Running a dive shop?

[ppo2_diver]

You also need to take a hard look at the competition in the area you want to open up shop. In this area, existing dive stores have lobbied manufacturers to NOT open up new stores. Many dive store owners don't play far. This is where a good business degree/experience can help. If you can put together a good business plan, KNOW who your customers are and market to them, you can be successful against the dive stores that try to capture the entire market instead of forging their own niche.

Or, just become an independent instructor to teach the classes you love and not deal with the headaches of owning/working a retail establishment. Then create relationships with dive stores that can be financially beneficial to both of you when selling equipment.

 

[highdesert]

Well on the other hand I know some Dive Shops which are run by businessmen. Surely professional, but you have the feeling is about money. /QUOTE]

That's why it's called a business ... the idea of a business is to make money!

 

[mike_s]

From what I've seen, a degree in business and/or marketing would be a huge plus. I think a lot of dive shops suffer because the people running them are divers and not businessmen.

I think this is a true statement.

A lot of shops/owners suffer also because they are in dis-belief of how the rest or the world operates (economy, market, etc) and think that the way divers buy stuff locally should all be from them only and not competiting shops or online shops.

You also need to take a hard look at the competition in the area you want to open up shop. .

Don't forget online competition. Can your new shop compete with online pricing? If it can't, you'd better be in a good local market.



I read a past post that Leisure Trends expected online dive sales to go up I think 20 or 30% this year, but for the scuba industry as a whole to remain flat. (I'll let Phil correct those numbers if I'm wrong...)

What this means is that there will be no overall growth, but because online sales will go up, logically "local dive shop" sales will go down.

I point this out because it's a heck of a market right now to open a dive shop in. Good luck.

 

[Gary D.]

Let me jump in as a business owner as well as working full time.

I have a recumbent bicycle business that I run on my off duty hours. I work nights so having a day business doesn’t interfere much at all. I OWN the shop and property outright with nothing owed other than taxes on it.

I retail for a wide variety of manufacture’s and for several I am either their #1 or #2 selling shop in the country. For several of the companies I stock some of every model they produce. For others I stock a sample or two and there are those who I can special order in. But it is a seasonal business. It took a few years to get the business built up and I have a very good customer service reputation.

There are many things that cut into the money coming in and dictate if you stay in business or not. Taxes like to try and put you out of business. There isn’t much you can do without being taxed on it and some areas a worse than others. Advertising is a major expense and has to be done with caution. Product shipping can change rapidly. Just a couple of years ago I could purchase a half a dozen bikes and get free shipping. Now that same bike order can be as high as $70.00 EACH just for shipping. As fuel costs rise the shippers increase their prices and it becomes a vicious circle. Credit card fees, electric and gas bills, property upkeep, landscaping, shop lifting, tools and the list goes on and on and these bills along with others never get paid off.

Insurance is affordable but takes a chunk out of the bottom line but you are at their mercy. Another shop to the south of me had his insurance canceled two years ago because he hadn’t had any claims in an 8 year period of operation. I saw the cancellation letter and their reasoning was that not having a claim for so long he was due to have one. What stupid reasoning. They can also dictate what you can and can not do under their policy. Like up here you can get business rental insurance to rent out a boat, PWC, airplane, motorcycle, the swim area water toys, snow skies, snow mobiles and a host of other things. But what you can’t get insurance on is bicycle rental.

Even with my business doing as well as it is for a “Specialized” business it would not support me let alone a family to just sustain minimal living standards. It holds it’s own and has gone from owing a lot of money with little inventory to owing little money with a large inventory.

A $100,000.00 figure was mentioned as not being enough to start a dive shop. I agree and it isn’t enough to start many businesses, including mine, even if you own the shop and property outright. Nobody is saying your plan is bad or out of reach. What we are trying to do is get you to do a LOT of homework so if this dream becomes real you can succeed at it.

Gary D.

 

[Buoyant1]

The people that run my LDS all have day jobs, they do a great business, but I don't think they're going to get rich anytime soon.

I think the reward to them is introducing more people to diving, getting the satisfaction of teaching people to dive and being able to keep their gear updated at a premium, and take advantage of the dive trips.

A friend that used to work for another shop told me that their "travel" person dealt with the crap you hav to deal with for setting up dive vacations, but her reward was getting to dive in those cool places, for nothing! (but having to deal with any tiny prpblem that arose)

 

[TSandM]

DA, I think you're completely right -- One of the biggest things that will sink or float a dive business is the character of the person or people running it. I think what has earned my loyalty about the LDS I most frequent is that the owners/operators ARE active divers, and they are honest and willing to do whatever it takes to meet my needs. What I seriously hope is that they are also good businessmen, because if they aren't, no amount of good will and customer service will keep the shop open.

Having lived with the proprietor of a small/middle-sized business for 20 years, I know that the realities of cash flow, inventory, taxes, employee salaries and benefits, rent, advertising, etc. are implacable and really don't care how good a guy you are. You can only lose money for so long before it's over.

 

[BarryNL]

My thoughts are you should know how to dive if you are going to run a dive shop. At least you should be OWI. I wouldnt take sky diving lessons from someone who has never jumped out of a plane. Nor would I take scuba lessons at a dive shop owned by a non diver. Just my opinion.
Kenny

I'd say you definitely need to be qualified to teach any courses you offer in case you need to fill in. Considering what scuba instructors get paid you can't expect them to drop everything to help you out, or even show up sometimes.

 

[Scubakevdm]

I've worked in dive shops for years in managerial positions. I presently work in, and helped to create one that was just opened. My advice would be to sart with at least 400K of investment capitol, and to also have enough money put aside to operate the business for three years without revenue. Having lots and lots of diving experience and being well respected in the dive community you intend to serve is pretty important too. As far as the six figure income part of it goes, in my opinion, to pull money like that in you'll be working pretty friggin hard. It has been my experience that no matter what you do, it's a lot of work to make money in this industry. If the six figure thing is important, you may want to consider other avenues.

 

[JS1scuba]

So hey guys, here's a business-oriented question for you. If you were going to run a dive shop, where would you open up shop? Why? Would you want a degree in business/economics or in marine biology? Both? Neither? Lastly, what kind of certification would you want beforehand? Would you hire OWIs and DMs as employees and delegate to them or would you want to be a DM or OWI yourself so you can teach classes yourself and save on overhead?

Thoughts/advice/opinions/etc. welcome.

I own a dive center in the middle of the desert. We do well. PM me and I will be happy to discuss with you. Include your full name and phone #.

You need to become an expert in your field, as well as an expert in sales, marketing, merchandising, training, education, and customer relations. You will also need to understand an industry as well as consumer buying habits in relation to the economy.

What a professional scuba retailer does is provide solutions for people who have desires for adventure. This is something you need to be able to teach your staff. No one wants to learn how to scuba dive, they dont want to become rescue divers etc. they want to have safe, exciting underwater experiences. THAT's what you are providing. Along the way they pay for those desires, you get to earn a living, pay your employees and make a profit. If you are not making a profit then you are not in business. The profit does not need to be huge, but there must be some.

As to where to open up a new business. ....... choose a place near where you want to live, raise your children and socialize. You must have a life seperate from your business as well. You also should choose a location that has come competition. Your customers need a place to compare you to. (this is critical) The location should also be one that is ideally not subject to severe economic swings.

If I was to put another dive center someplace today I would look at areas that have a good university, large medical center, small service businesses, housing in the $250-$1m range, watersports activities, and a growing population.

Ideally you want your center to be diverse enough that you dont have to rely on any one aspect of the business to be critical to the overal success, but for them all to be a fusion of the business.

<<< that's all you get for free! >>>

Cheers

JDS

 

[BelikinMan]

So most of the responses here have been on a domestic front. No offense, but the LAST place I would want to open a dive shop with be stateside.

So let's talk economics, basic cash flows, etc. I am doing a preliminary econ worksheet to try and throw some preliminary numbers together. Here's some of what I have so far:

Startup
Shop (Buy or Lease)
Boat (8 max + Captain) (Buy, used)
Pier (Lease or build, maybe with shop)
Licenses (Personal, business)
Incorporation, Taxes and Lawyers
Startup Equipment (20 tanks, 10 full dive gear packages, etc)

Avg Daily Income
(# of dive trips a day) x (avg # of divers per trip) x (dive price) = DOI (Daily Operating Income)
(# of dive trips a day) x (avg # of divers per trip) x (cost per diver) = DOE (Daily Operating Expenses)
DOI - DOE - (Monthly Overhead/30) = P/L

Cost per diver would include breakdown of gas, captain/dm, food, insurance, equipment damage, gear cleaning, boat cleaning, tank refilling.

Other Income
Night dives, Classes, Equipment Rental and Sales, T-Shirts and such, Private Chartering

Other Costs
MY SALARY and BENEFITS for me and the wifey
Employees salary/benefits, insurance, utilities, advertising, food, perks, comps....and if we are talking foreign investment, bribes and palm greasing.

Plan: Get my OWI, build business plan, find location, find investors - BAM. Open up shop, buy boat, print t-shirts. Hire a local captain so they know the dive spots, be a fulltime DM while wife runs shop, hire some local help for labor and such. Hopefully, hire a fulltime DM after that, then get another boat.

I don't need a million dollars to retire. If I can make 100k a year total (including my salary and profits), I would be a very happy man.

Maybe branch out to property management or build a hostel-type thing next door to run a little craphole of a hotel.

Ok, so what am I missing???? (Preparing to get hopes and dreams smashed)