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  #1  
Old 01-10-2008
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IS this crazy?

Here is my basic concept. Tell me what you think:

I will buy a good, solid, blue water capable, 3 cabin, center cockpit cruising boat. A Stevens 47, Gulfstar 50, Endeavor 52…. The boat choice is still to be determined (and I am open to suggestion). The boat will be purchased for cash, no boat loan.

The boat will get a comprehensive refit with live aboard cruising in mind. This means a large battery bank, smart controllers, Inverter/Chargers, DC Genset, wind generator, solar panels, watermaker, radar, chart plotter/GPS, SSB, Autopilot, windvane, DC fridge and freezer, …. Basically, the boat will be refit using all current gear with everything really well integrated. The entire point is to have the boat perfectly setup for modern live aboard cruising. All systems would be new or near new, all would be chosen as part of an overall integrated system and the boat will be in excellent condition.

This doesn’t sound like a charter boat does it? That’s the point. I am looking at starting a different kind of charter boat operation. Rather than have newish, lighter built (built to a price) and very simple boats with minimal systems aimed at the cheap bareboat charter trade, I am targeting a different market. I am not looking to be just another vanilla charter boat for the party crowd looking to daysail drunk from anchorage to anchorage (not that I do not enjoy that!).

I would be offering the following:

1. Sailing School. Crewed by an experienced/professional Captain fully certified to instruct in all the coarses, week long liveaboard ASA certified school offering 101, 103, 104, 105 and other certifications. This would probably be offered in the BVI during the winter season and in New England during the summer.
2. Crewed Cruising Charter: A seasoned professional captain would take up to 6 guests on a week long vacation cruise. Guests would have the option to participate in operating the yacht as much as they wanted and to get as much hands on experience using all the gear and learning about all the systems from the qualified Captain as they want.

This last one is the real target and what I view as the best value proposition in this idea:


3. Crewed, Cruising Systems Instruction Charter:

This would be a week long training charter but with plenty of time built in to have it be a great vacation at the same time. It is assumed that the guests already have sailing experience and are giving serious consideration to live aboard cruising. The Captain will lead the charter guests through a structured, comprehensive system by system instructional/training coarse. Guests will learn about installation, maintenance and operating all systems such as a current tech integrated charter plotter/GPS/Radar/ Autopilot…… watermaker…. Electrical system (all of it, integrated: battery bank, chargers, Genset, solar, wind, inverter )…. Windvane, SSB and all the other gear.

The point to this is to provide hands on training relative how one should evaluate such gear, install it, maintain it (maintenance instruction on other systems such as the engine will also be included) and operate it. Charter guests would get instruction, hands on use and comprehensive study materials and documentation.


It seems to me that most of the charter operations and sailing schools out there do not cater to this market. Now, I understand that this is because the market my concept is aimed at is very small. There are FAR more folks who just want to charter a simple, new boat in the BVI and go to Foxys and get drunk. That’s great! But there are also already a ton of companies and thousands of boat competing for this biz.

I am not looking to keep 50 boats booked 30 weeks a year. I am looking to keep 1 boat booked maybe 15 weeks per year. That’s it. Remember… the boat will be paid for and this business does not have to provide me a living. If it all goes great…. Then I have ideas for how it could be expanded. Lots of ideas. Grand schemes in fact. But first things first.

It seems to me that this concept would appeal to people who are considering living aboard or long term cruising. IT would also appeal to people looking to refit or upgrade their own boat and looking to learn more about how to approach the entire project.

I also think this concept could appeal because the costs would be reasonable. I expect to be able to offer this kind of crewed charter for not much if any more than a bareboat charter from lots of the big players.

For one thing… I will have less $ in the boat. If I buy a $140K boat and spend $75K on a full refit (and I will do most of the work myself… I am capable/qualified to do so) I will still have FAR less invested than most similar sized new bareboats on offer.

So….. IS this stupid / crazy / doomed to failure? What should I consider? Anyone interested?



Terry
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  #2  
Old 01-10-2008
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I think, once you investigate how much the insurance is going to cost, you'll find that this will be more difficult to do than you'd expect. Using the boat as a sailing school or charter boat will require you to have commercial insurance including liability, and commercial insurance is fairly expensive.

The tax issues will also be a problem, since you'll be living aboard. You'll probably need to consult an accountant.
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Old 01-10-2008
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From a business perspective - you have to wonder how to target that audience because:

1. Most that own a boat - either:

a. Do it themselves.
b. Use the buddy system to get desired help.
c. Pay someone to just do it.

So that leaves you with the crowd maybe looking to buy a boat. However, most people looking to buy a boat - want to know the systems on the boat they are buying (not really they just want a boat that fits them).

2. Not everyone wants to be a know everything kinda person. For instance some not mechanically inclined (like me) have no interest but love diddling with electronics. It would be hard to tear down and re-install all this type of gear on your boat - that would be tremendous risk of failure on your behalf.

3. Insurance implications - someone can get electrocuted, finger cut off (assuming this is all going to be hands on after some class room lab experience)...Insurance companies are going to want qualified individuals that have experience...before insuring this endeavor (boat / charter insurance will not be enough)

4. People will not necessarily book a weekend off for their vacation week - to still work again (unless you have a really good marketing effort).

Unless you actually have instructor type experience, you'll find that it can be more frustrating than it is worth. Plus, you will have to spend a bunch on spares - because - let's face it - just because you have the equipment new, each time it is tore down and re-installed, wear - tear, and mistakes...

I would start first with couple hours seminar to see if you have viability to do this (ie interest level). Some maybe ok with a 3 hour course for $40-60, but may not want to pay charter prices for the week / weekend. But you can gauge that by first doing short duration seminars and have pamphlets out detailing the charter schedule / program.

Start small - before going big...the biggest mistakes people make in trying to start a business, is not the idea - but the execution to get there... as most think solid plan, but not understanding the dynamics of customer centric relationships and being able to align such with your end business goal....

Just a casual 2 cents...it looks good on paper but I would recommend getting there in smaller steps without the big investment up front...
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Old 01-10-2008
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I just read Foxy's and drunk So I am for it .

The sailing club I belong too, is the only one in the US with it's format, everyone thought he was crazy, and he turned a defunct, joke of a club into a thriving operation with outstanding growth. So just because it is different, does not mean it is wrong.

I guess, if the numbers, business plan and marketing plan works out, then go for it. I don't know you, so don't take offense to this, it is not meant mean spirited. If you are looking for validation from the community here, then you need to work on yourself as much as you do the business, so you have what it takes to push thru all the hurdles and nay-sayers.

If you are just looking for our opinion, then I say go for it. The worst case is you have a good boat and a little less cash.
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Bit of clarification....

I would not be living aboard. My family and I plan to live aboard and cruise extensively in 3 years but in the meantime I own a business and am working.

The instruction would be done by a licensed, experienced and qualified instructor (I have an excellent Captain already lined up for this).

Gear would not actually be torn apart or disassembled. What I am talking about is showing how gear is installed, how it works and reviewing how it is maintained. NOT actually installing it, taking it all apart or such! I cannot imagine anyone wanting to spend time doing that.

I am started and run a couple of successful business and thus have a good grasp of what is involved.

The idea behind this business is basically to achieve some complicated tax objectives (already structured in depth with tax attorney) and to have the boat pay its own upkeep. I do not need to make a living at this.

I am still researching insurance but I doubt this would need anything different than any other sailing school / charter would have. If the costs of such insurance were insurmountable then such schools would not exist.

Charter guests would get as much or as little "systems" training as they wanted. In other words.... the guys could spend time tinkering with boat stuff while the wives enjoy the beach if thats what they want to do. My idea is not to have this be a 10 hour per day strictly structured college coarse that ends with you covered in grease with scraped knuckles. ITs to offer a nice boat setup with all the cruising gear and instruction on how it works and details all about it.... while also allowing plenty of time for sailing and having fun.


Terry
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Old 01-10-2008
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Everything posted still applies... take a day or too actually think about it. Having run several failure start-ups and successful businesses myself - you can try to justify all you want to - if all you want to hear is "Go get them cowboy", you got it... but if you want solid business advice... I suggest the Small Business Bureau in your locale, or hire someone to analyze your business objectives in conjunction with your business plan so that you can have a strategy for customer acquisition, retention, and future growth... its a decent idea perhaps but the weight of content in my first reply. But seriously, if you have never spent some time with the Small Business Bureau you should (great folks with volunteers like myself - that have run businesses)...the closest thing you can get to free sound business advice...

Like I stated - it would be best to do small seminars first, to see if you can garner actual interest. Keep in mind Home Depot does the same thing - with exception for them it is a loss leader kinda deal as the intent is to have them shop at the store to do the project at home... but it is a loss leader...

However: [On Edit] your comment, "Gear would not actually be torn apart or disassembled. What I am talking about is showing how gear is installed, how it works and reviewing how it is maintained. NOT actually installing it, taking it all apart or such! I cannot imagine anyone wanting to spend time doing that." - I would have to say - why would I bother...if there is no hands on.. one can read the documentation or go to YouTube.... the hands on is where you would set yourself apart... Home Depot - my example - encourages the hands on approach... maybe working a deal with local marine shops etc... however, you are probably smart enough to see where I am going...

And on aside - since you separate yourself that way you can make strategic partnerships with Charter agencies as well as vendors... making the niche market for yourself (niche is where entrepreneurs make it) but that is about the amount of free dribble I can provide.... you have an idea - you have some basic building blocks suggested... what you make of it - is up to you...

Asking in forums is great and all but a real strategy is actually doing it small scale and working up - knowing you have that capability...

And oh - keep in mind that if the boat is registered under your business - if the business flops - so goes the boat in most situations...Make sure you address that situation with your tax attorney as you will need to prove 3 out of 5 years - profit before being considered a solid business...
-

However, if all you are doing is merely an act to escape tax consequences - you will end up not doing yourself any favors and nor anyone that pays to be part of that venture... and likely find yourself sued...
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Last edited by artbyjody; 01-11-2008 at 12:21 AM.
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Old 01-10-2008
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Ok... that changes things quite a bit. I think that you have a chance at doing this successfully. Marketing it will be the most difficult part. I think part of it depends on what part of the country you're located in.
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Old 01-11-2008
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Yeah, I gotta agree. You need a bigger net to catch your fish. There are sailors a plenty that would love to have some inexperienced schmuck come aboard and install things on their boat in exchange for the experience. And if you want to learn how to install/use something on a boat, there is no better boat to do it on than your own.
One thing that does appeal to me is the companies, i believe there is a sailing school in SoCal, that sail around the world and take sign ups for legs of the trips. you learn everything you need to know about living aboard and sailing the world for extended periods. Its hands on in every aspect.
I don't want to go to the BVI for lessons. i can get that stuff here for much cheaper and learn much more. I go on vacation to go on vacation.
So that is just one opinion from a daysailor/boat owner that is in the process of expanding his horizons for cruising and schooling.
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Old 01-11-2008
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Not sure where you plan on doing this. There are schools now, some very well established and marketed, that offer live aboard classes to prepare couples for taking off. That is just one of the many classes they offer from entry level to racing.

At the end of the day, after boat expenses and captains salary, you will be lucky to cover half of your boat expenses. True, it is just one boat that you want to book for X part of the year. However, there are efficiencies in numbers which you do not have.

If your boat is beautiful, in a beautiful place, and your captain/instructor is a great person/teacher/cook/story teller/mechanic/sailor you may have a chance. You just have to figure out how to tell the consumer about it.

Good Luck
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Old 01-11-2008
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There are a number of adventure sailing schools that run with varying degrees of success. Mahina Expedition ( http://www.mahina.com/ ) is one of the better known, longer running ones. The systems idea is an interesting one and is a niche I haven't seen. However, it seems to me that you will need some degree of hands-on to sell the maintenance idea, even if it is changing oil and impellers on engines, bleeding fuel lines, flushing watermakers and changing membranes, cleaning strainers, changing water filters, lubing furling gear, going up the mast, cleaning and sealing coax connectors, perhaps some splicing. Remember air conditioning and diesel heaters (forced air and hydronic).

One issue will be that many people will already be locked into brands (someone with a Village Tech watermaker may not believe the applicability of messing about with your Spectra).

Communications is particularly diverse. I think you would need to carry gear for voice and data for SSB and Iridium to address client desires. Don't forget to figure in the cost of air time for the satellite practice.

It also seems to me that your market will require some customization. Your skipper should be able to teach things like celestial navigation, dead reckoning, pilotage, close-quarters boathandling, and talk about anchors and anchoring objectively and without offending anyone with deeply held religious belief in the virtues of their anchor of choice.

Your market is likely to be dominated by people with or looking at new or newer boats. Mahina is - I believe - on their third Hallberg-Rassy to stay current.

Depending on where you are planning to sail you may have to observe Jones Act requirements. If you are operating internationally you'll certainly want your captain to have a USCG Master's license *AND* an RYA Yachtmaster.

Per the above comment, I'm not sure you can operate effectively without two crew: your captain/instructor and a hostess/cook.

Systems are interesting, but it sure is biting off a lot. I honestly wish you luck.

If you go for it and run a celestial course I'd be interested. Remember we have to be far enough offshore for a real horizon -- none of this artificial horizon hooey!
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