having a rental, chartering business. And why stop there, learn to build boats, why not? It would increase your skill set. The key to it all is having a good online presence and really distinguishing yourself from the pack on your website. Try to build a site yourself, from scratch, so you learn a little about the nuts-and-bolts of web design and don't get taken in by somebody promising you the moon. Let people know what makes you different, give them a personal glimpse of who you are and why they should choose you over the thousands of others out there offering similiar services. Find partners you know you can trust, and never stop learning. Good luck and feel free to contact me anytime, since we seem to similiar goals/dreams, I'll check my private msgs. regularly.

cheers,
exilio3000

[Ex-Calif]

The path to wealth does not necesasrily invlolve using your own capital or your own labor. Your money and your time are finite resources.

Investing $200k in a boat that you can rent out for $300-$400 per day, 50-80 days a year doesn't make sense. Convincing another person to leave their boat in your care while you manage the rentals and take a slice is the way to go. That's how Sunsail, Moorings and all the rest do it.

Skippering you own charters results in you being able to sell your labor for 8-12 hours per day. Hiring 12 skippers and managing their time and charters let's you take a slice of their labor in exchange for managing the business.

Ain't capitalism great?

[S/V Antares]

better than a sugar beet farm in CO. Just not by much. It has all been said here but having done this myself some years ago I say go for it. You will meet some great folks have some tough times and can bail out whenever you wish.

[Tim Schaaf]

I am in the charter business in the BVI, myself. It is very hard, demanding work, and the economic upside is not that great. But, I am doing what I would be doing, as much as I could in my spare time, if my job were something else. I love it. And, I think this is a career only for people who love the lifestyle, but it is a good one for that type.

We use brokers...they earn their pay.
We market wherever we can.
We do a variety of charters...all inclusive, captain only, instructional, etc.
Check to make sure what permits are needed.
Have the capital to establish yourself over a few years.
Try to be different.
Daysails...overnights, each has its plusses and minuses. Daysails for a really good hotel are not a bad way to go. Same thing with overnight land/sea packages.
To make money, you have to be able to do as much maintenance, yourself, as possible.
You can do dive charters solo, but it isn't easy.
You need a really good, solid, dependable boat, and she needs to look great.
You need a lot of stamina and a great attitude toward people.
Most people do come to have a good time. We have only ever had a handful of tough people....most have been wonderful.
Try to break even. Your boat will eat up whatever extra you make. If you want to save money, work as crew on someone else's boat.
The season is short, no matter wherever you are. Your schedule will be governed by demand, not by you.
Every morning I remind myself that this is what I would be doing for fun, even if I wasn't getting paid.
Every morning, I remind myself that this is my job, and it needs a job's discipline, planning, and dedication.

Go for it, and good luck.

The smartest strategy I ever saw was that of two friends who started by organizing bareboat trips with their friends. The group would charter a boat, our friends supplied the skills, and the others paid for it. Over a period of years, this group of friends/cleints expanded, including those who asked "in" as a result of word of mouth. Our friends took these folks on bareboat trips all over the Caribbean. Eventually, they bought their own boat and just kept on doing the same thing. They had a large, and established client base, so never marketed or used brokers. All their "clients" were used to doing some of the work, trained on the "friendly" bareboat charters, so our friends never became servants. They didn't have to put in any time to "break in", either. They took almost no financial risk, and have a wonderful time, and a much less exhausting one than most folks in this business, all of which was the result of building up their base before they bought the boat. I just wish I had thought of that!

[John Drake]

Hello

I manage one of the largest charter operations in the US and think I can give you a fairly good idea of the business end. Chartering, some time ago, was a decent way to make some extra money. There was a time when there were relatively few operators, costs were low, dockage and fuel were low and liability was low. That is no longer the case.

Certainly, if you are driven to this and it is what you LOVE to do....you can do it and be happy with it. There are a few rules that will help you be successful:

1. You must drive your costs down at every turn
2. you must deliver first class, consierge service with a smile,
3. you must find a niche.
4. you must operate in a desireable location (but this will cost you more)

Your success will be determined by the above business factors and one personal factor: YOU.

Your personal ability to deal with people (many of whom will be difficult) and deliver a high degree of personal service and compelling interest to them. If they find you boring, your stories idiotic, your service lacking and you personally distasteful....you will starve. You need to be interesting, charismatic, personable, equanimous, "on" all the time, engaging and FUN...ALL the time.

There is certainly an upside to doing this. I would like to contribute the downside...not to focus on it, but for balance in your discussion.


Some reality, business, economic and liability issues:


As in any business, to be successful, you will need to do a cash flow analysis up front. Can you sustain the cost of a 200k boat, it associated insurance and maintenance costs and make a profit at all?

Vessel issues that will create a negative cash flow:

- you will definately go through a transmission - $3000
- your canvas and sails will get torn
- your insurance will be 3x what you pay now, if you can get it
- you will need to invest $2000 up front in training for your captain's license, DM cert and other certs
- you will need to invest a few thousand in new equip for the boat, both safety equip and additional items for the comfort of passengers
- your passengers will break any boarding ladder you have, a hatch or two, they will lose a few things over the side, they will rip a sail, they will tear your cabin fabrics and chip your teak. They will dirty your fabrics and cushions in ways you do not think possible.

You will not be charging your customers for any of these things and hope to grow your business.

Liability issues you will face that will create negative cash flow (these are real issues we face every year):

Someone will slip on your boat, fall and chip a tooth. You will be attentive and offer them assistance, which they will assure you is not needed. Two weeks after they are off your boat they will send you a bill for $10,000 in dental work. Either you or your insurance company WILL pay.

You will have a kid on your boat that is sick. Symptoms will be non-specific, he will have no fever, no headache and just general body aches. He will not be pale and his pulse will be regular and strong. You will decide it is just mal de mar, or had some bad food and you will not wish to end the cruise for this. That kid will have a perforated appendix and require emergency surgery. You will be sued.

A kid boarding a folding ladder onto your boat will be holding the sides, a wave lifts him up and one of his fingers gets caught on the hinge and is severed. You will be sued.

If you think the above extreme...you need to do more research. All the above has happened, exactly as I have described. Liability release waivers will not protect you in any way whatsoever.

Again...as I wrote above...not to focus on the downside...but to contribute this for the sake of balance and a reality check.

Chartering...THESE days...means investing 10's of thousands to make hundred's while incurring a million dollars liability. You will be competing with splashy ads by big firms that have very attractive models in them with policies that guarantee satisfaction or your money back.

People who ARE successfully chartering...and their are a few who DO make a living at it... have been doing it a long long time and have built a client base and a reputation. They have connections with boat yards and marina's that lower their costs. They know how to successfully prevent liability issues. They have friends and can avoid paying dockage for their boats. They have found a niche and are very very good at it.

I hope this helps...or at least contributes to the debate.

My best to all

John

[Pelagic]

Thanks John…experienced and sobering advice from a pro, to newbie’s considering this.

As you implied, it is hard for a mom and pop corner store to compete with the big supermarket chains in the charter business.

For those who are still seeing this as a lifestyle rather than a business venture, my advice as John indicated is to find a niche cruising scenario in an area that has yet to be discovered.


Develop a satisfied clientele network from those who have done the BVI with the big boys and their bareboat bashers and want something different.

If you are successful in opening up a new area, it will only be a matter of time before professional competition arrives.

Enjoy your early days; develop a good relationship with the competition and watch new opportunities open up for you more in local management and charter services.

There is no downside to enjoying life!

[funsailthekeys]

Just to get you thinking......... The Boy Scouts have a sailing program in the keys. You work about 4 1/2 days a week . Six scouts and two chaperone's. The scout program pays ALL expenses, supplies all food and equipment. If accepted you will probably start with a 12 or 13 week contract at about $2200.00 or $2300.00 per week. Minimum requirements are at least a 41' boat with less than 6' of draft and you are a licensed captain. They do not accept catamarans. It's a cool way to make a ton of cash in short order and spend the other 9 months cruising around.

[Soft Air]

Whoever wants to get in the charter business needs to talk to Sully, he has survive that piece of hell and he will be responsible enough to keep you away from that business unless you really want such an "adventure"

Thanks Sully for the reality check

[John Drake]

Well...this is a good example of what IS a decent charter contract. IF you can get it and if you qualify. The scout program is a great program, but you need to be an exceptional captain to run it. I will detail what you need to be able to do:

It is a 6 day long, full time liveaboard charter with 8 people on your boat. 6 scouts and 2 adults (who may or may not be helpful). You run your vessel from Islamorada to Key West and back, 160nm, half the trip is upwind. You need to be able to teach them marlinspike, keys lore, Keys history, nautical terms, sailing, navigation, plotting, fishing, snorkeling, cooking and manage them in cleaning and running the vessel, anchoring, mooring and docking. The fee is $2350, fuel, seasonal dockage and provisions are included.

New captains may only get 10 trips a year, all in the summer season and just one day off in between trips. You run hard and long for 10-12 weeks, with one day off in between each trip. You will be running your vessel during the HURRICANE season in the FL keys. If a storm does come, you must depart the dock and take care of your vessel yourself. You must have charter insurance, your vessel much be documented for 'coastwise trade' and your insurance must list the boy scouts as additionally insured. If your vessel breaks down or has any maintenance issues during the season, you lose trips.

Vessels need to be 41-44ft and have a draft of 5ft or less, 4'2" is preferred. Vessels must pass a USCG uninspected passenger vessel inspection.

They interview all captains and do background checks. Captains who do not smoke, have had previous charter experience and have worked with kids are preferred. Owner/operator's are preferred.

As far as I know, the boy scouts are the only organization that offer such a contract. Getting in is very competitive and you need to be able to work very hard for very long and do it with great ability and a positive attitude.

My best to all.

John

[funsailthekeys]

I've run the program before and it's not so bad. 2 days to Key West then 24 hours at the marina 2 days back and you are usually finished by noon. The scouts do all the cleaning of the boat. I don't know of anyone that stays on their boat for the whole season. Their base is located at the channel 5 cut at Long key,Fl. They have larger boats to captain for others. The largest I've been on is Calypso Explorer at 115'.

[John Drake]

Calypso Explorer is no longer running.

The larger vessels are 60ft schooners that take 20 passengers, most of whom are teenagers on 6 day trips. Most of them have only a single head and only a canvas screen as privacy for the capt and first mate.



It all depends on how good you are with teenagers.

The point is...that working in the charter biz is not the cake walk or financial freedom many people think it is.

[Therapy]

Originally Posted by funsailthekeys

Just to get you thinking......... The Boy Scouts have a sailing program in the keys. You work about 4 1/2 days a week . Six scouts and two chaperone's. The scout program pays ALL expenses, supplies all food and equipment. If accepted you will probably start with a 12 or 13 week contract at about $2200.00 or $2300.00 per week. Minimum requirements are at least a 41' boat with less than 6' of draft and you are a licensed captain. They do not accept catamarans. It's a cool way to make a ton of cash in short order and spend the other 9 months cruising around.

Bummer!!
............

[funsailthekeys]

It's a shame about the Explorer, Lance spent a fortune on it getting it back into shape. It looks good next to his house though if you like a pirate ship.