Goal: give the best possible experience to the customer who wants to boat on Minnetonka.
I’m a firm believer in having a solid goal for any company and making that its pure mission. None of this bullshit about “making the world a better place” but something that is well-defined, never fully achieved (because you can always be better), and that eventually leads to ROI. An increase in experience doesn’t mean a decrease in ROI.
I also want to expand the goal from surfing to boating & not just on a Pavati. Hear me out for a bit though on this.
I really like this idea but I think it hinges on a few things including:
- Weekend Rentals
- Weekday Membership Club
- Some sort of commission from Pavati on selling these and a commission on more reasonably priced boats too (or at least some kickback)
- Being able to work with hotels / other places to include them as part of their “services”
I think the strategy revolves around:
- Weekday Membership Club
- Weekend Rental Experience
- Decreasing risk
- Increasing ROI on the boat
Weekday Membership Club
I was wrapping this up and then the membership idea came to me. This is how you make it all work:
What if you had a “weekday membership club”? Let’s say your boat with the driver and peg boy is running every day between 10-6pm on every weekday. You get 20 people to all pitch in $7,500 for the whole entire season. If you’re a member you can, at any point in time during a weekday, head over to the pier and be picked up at the top of the hour (and dropped off at the top of the next hour). You do as much surfing as you want and you solely pay for the gas.
As a member, you can now roll up at any point and surf behind a kick-ass pavati and simply at the end of the month you get your gas bill. Now, because it’s only 20 people, you probably won’t ever have to worry about wait times and since everyone would know each other then it’s also just a fun “let’s kick back on the boat” when you’re not surfing.
This is how you make this idea work: you have some sort of weekday membership like a gym where people can surf behind the best when it’s not rented out on the weekends.
When it comes to the actual numbers, at $20 / hour for driver & 20 for peg boy (which is being generous), you’re looking at 40 / hr or, at 200 days for the season @ ~10 hours a day, 80k for drivers meaning your profit is 70k just from the memberships not including weekend rentals or commissions. You could get rid of the rope boy and now you’re down to 40k in payroll so 110k in profit which is almost your break-even point.
Weekend Rental Experience
When a person opts to rent out a boat, the process should be as seamless as possible where if I’m staying at a hotel / area then I can call the concierge who then calls Surf Minnetonka to set up the reservations. I should be able to be picked up at any part of the lake, walk onto the boat with the drinks I want stocked & cooled, a driver & peg boy should be supplied, and the boards already lined up for what I want to do that day (ski, surf, tube, etc).
Put it this way: you don’t get your own catering on a private jet, you just say what you want and you get it.
Here’s my thinking:
- Someone calls for a given day for the boat. They pay the upfront fee.
- They give a list of all the drinks they want on the boat (including booze… obviously) + a place & time to be picked up + what they’re looking to do for the day
- All rentals include a driver & peg boy and equipment included in the fee
- Driver & Peg Boy grab everything beforehand to stock the cooler, fill the tanks, get the equipment ready, etc and then off they go
- Day commences
- Client pays for their drinks + any gas at the end
Imagine you’re on vacation and want to surf. How the hell are you going to get the drinks you want? Or the right equipment? And the last thing you want is to be nickel and dime for “skii’s are this much” but instead just have the upfront amount of a few k for a weekend day and maybe 2,500 on a weekday.
One of the main reasons why you want a dedicated driver & peg boy is because then you can have the boat be insured easily (or at least for a hell of a lot less). Also imagine that it’s July 4th and everyone is partying. Not only does having the driver & peg boy increase the experience but it greatly decreases your risk because now you know you can drink & not give a damn. This is absolutely essential to the idea: you must have a driver & peg boy.
Another thing is wrapping everything in an LLC. This gives you personal protection however you cannot use the boat for personal gains; you technically have to actually “rent” the boat from the company to yourself under fair market conditions. However, you could technically have a “last minute boating” where you pay the company significantly less, even just a few hundred, to be able to use the boat without driver & peg boy.
Getting into the details a little bit, if you say your whole up-front investment is 500k w/ 50k being equipment, lawyers, corporate setup, website, and all that bullshit then you get the boat for 450k. Over a 3 year depreciation period you’ll then want to make a minimum 150k / year for break-even on the boat but realistically closer to 200k for the season. If you assume 200 days in a year then your break-even is just 1k / day in profit (or probably closer to 2k / day after expenses such as driver / peg boy).
Licensed Seller / commission / dealer
I think this is what the whole plan revolves around: can you actually sell these boats and get some sort of cut? If you do then this is an absolutely pure profit center. Also, try and get a commission / referral fee from the local dealers too who will give you 5k if you recommend someone to them. Or whatever amount you want.
Simply put: offer weather insurance for non-refundable 1,500 for the day. They can cancel at any time for a full refund on everything ex. drinks & gas. That way you make your guaranteed money for the day no matter what & you still make an extra amount for days where it’s clear & nice.
Hell, if you have your drivers then simply rent them out to other people. This probably won’t be a huge income source and it would take some tweaking for the idea but I know I’d absolutely pay $50 / hr for someone to come out with a peg boy and drive my boat while I surf
If you do this then it might be worth it to get a cut at the gas station (but charge the boat renter the full amount) or do what you were saying before about setting up your own gas pump
The last thing I’ll say is that if you really wanted to reduce your risks then a potential might be to see if some of these other boat dealerships won’t just let you rent a used boat for the day. It’s not a Pavati but can you get another awesome boat and throw the dealership 1k to rent it for the day & sell it out for 3.5?
You might have to pay for an extra business license to operate in the public waters but I’m unsure about this