Owning a Dive Shop

Hi there,
I am looking for some info on setting up a dive shop. I have been doing a bit of soul searching lately and it is something which interests me greatly and I would appreciate some advice and maybe a reality check!!
My situation is as follows, I currently work in a normal job. I am thinking that if I work until the end of 2011 I could save with my girlfriend about $30000US. Ideally I would like to set up a shop in South East Asia or Central America but I am not limited to those areas. I would however like to stay away from places like Ko Tao, Gilis, Cozumel etc. basically I would like a nice dive destination with a few dive shops.
I would think that I would rent a place and set up a small business and hopefully expand over time. I would be working as an Instructor / DM and my girlfriend would also help out on the Admin side of things.
How much of an original investment would be needed? I realise a large investment would be needed at first to purchase equipment, a boat, tank refill system. Assuming that I would start off catering to 8 people at most a day, is 20 tanks, and sets of equipment more than enough. Also the boat would not need to be too large either.
Also, what are insurance costs like? And is there any other recurring costs to think about other than rent, wages, gas, etc. anything not obvious to me. Is it straightforward in these countries to get finance from a Bank?
I would really appreciate any advice or help I can get. I am no fool and I dream of owning a shop. I think I would do well but I am under no illusions of how difficult it is. I am also not going into this thinking I will walk away with a bucket load of cash, however I would like to make a living out of it and if in ten years time I sell the business I would hopefully get back the original investment I made.
Thank you

mugenheimer:

Hi there,
I am looking for some info on setting up a dive shop. I have been doing a bit of soul searching lately and it is something which interests me greatly and I would appreciate some advice and maybe a reality check!!
My situation is as follows, I currently work in a normal job. I am thinking that if I work until the end of 2011 I could save with my girlfriend about $30000US. Ideally I would like to set up a shop in South East Asia or Central America but I am not limited to those areas. I would however like to stay away from places like Ko Tao, Gilis, Cozumel etc. basically I would like a nice dive destination with a few dive shops.
I would think that I would rent a place and set up a small business and hopefully expand over time. I would be working as an Instructor / DM and my girlfriend would also help out on the Admin side of things.
How much of an original investment would be needed? I realise a large investment would be needed at first to purchase equipment, a boat, tank refill system. Assuming that I would start off catering to 8 people at most a day, is 20 tanks, and sets of equipment more than enough. Also the boat would not need to be too large either.
Also, what are insurance costs like? And is there any other recurring costs to think about other than rent, wages, gas, etc. anything not obvious to me. Is it straightforward in these countries to get finance from a Bank?
I would really appreciate any advice or help I can get. I am no fool and I dream of owning a shop. I think I would do well but I am under no illusions of how difficult it is. I am also not going into this thinking I will walk away with a bucket load of cash, however I would like to make a living out of it and if in ten years time I sell the business I would hopefully get back the original investment I made.
Thank you

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Old scuba joke:

Q: How do you make a small fortune in the dive business?
A: Start out with a LARGE one.



Unfortunately, I can tell you from experience that $30K will not be enough. You will definitely find that out once you complete your business plan. At that point you can take the figure you come up with (even with the most conservative estimates) and probably DOUBLE it.

BTW, if you intend to start a business in a foreign country, you need to determine what that country's economic & visa requirements are for non-nationals with regard to o/o a business there.

Last (but not least) you will need to be more than just your basic Instructor rating to attract & keep customers. The more experience you have, the better.

Bonne chance,

Let the guy dream, OK?

What about maintaining all your equipment?
Regs need to be serviced by a factory certified tech... Are you mechanically inclined or will you need to "outsource" servicing?
Tanks need Vis and Hydros.. how will you get these done?
Airfill stations need regular maintance. nothing will close a shop quicker than bad air...
Equipment source, if yoiu are in another country, in a less than commonly traveled destination, will you be able replace worn out or broken gear quickly?
Boats are a funny mistress, if you are well off the beaten path, do you think you would buy one local, or will it need to come from else where? To run charters, will you need a boat captians licence? What ,if any, seamanship skills have you mastered?

Not trying to rain on your parade, just a few of my thoughts.

Buy in to an existing dive shop as a co-owner. You will have an established business, an experienced partner, and time to get some experience yourself before your money runs out!

If you were to own your own shop I dont think all of the issues posted here would be real issues for you to deal with in the sense that they would not be what scares you from doing it.

Other countries have different Insurance regulations. So you need to know what you would really need. I am sure it may be much more relaxed than our backwards system here.

Servicing is really about parts. That comes with your suppliers/distributors. As does your certification to service said units. I am not certified to maintain my regs. Do I do it? Yes. Do I worry about it? No. I also work on my own cars. I will still drive them far from home without a second thought. Ohh my! Crazy me!

Boat and $30K for a whole shop? I dont think you were thinking of getting a boat at this point since I dont see many cheap boats I would want to go out and dive off of. (I am a snob though so nothing cheap really gets my eye!)... and becoming a Captain, as I understand it, means I need to know EVERYTHING about the ship. So, if needed, I could repair the motor, replace whatever or do what it takes to get the ship back to dock not to mention the skills to safely get the boat, crew and customers to and from the shop. Seeing them do it in Cozumel, I am sure I would just hire a captain and lead the dives myself. I would also just hire staff to man the tanks and setups for the customers.

One above stated :

Last (but not least) you will need to be more than just your basic Instructor rating to attract & keep customers. The more experience you have, the better.

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I dont agree. I keep diving with the same outfit in Cozumel year in, year out. Why? Cause I like the boats and the people they have. I am not interested in getting PADI anything. I am NAUI and prefer to get my training at home rather than while on vaca. So thats not going to be a breaking point for recreational divers. Tech divers maybe but I wont ever do any tech diving. No desire for that activity here.

Now $30K sounds like it may go a bit further elsewhere on this planet but the truth is that the equipment you will be using will not be had for such a substantial savings that you would be able to have a years rent, staff salaries, advertising budget, etc...

Just look around and see what you can get stuff for.

Off the bat, I see you stated 20 tanks.
so thats 2 tanks per person x 8 = 16. your 2 tanks and maybe another 2 for backup.
At $150 a tank, thats $3k.. leaving you with $27K

Now lets get some air right? Ok system would run you what? 10K? $17K is now what you are left with.

1 set of gear (BC, regs, Weights, weight belts) $750 sound fair? x how many? say 12? 8 plus some extras just in case. thats $9K so you now have $8K

We still dont have a location. Nor do we have this gear shipped there. Nor do we have a place to stay. Or a boat. Or customers. Or inventory. It goes pretty quickly. I think you need to keep the dream and either find others who are interested in partnering with you $ and with their time or save up a bit more. Some distributors will require that you buy X amount. That means you have to spend a bit of coin on day one to have inventory and hope that what you bought is decent and in demand enough that you can sell it all and buy your next batch.

Dont forget that we need to display the inventory. Utilities? Need to cover that. Its fun opening businesses but its more fun when you can do it with your eyes wide open to all the costs and come in able to cover it all.

Are you an instructor? I would guess that with just 25 dives, you are not yet. 1 month of training and you can be an instructor and many here would tell you that its not adviseable but your 1 month of training would be 1 month more than any new diver you meet that you go to train at your location. So I would not let that deter me. Every day you work, you get more experience so in 1 year you would have another 200+ dives and experience with issues.


So.. how much is this girlfriend wanting to help? Does she want to instruct too? What if you get sick? Who is taking the divers out that day?

Hope this helps some so you can clear the dream fog and get focused on making the dream a reality. I know I plan on having a working retirement owning a dive center (shop, charter and whatnot).. I dont want to instruct. I dont want to be a DM.. I dont want to do much more than goof off when I retire. So getting to tinker with gear, dive whenever I feel like and just hang out by the water sounds like a decent plan to me. (I will add that we are going to be Jetset in case any storms come in. We will bail, go relax in europe and then return when the weather clears to assess the damage and get the ball rolling again).

Wow..some inciteful posts here....love to see and hear the good thoughts and ideas!

So you want to run a shop and a dive operation? I don't think $30k will by any kind of decent dive boat much less a shop and all that goes with it.

Dream and maybe one day have a go. I started my company in the south of Thailand almost 2 years ago. It is a very steep learning curve and in a resort location like where I am the job is so much more than diving! My company is small, but we are about to put a second boat out. The sort of money you are required to invest in order to set up a company of my size in Thailand, your $30k will meet about 20% of that start up cost.

All that said, the suggestion that you buy into an already up and running company as a shareholder and worker is the best suggestion.

Thinking more into this. Ok, the setup cost, maintenance, staff salaries, there must be a hundred things where the money goes. You have to love diving and like to be with people, this is after all a people business. Go into a dive centre to be met by some burnt out misery who says, "sign up here, maybe we go later this week", sure you're going to book a whole week of diving with him.........not!

You will deal with people, divers, families, agents, hotel managers, restaurant owners. That's for me anyway, it's not just a life in the sun. Good choice to stay away from Koh Tao, their idea to attract more customers is to cut prices and not add value to the service, hence you can do your Open Water course there for 8,500 baht (about $250) including 3 nights accommodation. There are about 45 operations on that island all trying to undercut each other. Good for the backpackers, but at that price something has to give.....