Scuba business, fractional ownership, start over or buy exhisting?

[Gdaaym8z]

I was not sure where was appropriate to post this, I hope this forum is ok. I am looking into purchasing an exhisting scuba business (boat) and am curious if any of you have owned, own or would like to own a scuba related business. I keep running into very pessimistic people that seem to have nothing but negative things to say. "The two best days of a boat/shop owners life...the day they bought, and the day they sold" so I thought I would post here and get the opinions of divers who are as addicted to the sport as I am. I am currently a business owner (construction) and with our wonderful economy am facing closing the doors, my thoughts have been lately that if I am going to be scraping by, I may as well do what I love while doing it! I have a small nest egg to invest in a new business but will most likely try and find a partner or two for this scuba venture. So my question is this, would you consider purchasing a small but established business, or would you try and go from the ground up? I realize that I am being a bit vague on the business I am looking at....don't want it swooped out from under me! I have several good ideas for marketing and have some great connections in the travel industry and may be able to get contracts with some of the local resorts. What would you do??? I'd be happy to give more details in a PM if requested. Thanks

 

[jorge.a.mahauad]

Hello G,

I find that the pessimistic outlook is a matter of attitude. Many business owners have been in the sector for so long that they have forgoten what innovation is. The diving business (as many others) is facing a revolution powered by technology and many business owners have not been capable of keeping up with it. This has affected the local dive shop business model.

On the other hand, owning a boat is owning a problem. My family owns liveaboards and I have worked for the company for a while. Owning a boat is a real pain but that is what is needed if you want to be a dive operator in some areas. I think that everything comes down to the attitude you choose.

As for the business itself I would say: buy a small divecenter that is working and has a good cash flow. If you can find one of those weared owners you can get a good price. Then invest your money and love in making it work. Good innovative marketing ideas will be an asset in your business. The fact that you come from another industry will give you a clear mind!

One word of advice from my perspective: you need to be a dive operator in a diving area, not a local dive shop away from the ocean...

I hope this helps,

Jorge

 

[Gdaaym8z]

Jorge,

Thank you for your insight. I do have a marine mechanic background...though it has been many years, so boat maintenance should be no problem. The business I am looking at is in a dive destination and has been in operation for quite a few years. I'll keep posting as this progresses.

Evin

 

[Thalassamania]

I think that dive shops are entering into a period of redefinition, retrenchment and realignment. That means that a few, who judge right and are out just slightly ahead of the curve will make a lot of money while those who are too far ahead or too far behind will loose the money the others make, statistically I say its not a good time. If you have strong travel contact then think of ways to package and sell strong travel products ...that'd be my advice.

 

[TropicRat]

G:
What is the level or unemployment in the proposed area? Is there a good flow of tourists with dollars to spend? The economic outlook of the area should be kept in mind in times like this.

Is this in an area not generally effected by the economic downturn?

If construction is down and people cannot pay their mortgages, what factors point to them spending on sport diving.......?......Just asking, as I cannot see them seeking to spend in leisure activities.

Two dive gear retailers closed up this year in the South Florida area- but that should help the survivors.

Just ask'in

 

[Gdaaym8z]

The area(s) I am looking in are resort areas, so I know there will be people there, granted there may be fewer than when the economy is up.

 

[Sinbad the Diver]

I'm not in the dive industry, but I used to work in the travel industry and watched it be completely rebuilt by many of the same market forces that are impacting the dive industry now. Specifically, I worked with travel agents.

At the time Orbitz was just being created and a few online airline sights existed. The airlines themselves were in the infant stages of selling online themselves. Prior to that travel agents had been little more than ticket printers who received a fairly big payout for distributing tickets. First paperless tickets, then the internet and the airlines cut back on what they would pay agents to a point where the typical model of the retired housewife with a ticket printer as an agent was no longer viable. My favorite experience was at a focus group where a little old gray hair in Miami told us we should be forcing the internet to shut off. We asked her to clarify and if she meant try to shut down on-line sellers and she said "No, the internet is the real problem, without it, these people could not steal her business, we need to get it turned off." While on the extreme edge, that was a typical refrain from the majority of the agents we dealt with, the fight should be to end internet distribution to protect brick and mortar operations (sound familiar?).

But if you notice, travel agents still exist and those that are still in business do pretty well. Rather than trying to stop inovation and prevent the industry from moving forward with technology (which is what I see many in the scuba industry doing), they embraced the technology to make their businessnes more profitable and found niche functions or value adds that made them valuable to the consumer. Excursion planning, business travel planning, etc are hugely profitable if you understand the market and are able to adapt as things change.

I think for most, the scuba industry is dying, because most specialty business owners are not very good business people. But, as in all things market driven, build the better mousetrap (or at least convince people it's a better mousetrap) and they will beat down your doors to buy it.

Good luck.

 

[Sinbad the Diver]

The area(s) I am looking in are resort areas, so I know there will be people there, granted there may be fewer than when the economy is up.

which means if you have the cash to survive as things turn around, you'll be positioned to reap the rewards when it does. If it doesn't turn around in the next 12 months....well then we all have bigger problems....and that's a conversation for the pub.

 

[Jim Lapenta]

If the operation is a shop and boat consider working with independent instructors either on contract or as subcontractors. I see that you are not an instructor. The shop I work with is owned by a diver but he does not instruct and has no desire to. There are 6 of us from 3 different agencies that use the facility and send our students for gear, rentals, air fills, etc. As such he has a much greater customer base than if he were affiliated with one agency. Also he does not have the headache of carrying training materials as we provide them to our students and right now we are all in a position where him carrying materials would not benefit him at all. We either get the same price he would or better! Also by opening yourself up to different agencies you get the added benefit of referrals you either would not get or in some cases could not do.

If you are going to be taking divers out have guides, captains, DM's, etc that will respect the recommendations for divers as it relates to depths, difficulty of sites, as well as what they can see. The huge eel at 90 feet is not a big draw when all you have on the boat are OW divers with a 60 foot recommended limit and piss poor buoyancy skills who suck down an 80 in 45 min at 40 feet. Yes there are ones that bad. Seen em, been on boats with em, and watched the DM have to share air with them. Operate a safe, friendly, competent business and you will survive. Open it up to a bigger customer base by being beholden to no one agency and you will do even better. A bunch of stars mean nothing, safety and competence mean everything.

 

[Web Monkey]

Scuba business, fractional ownership, start over or buy exhisting?

Whether or not you can make a boat or a dive shop work really depends on how deep your pockets are and how good you are at running a business, and I can't make any judgement on either.

I can say, however that if you can't do this either alone or mostly alone, don't do it.

Nothing will produce more indecision, inertia and gridlock than equal partners. Someone has to be #1. If you can get money from others, and 75% is yours, that's fine. If it's 50/50 or 33/33/33, you'll be doomed before you start.

Terry