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How to Start a Boat Rental Business

Written by:

Carolyn Young is a business writer who focuses on entrepreneurial concepts and the business formation. She has over 25 years of experience in business roles, and has authored several entrepreneurship textbooks.

Edited by:

David has been writing and learning about business, finance and globalization for a quarter-century, starting with a small New York consulting firm in the 1990s.

How to Start a Boat Rental Business

Fast Facts

Investment range

$6,250 - $17,200

Revenue potential

$80,000 - $360,000 p.a.

Time to build

1 – 3 months

Profit potential

$48,000 - $216,000 p.a.

Industry trend

Growing

Commitment

Flexible

What’s more relaxing than being on a boat? Whether it’s fishing, skiing, tubing, cruising or just meandering, boating is always a good time. That’s why boat rentals are a $5 billion industry in the US. If you’re lucky enough to live near a sizable body of water, you could start a boat rental business, provide good times to locals and vacationers alike and make good money at the same time. And the best part of having a boat rental business is that it’s fun! You get to work by the water and take your boats out whenever you like.

Before you start riding the waves, though, you’ll need to know what you’re getting into. Fortunately, you’ll find all the information you need in this step-by-step guide designed to prepare you to launch and run a successful boat rental business.

Step 1: Decide if the Business Is Right for You

Pros and cons

Starting a boat rental business has pros and cons to consider before deciding if it’s the right path for you.

Pros

  • Share Your Passion – Provide customers with great boating experiences
  • Good Money – Even small boats can bring in $100 an hour
  • Flexibility – Work on your time, play on your time

Cons

  • Pricey Maintenance – Boats need maintenance and repairs
  • Investment Required – Boats don’t come cheap

Boat rental industry trends

Industry size and growth

boat rental industry size and growth

Trends and challenges

Trends in the boat rental industry include:

  • The most popular reason for a boat rental is fishing. This presents a revenue opportunity for boat rental businesses to also rent fishing equipment.
  • New technologies offer additional safety features for boats, so a boat rental business with the latest boat technology can offer that as a selling point.

Challenges in the boat rental industry:

  • Rising fuel prices are cutting into the profit margins of boat rental businesses.
  • Accidents on boats are common, and if injuries result, boat rental businesses can face liability. For this reason, good insurance is crucial. 
boat rental industry Trends and Challenges

Demand hotspots

boat rental industry demand hotspots

What kind of people work in boat rentals?

  • Gender – 11.2% of boat workers are female, while 81.9% are male.((https://www.zippia.com/boat-deckhand-jobs/demographics/))
  • Average level of education – The average boat worker has a bachelor’s degree
  • Average age – The average boat worker in the US is 46 years old.
boat rental industry demographics

How much does it cost to start a boat rental business?

Startup costs for a boat rental business range from $6,000 to $17,000. Costs include a down payment on your boat or boats, life jackets and equipment, a boat slip rental, and boat insurance.

You’ll need a handful of items to successfully launch your boat rental business, including: 

  • Life jackets
  • Throwable flotation devices
  • Fire extinguishers
  • Signalling devices
Start-up CostsBallpark RangeAverage
Setting up a business name and corporation$150 - $200$175
Business licenses and permits$100 - $300$200
Insurance$100-$300$200
Business cards and brochures$200 - $300$250
Website setup$1,000 - $3,000$2,000
1 - 3 boats - down payment$3,000 - $9,000$6,000
Life jackets and other equipment$1,000 - $2,000$1,500
Boat slip rental$500 - $1,500$1,000
Boat insurance$200 - $600$400
Total$6,250 - $17,200$11,725

How much can you earn from a boat rental business?

You can rent a small boat for about $100 per hour or $600 to $700 for a full day. Your profit margin after maintenance, fuel, and other expenses should be about 60%. 

In your first year or two, if you have one boat and rent it an average of four hours 200 days of the year, you’ll bring in $80,000 in annual revenue. This would mean $48,000 in profit, assuming that 60% margin. As your business gains traction and you get referrals, you could add two more boats and rent them for 6 hours on 200 days. With annual revenue of $360,000, you’d make a tidy profit of $216,000.

boat rental business earnings forecast

What barriers to entry are there?

There are a few barriers to entry for a boat rental business. Your biggest challenges will be:

  • Obtaining financing to make a boat down payment
  • Close proximity to a body of water required

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Step 2: Hone Your Idea

develop a business idea

Now that you know what’s involved in starting a boat rental business, it’s a good idea to hone your concept in preparation to enter a competitive market. 

Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.

Why? Identify an opportunity

Research boat rental businesses in your area and online to examine their services, price points, and customer reviews, as well as what type of boats and services rent best. You’re looking for a market gap to fill. For instance, maybe the local market is missing a family-focused boat rental business, with skiing and tubing and swimming outings. 

You might consider targeting a niche market by specializing in a certain aspect of your industry, such as charter boat tours.

This could jumpstart your word-of-mouth marketing and attract clients right away. 

What? Determine your services

First, you need to decide what kind of boats you want to buy. You could choose to buy a:

  • Kayak
  • Personal watercraft like a jet ski
  • Pontoon boat
  • Bow-rider boat
  • Sailboat
  • Cabin cruiser
  • Fishing boat
  • Houseboat
  • Ski boat
  • You could even go crazy and buy a yacht!

In addition to boat rentals, you could offer the following:

  • Charter boat tours or fishing boat charters
  • Fishing gear rental
  • Snorkeling gear rental
  • Snack and beverage sales
  • Dinner cruises

How much should you charge for boat rentals?

Your prices will depend on the type of boats that you have. Small boats rent for $100 an hour. Cabin cruiser boats rent for much more. Your ongoing costs will be fuel, maintenance, slip rental, and insurance. You should aim for a profit margin of about 60%.

Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.

Who? Identify your target market

Your target market will be mainly locals and tourist visitors. You should spread out your marketing to include sites like TikTok, Instagram, and Facebook. You can also distribute brochures at local hotels, restaurants, and other tourist spots. 

Where? Choose your business premises

You really don’t need a space other than your boat slip unless you want to have a small rental office. Find commercial space to rent in your area on sites such as Craigslist, Crexi, and Instant Offices.

When choosing a commercial space, you may want to follow these rules of thumb:

  • Central location accessible via public transport
  • Ventilated and spacious, with good natural light
  • Flexible lease that can be extended as your business grows
  • Ready-to-use space with no major renovations or repairs needed
boat rental business idea rating

Step 3: Brainstorm a Boat Rental Business Name

Your business name is your business identity, so choose one that encapsulates your objectives, services, and mission in just a few words. You probably want a name that’s short and easy to remember, since much of your business, and your initial business in particular, will come from word-of-mouth referrals.

Here are some ideas for brainstorming your business name:

  • Short, unique, and catchy names tend to stand out
  • Names that are easy to say and spell tend to do better 
  • Name should be relevant to your product or service offerings
  • Ask around — family, friends, colleagues, social media — for suggestions
  • Including keywords, such as “boats” or “boat rentals”, boosts SEO
  • Name should allow for expansion, for ex: “Aqua Adventures Boat Rentals” over “Sailboat Rentals”
  • Avoid location-based names that might hinder future expansion

Discover over 250 unique boat rental business name ideas here. If you want your business name to include specific keywords, you can also use our boat rental name generator. Just type in a few keywords and hit “generate” and you’ll have dozens of suggestions at your fingertips.

Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these. 

Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that sets your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.

Step 4: Create a Boat Rental Business Plan

Every business needs a plan. This will function as a guidebook to take your startup through the launch process and maintain focus on your key goals. A business plan also enables potential partners and investors to better understand your company and its vision:

  • Executive Summary: A brief summary outlining the boat rental business plan, highlighting key aspects and objectives.
  • Business Overview: Detailed information about the boat rental business, including its mission, vision, and legal structure.
  • Product and Services: Description of the types of boats and additional services offered for rental, emphasizing unique features and value.
  • Market Analysis: Examination of the target market, including demographics, trends, and potential growth opportunities for the boat rental business.
  • Competitive Analysis: Evaluation of competitors in the boat rental industry, highlighting strengths, weaknesses, and strategies to gain a competitive edge.
  • Sales and Marketing: Strategies for promoting and selling boat rental services, including pricing, distribution channels, and marketing campaigns.
  • Management Team: Introduction to key individuals leading the boat rental business, emphasizing their expertise and roles.
  • Operations Plan: Details on the day-to-day operations of the boat rental business, covering logistics, equipment maintenance, and customer service.
  • Financial Plan: Comprehensive financial projections, including income statements, balance sheets, and cash flow forecasts for the boat rental business.
  • Appendix: Supplementary materials, such as resumes of key team members, additional market research, or any other relevant documents supporting the business plan.
what to include in a business plan

If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.

Step 5: Register Your Business

Registering your business is an absolutely crucial step — it’s the prerequisite to paying taxes, raising capital, opening a bank account, and other guideposts on the road to getting a business up and running.

Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business! 

Choose where to register your company

Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you’re planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to boat rental businesses. 

If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state. 

Choose your business structure

Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your boat rental business will shape your taxes, personal liability, and business registration requirements, so choose wisely. 

Here are the main options:

  • Sole Proprietorship – The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
  • General Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
  • Limited Liability Company (LLC) – Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts.
  • C Corp – Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation.
  • S Corp – An S-Corporation refers to the tax classification of the business but is not a business entity. An S-Corp can be either a corporation or an LLC, which just need to elect to be an S-Corp for tax status. In an S-Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.
types of business structures

We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have.

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Step 6: Register for Taxes

The final step before you’re able to pay taxes is getting an Employer Identification Number, or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN. 

Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.

The IRS website also offers a tax-payers checklist, and taxes can be filed online.

It is important to consult an accountant or other professional to help you with your taxes to ensure you’re completing them correctly.

Step 7: Fund your Business

Securing financing is your next step and there are plenty of ways to raise capital:

  • Bank loans: This is the most common method but getting approved requires a rock-solid business plan and strong credit history.
  • SBA-guaranteed loans: The Small Business Administration can act as guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan.
  • Government grants: A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
  • Friends and Family: Reach out to friends and family to provide a business loan or investment in your concept. It’s a good idea to have legal advice when doing so because SEC regulations apply.
  • Crowdfunding: Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund your vision. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business.
  • Personal: Self-fund your business via your savings or the sale of property or other assets.

Bank and SBA loans are probably the best option, other than friends and family, for funding a boat rental business. 

types of business financing

Step 8: Apply for Licenses and Permits

Business Licenses and Permits

Starting a boat rental business requires obtaining a number of licenses and permits from local, state, and federal governments.

You’ll likely need a watercraft license. Check with your state for requirements.

Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits. 

You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more. 

You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package. They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.

This is not a step to be taken lightly, as failing to comply with legal requirements can result in hefty penalties.

If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.

Step 9: Open a Business Bank Account

Before you start making money, you’ll need a place to keep it, and that requires opening a bank account.

Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your boat rental business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.

Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account. 

Step 10: Get Business Insurance

Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.

Here are some types of insurance to consider:

  • General liability: The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
  • Business Property: Provides coverage for your equipment and supplies.
  • Equipment Breakdown Insurance: Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
  • Worker’s compensation: Provides compensation to employees injured on the job.
  • Property: Covers your physical space, whether it is a cart, storefront, or office.
  • Commercial auto: Protection for your company-owned vehicle.
  • Professional liability: Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
  • Business owner’s policy (BOP): This is an insurance plan that acts as an all-in-one insurance policy, a combination of the above insurance types.
types of business insurance

Step 11: Prepare to Launch

Launching a Business

As opening day nears, prepare for launch by reviewing and improving some key elements of your business. 

Essential software and tools

Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks. 

You may want to use industry-specific software, such as Alert, booqable, or Quipli, to manage your bookings, inventory, purchases, and payments.

Accounting

  • Popular web-based accounting programs for smaller businesses include Quickbooks, Freshbooks, and Xero
  • If you’re unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences for filing incorrect tax documents can be harsh, so accuracy is crucial. 

Develop your website

Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism.

You can create your own website using website builders. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.

They are unlikely to find your website, however, unless you follow Search Engine Optimization (SEO) practices. These are steps that help pages rank higher in the results of top search engines like Google. 

Marketing

For your boat rental business, a marketing strategy should center on creating a significant local footprint, crafting a recognizable brand identity, and cultivating a dedicated clientele. Here’s a streamlined marketing approach tailored to your needs.

Digital Presence and Online Marketing

  • Vibrant Social Media Presence: Leverage Instagram, Facebook, and YouTube to showcase the beauty of your boats and the experiences customers can enjoy on the water.
  • Search Engine Optimization (SEO): Optimize your website for keywords related to boat rentals and local water-based activities to capture the interest of potential customers searching online.
  • Online Reservations System: Implement a seamless online booking system on your website with clear, actionable steps for customers to reserve their boat rental.

Content Marketing and Engagement

  • Nautical Blogging: Share blogs on topics such as safe boating tips, best local destinations for boating, and how to make the most out of a boat rental day.
  • Customer Reviews and Testimonials: Highlight positive customer experiences through testimonials and reviews, encouraging new customers to book with confidence.

Experiential and In-Person Engagements

  • Boat Shows and Expos: Participate in boat shows and water sports expos to showcase your fleet and offer special rental deals.
  • Waterfront Engagement: Host events or partner with waterfront businesses to provide quick and easy boat rental options for tourists and locals.

Collaborations and Community

  • Partnerships with Local Businesses: Work with local hotels, resorts, and travel agencies to offer boat rental packages to their guests.
  • Community Water Safety Programs: Support or create programs that promote water safety and responsible boating, increasing your visibility as a community-centric business.

Customer Relationship and Loyalty Programs

  • Captain’s Club Membership: Create a loyalty program that rewards repeat customers with perks such as discounts, upgrades, or complimentary add-ons.
  • Referral Bonuses: Encourage customers to refer friends and family with incentives, such as discounted rentals or additional rental hours.

Promotions and Advertising

  • Targeted Digital Advertising: Use digital advertising to target potential customers planning vacations or looking for local water activities.
  • Influencer Partnerships: Collaborate with travel and lifestyle influencers to reach a wider audience and showcase the experience of renting your boats.

Kickstart Marketing

  • Eye-Catching Signage: Ensure your dock or rental location has attractive signage that can be seen from a distance, inviting potential renters.
  • Promotional Discounts: Offer introductory discounts or off-season promotions to attract customers during slower periods.
  • Email Marketing Strategies: Send out newsletters with seasonal booking incentives, boating news, and special event information to keep your audience engaged.

Focus on USPs

Unique selling propositions, or USPs, are the characteristics of a product or service that sets it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your boat rental business meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire. 

Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your boat rental business could be: 

  • Discount full-day boat rentals – explore the whole lake!
  • Fishing boat rentals with all equipment provided
  • Evening dinner cruises – watch the sunset in the lap of luxury
unique selling proposition

Networking

You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a boat rental business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in boats for years and can offer invaluable insight and industry connections. 

The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in boat rentals. You’ll probably generate new customers or find companies with which you could establish a partnership. 

Step 12: Build Your Team

Building a Team for a New Business

You may not need any employees at first, but as your business grows and you grow your fleet, you will likely need workers to fill various roles. Potential positions for a boat rental business include:

  • Boat Rental Clerks – make sales, prepare boats
  • General Manager – scheduling, staff management, accounting
  • Marketing Lead – SEO strategies, social media

At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need. 

Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent. 

Step 13: Run a Boat Rental Business – Start Making Money!

Running a Business

As you can see, a boat rental business can bring in good money, even if your boats only rent for 200 days a year. You have a ton of options too, in terms of the types of boats you can rent and the services you offer. It takes a bit of an investment, but a boat rental business offers a great lifestyle as well as a great income. Boat rentals are a $5 billion industry, so why not be one of the entrepreneurs raking in that cash?

You’re off to a great start with solid business knowledge in your tool bag, so put your plan together and get ready for launch!

Boat Rental Business FAQs

How profitable can a boat rental business be?

Even small boats rent for $100 per hour, so there is definitely good money to be made. If you have several boats you can make thousands of dollars a day, so even if your area has an off-season, you’ll bring in a healthy income. But you’ll also need to deliver excellent service!

How can I differentiate my boat rental business from competitors in the area?

You can differentiate your boat rental business by offering outstanding customer service or lower prices than competitors. You could also rent fishing gear. 

What are some tips for maintaining a positive online presence and reputation for my boat rental business?

First of all, you’ll need to offer a great customer experience so that people will not post negative things about your business online. You also should monitor the web, and respond in a positive way to negative comments.

What happens during a typical day at boat rental business?

As a boat rental business owner, you’ll speak with customers, provide them with safety guidelines, and have them sign rental agreements and liability waivers. You may also spend some of your days on marketing activities.

Can you start boat rental business on the side?

A boat rental business can be a great side hustle. You could just run it on the weekends or during the summer months. 

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How to Start a Boat Rental Business