Liabilty insurance vs LDS

[gcbryan]

Another genius who never should be in business - the liability policy on rental eq costs $1000 annually - he should make that up in 2 weeks of rentals

God Almighty, is almost EVERY LDS clueless about business, undercapitalized, and prone to making bad business decisions - not the ones I deal with, but god, look at the industry

Many are. Look who starts dive businesses...people with no business experience in many cases. There are too many in some locations and not a need at all for them in some.

If this guy in W. Virginia doesn't have enough business to be able to cover his insurance premium then he shouldn't be in business in the first place. Just incorporate, carry minimum insurance and don't get sued. If you do close shop. As it is he will be closing shop due to lack of services anyway.

 

[peterbj7]

Circumstances can change radically after the investment is made and the committment accepted. I know one place where a millionaire moved in, set up shop, and undercut everyone because he wanted to take over all local business. Drove a number of people towards bankruptcy. Then the millionaire's fortunes changed and he had to start making money from his venture, but didn't know how to, as the economic slump had now started. No-one else has money to get back to where they were and chaos reigns.

My area now has one shop selling scuba - the other three all closed down. He is now unable to restock because his capital has steadily diminished during the period of intense competition. I suspect that shortly there'll be no retail scuba available, so any visitors needing spares will have to bring them themselves.

Progress?

 

[Jupiter31]

He does have liability insurance; his problem is the cost. To be able to rent out equipment would cost him an extra $1000.00 on his premiums. To service obsolete equipment would add more insurance costs and might even carry the risk of having his policy canceled. The point is, the insurance company dictates what he can or cannot do in the conducting of his business. If he does not toe the line, he is threatened with ridiculously high premiums or cancellation.

Responding to the OP's subsequent post - That's where I got it from (have you read the whole post? If you had, I'm sure you would have seen it)- regardless if he can make back the thousand in additional premimum in 2 weeks, 1 month, 2 months etc - seems a relatively small amount to pay to offer this service, which, like air/NITROX fills, brings customers in, adds to sales, etc

I don't know who this is directed to, but do you really think you know so much more about this business than "almost EVERY" (your words) person who's invested a lot of money and gone into it. Your naivety is astounding.

No, sorry, can't agree - its directed to the majority of LDS' who are going out of business every month because their business model does not allow them to compete with the on line sellers, either because they can't compete on price and don't give the customer a compeling reason - like the LDS in question - to do business with them - don't take my word for it - there are likely more threads on this board on this subject than any other

I don't need to know how to repair a Subapro Mark IV regulator to know the industry is in trouble - I see the shops closing in SE FL, one of the strongest markets in the country

You can disagree if you wish - some believe in the earth being flat, Santa Claus, and the Easter Bunny - but the fact remains the dive industry in the USA is populated overwhelmingly with small, undercapitalized enterprises who's principals got into the business because they liked diving and are woefully lacking in sales, marketing, and in the case of this thread - comon sense.

I'm almost 55, certified since 1977, and in business over 33 years - benn called many things in my life, but never naive - thanks for the chuckle

And on what basis do you say "the liability policy on rental eq costs $1000 annually"? Where on earth do you get your "facts" from? And as to saying that the net profit from gear rentals should be $1000 in two weeks, well! That's $26000 per year net profit! There are many shops out there whose rental TURNOVER barely exceeds that, and that's in the USA. Have a guess what it is in the Caribbean.

Asked and answered above

 

[gcbryan]

Circumstances can change radically after the investment is made and the committment accepted. I know one place where a millionaire moved in, set up shop, and undercut everyone because he wanted to take over all local business. Drove a number of people towards bankruptcy. Then the millionaire's fortunes changed and he had to start making money from his venture, but didn't know how to, as the economic slump had now started. No-one else has money to get back to where they were and chaos reigns.

My area now has one shop selling scuba - the other three all closed down. He is now unable to restock because his capital has steadily diminished during the period of intense competition. I suspect that shortly there'll be no retail scuba available, so any visitors needing spares will have to bring them themselves.

Progress?

I'm sure there are many reasons for small business to have trouble and go under (especially scuba). I've never really understood how anyone could run a profitable scuba business.

I have noticed locally though that sometimes a guy will retire from the military, open a shop, not market it, have very little stock, and then go out of business never having worked in retail and not having any business knowledge and apparently not having done any market research, etc..

In other words some people open up a scuba shop because they think they want a scuba shop. People who open a hardware store usually are a little more prepared it seems to me.

 

[peterbj7]

Have you ever wondered WHY this state of affairs has come about? If there's so much money to be made in scuba if you tackle the business properly that how come so few seem to manage it? And I'm not just talking about the USA. I'm not American and I don't live in America, tho' that's where most of my customers come from. How about the guy I mentioned who started out a millionaire and is now heading down rapidly? He didn't inherit his money but made it the good old fashioned way. He's certainly not naive, but he's equally affected by the same laws of economic inevitability.

 

[Jupiter31]

I don't think there's a ton of money to be made in the dive business - at least at the retail level - for some of the reasons, just read the previous 2 posts

Your mention regarding the "millionaire" in the dive business rapidly going downhill profit wise proves the old saying " How do you make a million in the dive industry - start with 2 million..."