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Your Jet Ski Rental Business: Choosing the Best Location

11/18/2020

Starting a jet ski rental business can be a relatively low-effort way to generate income. With the right initial setup, you can maintain a relatively hands-off business. One of the most important factors of success in this venture is the location of your jet ski rental operation.

Not all bodies of water are well-suited for jet ski operation. Some bodies of water may lack the popularity required to remain profitable. In other situations, there may be environmental or legal issues that prevent the operation of watercraft powered by gas motors.

One way to expedite the selection of a location is to start your rental business at an existing marina. The existence of a marina is a good indicator that the location meets the very minimum requirements for you to consider setting up shop.

Table of Contents

 


Contact Marinas in Your Target Locations

Do some research on the marinas in the region you’re considering for your jet ski rental shop. It’s important not to limit your research to a quick online search.

 

Some marinas and tourist locations may understand digital marketing better than others. If you only research the marinas with good search engine rankings, you could miss out on low-competition access points that could sustain a profitable rental business with natural foot traffic. Keep in mind, if it’s difficult for you to discover a marina, you shouldn’t count on the marina’s marketing efforts to bolster your rentals.

13 Location Factors to Consider

Here are 13 location-dependent factors to consider that will affect the success of your jet ski rental operation.

1. Wake Zone Proximity

How close is the marina to the waterbody’s wake zone? In addition to the marina’s own posted rules, different local, state, and federal rules can affect the no wake zone surrounding each marina. If there isn’t immediate deep-water access, or there are several bridges between the marina and wake zone, it could be cause for concern.

 

Get wake zone information from each marina you’re considering for two reasons.

  1. Exorbitant no wake restrictions for personal watercraft (PWC) could lead to poor customer service. If you’re renting by the hour and it takes five minutes to get to the wake zone, you will hear about it in your customer reviews.
  2. Limited no wake restrictions could lead to equipment damage. If a marina is adjacent to a high traffic area with difficult-to-enforce no wake zones, your fleet could become damaged in a short period of time.

2. Marina Management

Interview management at each marina that you contact. The popularity and cleanliness of each marina will have a significant impact on the perception of your business.

 

It’s best to find out about the physical and competitive environment during your location search so that you don’t struggle after a lease has been signed. Here are some of the main questions to ask marina stakeholders during your research.

Cleanliness

In Malcolm Gladwell’s book, The Tipping Point, he theorizes that crime and vandalism are the result of an untidy and unkempt physical environment. The impact that a professional physical environment has on your business should not be understated.

 

Probe marina management about the last time the docks were renovated, and how often maintenance and cosmetic improvements are made. A professionally operated and maintained marina will improve its annual levels of tourism and feed your jet ski rental business.

Marina Occupants

Don’t limit your research to the marina owners and managers. Contact the other businesses at the marina for a more complete picture of the location.

 

How long have the other tenants been there? If all the tenants are new or nearly new occupants, it could be cause for concern about poor marina management.

 

Do the tenants plan on staying? If the marina tenants don’t plan to stick around, it could be a symptom of the low levels of foot traffic to the location or issues with management or the local authorities.

 

Ask about any other concerns or complaints from existing tenants:

  • Is the marina large enough to support profitable traffic levels? 
  • Are there any hidden fees for business tenants?
  • Is the dock access or slip size prohibitive for PWC rentals?

 

It’s not a bad idea to ask management these questions, but tenants are less likely to sugarcoat the real issues.

Marina Owner

Try to contact each marina owner to learn more about their business development patterns. You will likely need to engage in some form of advertising or marketing, but it could reduce your individual financial burden if the marina is also engaged in attracting foot traffic. There could also be group advertising rates for tenants that you should know about before deciding on your location.

 

Beyond marketing and advertising, what does the marina expect from occupants? What is pricing like, and what additional fees are occupants expected to cover? There may be rigid signage or storage requirements that would be helpful to know about upfront.

3. Accessibility and Parking

Consider how conducive the parking is to each location. You may find a very popular marina, but if it is adjacent to a nearby city, it may be difficult to reach your target customer due to limited parking. 

 

For example, it can be hard for customers to reconcile metered city parking with your hourly rentals. Your target customer may be more interested in a marina that has a large parking lot with no additional fees. 

 

If the marina has a lot that only supports a limited number of vehicles, you will be limiting the growth of your fleet years down the road. Consider the marina’s current accessibility with your goals for two years, five years, and even ten years into the future. Trying to move locations after several years of successful operation is a hassle that you could avoid by doing your due diligence today.

4. Business Synergy

In step two, you should have interviewed the marina management and tenants. The other tenants and services at the marina could have a big positive or negative impact on your rental business.

 

Does the marina offer:

  • Courtesy shuttles or bicycles
  • Volume fuel discounts
  • Security

 

In addition to services that will help your business operate smoothly, what products or services do the other tenants provide? For example, the following local businesses could help streamline your jet ski rental business:

  • Shoreside convenience stores
  • Shoreside catering
  • Shoreside restaurants
  • Yacht clubs
  • Boat maintenance shops
  • Diving charters
  • Fishing charters
  • Towing/Salvage services
  • Kayaking
  • Parasailing

 

The other tenants and local businesses could make the marina a complete tourist attraction. In addition, you could work with the other businesses to offer multi-service packages or reduced rates to increase your revenue streams.

5. Competition

The flip side of the coin is that other tenants and local businesses could cause competition. Boat, kayak, and paddleboard rental businesses aren’t in direct competition with you, but they do offer watersport alternatives to your jet ski rentals. Different levels of competition could raise the minimum required marketing budget for your rental business to thrive.

 

Further, check with each marina to make sure their policies or tenant agreements don’t prohibit your jet ski rental business from occupying slip space.

6. Fuel Pumps and Fuel Prices

Most marinas offer either gasoline or marine diesel fueling amenities on-site. Inquire about tenant or volume fuel discounts that each marina may offer.

 

Consider market prices of fuel as well. After you calculate your fixed costs, run a few case tests on your variable costs like fuel. Is fuel at a market low right now? If fuel prices rise, can your rental prices keep you profitable, or will your business venture be in danger? This isn’t necessarily tied to your location, but it’s something to keep in mind.

 

Check with the marina if gas cans or mobile gas dispensing units can be brought on-site. Although this might be an inconvenience for your staff, the cost saving could be significant in the long run. 

Slip Size and Pricing

Find out more about each marina’s dockage or slip pricing. Does the marina operate on a flat fee vs. commission structure?

 

Some pricing models charge for standard sized slips, while other marinas may charge per foot of dock. If your marina charges per foot of dockage, see if there is a required minimum.

 

You will find that month-to-month rates are higher and vary between peak months and off-season months. It’s also common for marinas to offer lower monthly rates for slip holders that commit to a yearly lease.

 

Ask about limits on unit per slip as well. You might calculate that a 25’ slip will fit four jet skis, but the marina may limit each slip to two pieces of equipment. These details can have a major effect on your profitability, so don’t leave them to chance.

7. Marina Utilities

The more popular marinas will boast WiFi availability for slip holders. If you accept in-person payment, make sure you know about the facility’s access and pricing for WiFi ahead of time, so you can configure your point-of-sale system.

 

Other marina utilities may vary. For example, will you need a public water hookup or electricity at your slip? If you need electricity, will you require a 30- or 50-AMP hookup? Does the marina build electricity prices into their dockage prices even if you don’t plan on using it?

 

If you don’t anticipate needing electricity, water, or pump-out services, the utilities may not be a critical detail for you. 

8. Proximity to Tourists and Travelers

The marinas you research will draw from different crowds. Some marinas remain effective by pulling from a gated community, country club or golf course, while others rely on popular tourist regions.

 

Your jet ski rental shop will likely target tourists and travelers, so try to avoid marinas that mainly serve quiet communities unless you’re focusing on that niche.

 

A marina’s proximity to areas of tourism will also affect your level of marketing investment. Natural foot traffic can help to keep marketing costs low, but the marina’s slip pricing will probably reflect that popularity. On the other hand, a less popular marina may offer attractive fees to tenants, but your digital and traditional marketing will require a larger investment.

9. Pricing Integrity and Profit Feasibility

Using the slip pricing, fueling, and competitive information that you’ve gathered so far, try to create rough financial feasibility tests for each location. You can use spreadsheet formulas with financial assumptions for each marina that include:

  • Slip rental costs
  • Fleet maintenance costs
  • Average monthly fueling costs
  • Market hourly rental rates for peak season and off season

 

Then use these figures to determine revenue required to break even. This will help you

project rental figures you need to break even, and rental figures you need to reach your target profit.

10. PWC Rules and Regulations

Depending on the state and locality of the marinas you research, there will be different licensing and/or educational requirements for operators and renters. For example, this guide by the National Association of State Boating Law Administrators (NASBLA) offers data for each state regarding requirements for PWC operation. Some states and localities require boating safety cards and on-site safety courses.

 

You could have requirements of your own as well. For example, on top of any state or local rules regarding the operation of PWCs, you could require renters be a certain age, and provide photo ID and a signed waiver.

11. Ability to Get Workers’ Comp

Depending on your business structure, you may or may not be able to get workers’ compensation if you are injured while working. The overwhelming majority of all businesses in the U.S. are sole proprietorships, but due to the nature of Jet Skis, it may be in your best interest to limit your personal liability.

 

The laws for workers’ comp vary from state to state. In many cases, business owners are not automatically covered, but can opt in for coverage. Visit your state-of-interest’s Workers’ Compensation Commission or Bureau of Labor website for more information on how to obtain coverage.

12. Water Boundary Restrictions

As discussed in section one, there may be restrictions for PWCs in the areas surrounding each marina. There are generally state and/or local rules regarding no wake distances from public and private shorelines, bridges, and case-by-case no wake postings.

 

Your water boundaries will depend on whether you’re operating your jet ski rental business on a river, lake, gulf or ocean. You can get more information from each marina you contact, but you’ll want to familiarize yourself with the federal, state and local laws for the body of water you’re targeting.

13. Environmental Laws

Due to their protection by environmental laws, some waterbodies aren’t favorable for water sports. Marina operators may be able to provide more details on the environmental feasibility of setting up shop at their location, but it’s ultimately your job to check with regulations and laws in the area.

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