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Cost of running a diver operation

Discussion in 'Business of Diving Institute' started by Kfay, Apr 22, 2019.

  1. Kfay

    Kfay Angel Fish

    # of Dives: 200 - 499
    Location: Florida
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    Hey Everyone!
    I am posting this purely out of curiosity. I do not plan to start a dive operation any time soon. I would like to know what the foreseeable overhead cost would be for running a 6 pack boat. Let's say the dive sites are no more than 10 miles out. I know there are a ton of variables that would go into this I am looking for a rough estimate. What is a good margin for a dive charter to make? Just trying to learn a little bit about the business!
     
  2. Wookie

    Wookie Secret Field Agent ScubaBoard Business Sponsor

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    It's a great thing to analyze your costs and examine the market before you get in.

    Now, and I'm not being snarky, but there are some things you need to know about the dive charter business. It doesn't matter what market research you do, or what amenities you offer, you have to undercut the competition on price or you won't get the first customer. Divers are exceptionally cheap, so what you find is that when you pay for your boat, insurance, gas, crew, and your profit, you will be about $15 a head over the next guy, and so you won't make a dime, because all of your clients will go to the next guy, unless you have a bang-up website, which may or may not cost you plenty too. So you have to cut costs somewhere, so the first thing you lose is the deckhand. But that isn't enough, so then you drop the insurance. Or you eat ramen for a while. Because it takes years to build a clientele and repeat business, and you get stabbed in the back by every newcomer who decides to make a living hauling divers.

    I did it in Key West for 20 years. I made money at it, and I did it right, but it was a constant struggle and balancing act deciding which trips to run even though they would lose money, which trips to run as money makers even if the weather wasn't great, etc. I got to live in Key West, and I made $30,000 a year. I didn't do it to make money, but still, I am worth a lot more than that.

    My advice is and will always be to charter someone elses boat. It pays way better.
     
  3. caydiver

    caydiver Manta Ray

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    Haha Wookie you got it right!! Not all divers are cheap thank goodness but many are looking for the cheapest possible scenario. Also some divers are very very full of themselves. There are many with hundreds of dives who think they are a gift to behold who have just spent their time compounding a poor skill set into a terrible skill set and make it very hard for DMs to maintain safe diving protocol while avoiding calling them out even after repeated issues. You also have some of the newly certified who have a couple of courses under their belt but very little time honing skills who have become experts over professionals and those with thousands of dives. (Not saying all pros are great but hopefully if you are hiring you are very selective especially on a six pack). At least there is hope for that group! That said there are so so many truly wonderful people who are a total delight to be on the boat and in the water with it balances out. There are some who when they are back every one is totally excited to see them. There are newbies who just totally get it and make you feel lucky to be able to see the joy of diving through fresh eyes again!
    I think the cost of insurance and maintenance are my biggest worries. The insurance at least is pretty constant but maintenance on the boat, vehicle and gear can easily eat through all the profits in a great couple of months and then some. Where we are we add in the costs of work permits (which have mandatory health insurance and pensions — not sure if that is everywhere), and a often a long wait time for any parts which is a big issue with the boat. Busy holiday weeks need to be money makers but if the weather craps out you don’t get a do over week.
     
  4. Stoo

    Stoo NAUI Instructor

    # of Dives: 5,000 - ∞
    Location: Freelton & Tobermory, Ontario, Canada
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    Not to wander off topic, but up here in Canada, where the dive season is MAYBE 4 months long for about 95% of divers, the standing joke about the dive business is this:

    Q: How can I make a $1,000,000 in the dive business?
    A: Start with $3,000,000.

    With a boat, I'm sure that's even worse. Friends I've known who ran charters all did it as a labour of love, and a way to get someone else to pay for their new boat.

    And yup, it's all fun and games until the transmission blows.
     
    markmud and caydiver like this.
  5. chrisch

    chrisch Solo Diver

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    I have lost count of the number of spreadsheets I have done on this subject. They all confirm the three above posts. I am not 100% sure that all divers look for the cheapest outfit, but they do all expect to be taken to the best sites and the skipper to know the site and how to dive it. So the first "overhead" is that knowledge.

    I don't know where you are looking at but here (UK) there are tides and other factors that limit when and where you can go. You need all that knowledge and to be able to confirm if a site is going to be available due to weather etc.

    You can do the basic financials easily enough. Depreciate the boat at say 10% a year and fuel costs based on the motor size. Safety equipment can easily add significant amounts to that. I have owned a few boats over the years and used that experience to put some numbers into the spreadsheets. Then look at the cost of local boat spaces and multiply them by the number of divers the boat can carry and adjust that to a 65 percent occupancy rate to allow for people that don't show or cancel.

    Right now my spreadsheet goes negative. Guess yours will too.
     
    markmud and caydiver like this.
  6. Vicko

    Vicko Barracuda

    # of Dives: 50 - 99
    Location: Komizža, Croatia
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    I don't see a way how to make a profit on a small dive boat. Just fixing the boat up every season would double it's cost in a matter of years and depreciate it way more then 10% a year. Except cheep divers also rarely watch out for other peoples property.

    If I was starting out now I would be organising trips and renting boats for them. Divers won't pay extra for a good dive, but they will pay way more then expected for someone who organises any kind of dive as long as they don't have to do anything except climb aboard.
     
    caydiver likes this.
  7. Wingy

    Wingy Solo Diver

    # of Dives: 0 - 24
    Location: Perth West Aust.
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    If youre just looking at the business side of things and all the logistics you will get a lot of value out of reading Scuba Professional by Simon Pridmore.
     
    caydiver likes this.
  8. chillyinCanada

    chillyinCanada Solo Diver Staff Member

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    "A boat is a hole in the water that you pour money into"
     
    Vicko likes this.
  9. Wookie

    Wookie Secret Field Agent ScubaBoard Business Sponsor

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    I still have a number of them. The number is not 1
     
    Johnoly and chillyinCanada like this.
  10. caydiver

    caydiver Manta Ray

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    Well maybe. You are always putting money into at least one!
     

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