Is the sharing economy right for me?
Renting out your boat, offering captained charters, or renting out your water sports equipment can turn your property into a lucrative business. On GetMyBoat, we even have captains who turned their boat rental side hustle into their full-time job!
There are two ways to join the sharing economy for boating enthusiasts:
- Start sharing the boat that you already have.
- Buy the boat that you will rent full time or part-time.
Either route you take, you’ll need to do research before making the leap into the business. If you already own a boat, the transition will be easier in terms of upfront costs, but you’ll have less flexibility in matching consumer demands to your boat. If you are planning to invest in a boat, you have the chance to research which types of boats are the most desired by renters before buying your watercraft. It’s crucial to take these steps seriously, to determine if this business will be a profitable endeavor for you.
Here are steps you can take to gather information on which types of boats or experiences are popular in a given area:
Check out GetMyBoat and get an idea about the types of boats that are listed in your target destination. If you are already working within your local boat scene, you might want to compare your watercraft to what is currently being booked. Remember, not all locations are created equal and you’ll want to make sure there is plenty of demand for your boat in the specific area you’re looking to operate in. Popular boat rentals in Miami are going to be far different than the demand for boat rentals in Michigan, so taking note of what is wanted in your area is crucial.
Check out the boats with the most reviews. On GetMyBoat, we only allow reviews from customers that have completed a trip with the owner. Other platforms allow for non-verified reviews and this generates inaccurate data. Read over the reviews for boats that are most similar to your own. Quantify how many are there in a given month, check what price it’s posted at, and note any other details on the listing. You should be able to use this data to determine your own rate and the local demand for renting your boat.
Plan your payback period
Now that you have an idea of the demand and value of your boat in your area, it’s time to start calculating all financial aspects of this endeavor. There are significant fixed costs upfront for people looking to jump into the boat sharing economy. To plan the payback period, you should work backward. Calculate how many times per month you will feasibly be able to rent out your boat. Take that number and work backward until you have earned enough to pay off your boat.
You will also want to factor in the number days per year that you’ll want to use the boat for yourself, calculate the costs associated with delivering the boat (if you choose to offer that service), and add up the time you spend organizing rentals and doing other administrative tasks. If you’re financing a boat, don’t forget to add up the interest you’ll accrue on your loans and factor that into your calculation.
Other expenses you need to plan for are the maintenance, storage, slip fees, gas, insurance, and your time. You also have to consider marketing and advertising costs, unless you use a marketplace like GetMyBoat. Using our platform is a great option since you don’t have to pay for marketing or advertising to access thousands of potential renters. You’ll only get a tiny percent taken out of a booking once it is confirmed.
You will need to be careful in evaluating marketplaces, as not all are created equal. For instance, you want to find one with a global rental base, has reasonable fees, and has a chargeback protection/fraud checks, all of which GetMyBoat has. Make sure you research this carefully and read the fine print, as some companies will charge you up to 35% to list with them. High fees make it nearly impossible to become profitable in this industry.
After running all the expense numbers against potential bookings, if you’re still on the positive side of cash flow, then you should consider moving forward. Always track your expenses closely, as they can add up quickly. You want to make sure that your revenue grows faster than your expenses.
It is highly advisable to speak with a financial planner to get assistance in calculating all your costs, as well as determining what you may be required to pay in taxes.
Build a solid foundation on the platform as fast as possible
Once you have your finances aligned and have a boat ready to rent, it’s now time to post your listing to an online platform. GetMyBoat is the world’s largest boat rental and water experience marketplace. Our website will open your boat up to the largest possible set of renters from all over the world and protect you with assurances like fraud checks on renters and chargeback coverage.
Once you identify the largest potential for customers, you want to build a solid foundation as soon as possible with that platform. By this, I mean getting a comprehensive boat listing with lots of details on what you offer with high-quality images. Having intimate knowledge of the surrounding area will help you construct some pre-packaged trip options that highlight some of the most desired destinations. This helps the customer make a decision when you give them complete itineraries rather than let them try to construct what a perfect day on the water would be. The less work someone needs to do to plan for their boat day, the better. Also, create all-inclusive pricing as many customers will not take kindly to paying for items that are not listed upfront and this might result in a less than a 5-star review.
One item that will help the most after you get the base listing together, is to get customer reviews. Since GetMyBoat only allows verified customers to review your services, you should consider dropping prices when you first start out.
This will help you ramp up customers and get them to leave reviews of your service. Sharing economy businesses rely on user reviews – the more you can get, the easier it will be to grow and build your company.
Also, make sure to take photos of their rental/user experience and post them to the listings on your sharing economy site. Reviews and action shots from your rentals build social proof. Once you have solid social proof you can increase your prices to be more in line with the market.
Abide by all legal regulations
Paying attention to safety and legal regulations, especially in the boating industry, is critical. They can be complex depending on where you’re located, but you don’t want to be caught off-guard and end up having to shut down your business due to not taking the correct legal steps. Do your research, whether it be through the Coast Guard, local licensing organizations, or other safety organizations to ensure you’re building a safe and legal operation. Always stay up-to-date with any policy changes, make sure your boat is outfitted with lifejackets and other safety equipment.
To grow or not to grow, that is the question
While it can be easy to get caught up in the excitement of the sharing economy and the massive potential for success that it has, it’s so important to start small before looking to grow too fast. First thing you should do is make sure that your one vessel is proving to be profitable in your given timeframe. Next, unless you live in an area like Miami that has year-round boating, you should get a year of renting under your belt before growing.
Throughout the course of the year, you will learn a lot about what customers want, how much you can charge, the volume of bookings, and have a much better idea of expenses. With all this data you will be able to make the call if growing the venture is right for you. Here at GetMyBoat we often see single boat ownership grow into a multi-boat fleet in a matter of years. The main goal is for you to be successful in doing what you love, boating. We hope with these tips that you will be able to make your endeavor lucrative and also grow to be as large as you would like.
Whether you’re new to the boating industry or a seasoned veteran, maximizing your business potential by tapping into renter markets and using apps to rent out your boats is a game-changer. With a supportive platform behind you, you’ll have access to customers and financial protection on all bookings.
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