Starting a jet ski rental business can be very profitable. With proper planning, execution and hard work, you can enjoy great success. Below you will learn the keys to launching a successful jet ski rental business.
Importantly, a critical step in starting a jet ski rental business is to complete your business plan. To help you out, you should download Growthink’s Ultimate Business Plan Template here.
14 Steps To Start a Jet Ski Rental Business:
- Choose the Name for Your Jet Ski Rental Business
- Develop Your Jet Ski Rental Business Plan
- Choose the Legal Structure for Your Jet Ski Rental Business
- Secure Startup Funding for Your Jet Ski Rental Business (If Needed)
- Secure a Location for Your Business
- Register Your Jet Ski Rental Business with the IRS
- Open a Business Bank Account
- Get a Business Credit Card
- Get the Required Business Licenses and Permits
- Get Business Insurance for Your Jet Ski Rental Business
- Buy or Lease the Right Jet Ski Rental Business Equipment
- Develop Your Jet Ski Rental Business Marketing Materials
- Purchase and Setup the Software Needed to Run Your Jet Ski Rental Business
- Open for Business
1. Choose the Name for Your Jet Ski Rental Business
The first step to starting a jet ski rental business is to choose your business’ name.
This is a very important choice since your company name is your brand and will last for the lifetime of your business. Ideally you choose a name that is meaningful and memorable. Here are some tips for choosing a name for your jet ski rental business:
- Make sure the name is available. Check your desired name against trademark databases and your state’s list of registered business names to see if it’s available. Also check to see if a suitable domain name is available.
- Keep it simple. The best names are usually ones that are easy to remember, pronounce and spell.
- Think about marketing. Come up with a name that reflects the desired brand and/or focus of your jet ski rental business.
2. Develop Your Jet Ski Rental Business Plan
One of the most important steps in starting a jet ski business is to develop your jet ski rental business plan. The process of creating your plan ensures that you fully understand your market and your business strategy. The plan also provides you with a roadmap to follow and if needed, to present to funding sources to raise capital for your business.
Your business plan should include the following sections:
- Executive Summary – this section should summarize your entire business plan so readers can quickly understand the key details of your jet ski rental business.
- Company Overview – this section tells the reader about the history of your jet ski rental business and what type of jet ski rental business you operate. For example, are you a beach rental business, marina rental business or a water park rental business?
- Industry Analysis – here you will document key information about the jet ski rental industry. Conduct market research and document how big the industry is and what trends are affecting it.
- Customer Analysis – in this section, you will document who your ideal or target customers are and their demographics. For example, how old are they? Where do they live? What do they find important when purchasing services like the ones you will offer?
- Competitive Analysis – here you will document the key direct and indirect competitors you will face and how you will build competitive advantage.
- Marketing Plan – your marketing plan should address the 4Ps: Product, Price, Promotions and Place.
- Product: Determine and document what products/services you will offer
- Prices: Document the prices of your products/services
- Place: Where will your business be located and how will that location help you increase sales?
- Promotions: What promotional methods will you use to attract customers to your jet ski rental business? For example, you might decide to use pay-per-click advertising, public relations, search engine optimization and/or social media marketing.
- Operations Plan – here you will determine the key processes you will need to run your day-to-day operations. You will also determine your staffing needs. Finally, in this section of your plan, you will create a projected growth timeline showing the milestones you hope to achieve in the coming years.
- Management Team – this section details the background of your company’s management team.
- Financial Plan – finally, the financial plan answers questions including the following:
- What startup costs will you incur?
- How will your jet ski rental business make money?
- What are your projected sales and expenses for the next five years?
- Do you need to raise funding to launch your business?
3. Choose the Legal Structure for Your Jet Ski Rental Business
Next you need to choose a legal structure for your jet ski rental company and register it and your business name with the Secretary of State in each state where you operate your business.
Below are the five most common legal structures:
1) Sole proprietorship
A sole proprietorship is a business entity in which the jet ski rental owner and the business are the same legal person. The owner of a sole proprietorship is responsible for all debts and obligations of the business. There are no formalities required to establish a sole proprietorship, and it is easy to set up and operate. The main advantage of a sole proprietorship is that it is simple and inexpensive to establish. The main disadvantage is that the owner is liable for all debts and obligations of the business.
2) Partnerships
A partnership is a legal structure that is popular among small businesses. It is an agreement between two or more people who want to start a jet ski rental business together. The partners share in the profits and losses of the business.
The advantages of a partnership are that it is easy to set up, and the partners share in the profits and losses of the business. The disadvantages of a partnership are that the partners are jointly liable for the debts of the business, and disagreements between partners can be difficult to resolve.
3) Limited Liability Company (LLC)
A limited liability company, or LLC, is a type of business entity that provides limited liability to its owners. This means that the owners of an LLC are not personally responsible for the debts and liabilities of the business. The advantages of an LLC for a jet ski rental business include flexibility in management, pass-through taxation (avoids double taxation as explained below), and limited personal liability. The disadvantages of an LLC include lack of availability in some states and self-employment taxes.
4) C Corporation
A C Corporation is a business entity that is separate from its owners. It has its own tax ID and can have shareholders. The main advantage of a C Corporation for a jet ski rental business is that it offers limited liability to its owners. This means that the owners are not personally responsible for the debts and liabilities of the business. The disadvantage is that C Corporations are subject to double taxation. This means that the corporation pays taxes on its profits, and the shareholders also pay taxes on their dividends.
5) S Corporation
An S Corporation is a type of corporation that provides its owners with limited liability protection and allows them to pass their business income through to their personal income tax returns, thus avoiding double taxation. There are several limitations on S Corporations including the number of shareholders they can have among others.
Once you register your jet ski rental business, your state will send you your official “Articles of Incorporation.” You will need this among other documentation when establishing your banking account (see below). We recommend that you consult an attorney in determining which legal structure is best suited for your company.
4. Secure Startup Funding for Your Jet Ski Rental Business (If Needed)
In developing your jet ski rental business plan, you might have determined that you need to raise funding to launch your business.
If so, the main sources of funding for a jet ski rental business to consider are personal savings, family and friends, credit card financing, bank loans, crowdfunding and angel investors. Angel investors are individuals who provide capital to early-stage businesses. Angel investors typically will invest in a jet ski rental business that they believe has high potential for growth.
5. Secure a Location for Your Business
When starting a jet ski rental business, you will need to find a location that is both accessible and appealing to customers. You may want to look for a spot on the water close to a popular beach or park. You’ll also need to ensure that there is plenty of parking available, so customers can easily get to and from your business.
6. Register Your Jet Ski Rental Business with the IRS
Next, you need to register your business with the Internal Revenue Service (IRS) which will result in the IRS issuing you an Employer Identification Number (EIN).
Most banks will require you to have an EIN in order to open up an account. In addition, in order to hire employees, you will need an EIN since that is how the IRS tracks your payroll tax payments.
Note that if you are a sole proprietor without employees, you generally do not need to get an EIN. Rather, you would use your social security number (instead of your EIN) as your taxpayer identification number.
7. Open a Business Bank Account
It is important to establish a bank account in your jet ski rental business’ name. This process is fairly simple and involves the following steps:
- Identify and contact the bank you want to use
- Gather and present the required documents (generally include your company’s Articles of Incorporation, driver’s license or passport, and proof of address)
- Complete the bank’s application form and provide all relevant information
- Meet with a banker to discuss your business needs and establish a relationship with them
8. Get a Business Credit Card
You should get a business credit card for your jet ski rental business to help you separate personal and business expenses.
You can either apply for a business credit card through your bank or apply for one through a credit card company.
When you’re applying for a business credit card, you’ll need to provide some information about your business. This includes the name of your business, the address of your business, and the type of business you’re running. You’ll also need to provide some information about yourself, including your name, Social Security number, and date of birth.
Once you’ve been approved for a business credit card, you’ll be able to use it to make purchases for your business. You can also use it to build your credit history which could be very important in securing loans and getting credit lines for your business in the future.
9. Get the Required Business Licenses and Permits
The licenses and permits you need to start a jet ski rental business will vary depending on your location. In most cases, you will need a business license, a zoning permit, and a watercraft registration. You may also need a maritime transportation license and a pollution prevention certificate.
10. Get Business Insurance for Your Jet Ski Rental Business
The type of insurance you need to operate a jet ski hire business depends on the state in which you are doing business.
Some business insurance policies you should consider for your jet ski rental business include:
- General liability insurance: This covers accidents and injuries that occur on your property. It also covers damages caused by your employees or products.
- Auto insurance: If a vehicle is used in your business, this type of insurance will cover if a vehicle is damaged or stolen.
- Workers’ compensation insurance: If you have employees, this type of policy works with your general liability policy to protect against workplace injuries and accidents. It also covers medical expenses and lost wages.
- Commercial property insurance: This covers damage to your property caused by fire, theft, or vandalism.
- Business interruption insurance: This covers lost income and expenses if your business is forced to close due to a covered event.
- Professional liability insurance: This protects your business against claims of professional negligence.
Find an insurance agent, tell them about your business and its needs, and they will recommend policies that fit those needs.
11. Buy or Lease the Right Jet Ski Rental Business Equipment
To start a jet ski rental business, you will need a few key pieces of equipment. You will need reliable jet skis, a boat ramp or dock, a trailer to transport the jet skis, and a storage area to store the jet skis. You may also want to invest in a jet ski lift to make it easier to launch and retrieve the jet skis from the water.
12. Develop Your Jet Ski Rental Business Marketing Materials
Marketing materials will be required to attract and retain customers to your jet ski rental business.
The key marketing materials you will need are as follows:
- Logo: Spend some time developing a good logo for your jet ski rental business. Your logo will be printed on company stationery, business cards, marketing materials and so forth. The right logo can increase customer trust and awareness of your brand.
- Website: Likewise, a professional website provides potential customers with information about the jet ski rental services you offer, your company’s history, and contact information. Importantly, remember that the look and feel of your website will affect how customers perceive you..
- Social Media Accounts: establish social media accounts in your company’s name. Accounts on Facebook, Twitter, LinkedIn and/or other social media networks will help customers and others find and interact with your jet ski rental business.
13. Purchase and Setup the Software Needed to Run Your Jet Ski Rental Business
The software required to run a jet ski rental agency is a point of sale (POS) system, preferably one that is integrated with a reservation system. You will also need accounting software to track finances and a customer relationship management (CRM) system to manage customer data. Additionally, you will need a website to advertise your business and a payment gateway to process transactions.
14. Open for Business
You are now ready to open your jet ski rental business. If you followed the steps above, you should be in a great position to build a successful business and know everything you need about how to start a jet ski rental business anywhere including Florida, Mexico, California and Texas. Below are answers to frequently asked questions that might further help you.
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How to Start a Jet Ski Rental Business FAQs
Is it hard to start a jet ski rental business?
No, it is easy to start a jet ski rentals business because it does not require a lot of startup capital. You also don't need a lot of experience or training. All you need is a place to store the jet skis and some marketing materials to attract customers.
How can I start a jet ski rental business with no experience?
There are a few ways you can start a jet ski rental business with no experience. You can start by doing some research on the internet or by reading books about the topic. You can also attend workshops and seminars on how to start a jet ski rental business. Additionally, you can speak to people who have experience in this industry.
What type of jet ski rental business is most profitable?
The type of jet ski rental business that is most profitable is the one that offers the lowest prices. This will allow more jet skiing customers to rent from your company, which will generate greater revenue.
How much does it cost to start a jet ski rental business?
It typically costs around $10,000-$50,000 to start up a jet ski rental business. This will cover the cost of the jet skis, signage, and a storage facility.
What are the ongoing expenses for a jet ski rental business?
There are a few ongoing expenses involved in running a jet ski rental business. The main expense is the cost of keeping the jet skis in good condition. This can include regular maintenance and repairs. Additionally, the business will need to pay for storage space, insurance, and licensing fees. Finally, the business will need to cover the cost of employee salaries and marketing expenses. By understanding these ongoing expenses, jet ski rental businesses can plan for future costs and ensure that they can keep their companies running smoothly.
How does a jet ski rental business make money?
A jet ski rental business makes money by renting jet skis to customers. The business can charge a per-day fee or an hourly rate. Another way jet ski rental businesses make money is by charging customers to take a jet ski tour, allowing them to explore a particular area. In addition, the business can make money by selling jet ski equipment and accessories.
Is owning a jet ski rental business profitable?
Yes, owning a jet ski rental business can be profitable. The jet ski rental business is growing in popularity, and there is a high demand for this type of service.
Why do jet ski rental businesses fail?
There are several reasons why jet ski rental businesses may fail, including:
- Lack of proper safety and instruction procedures
- Poor maintenance of the equipment
- Limited availability of jet skis during peak demand periods
- Inexperienced drivers who do not know how to operate the jet skis properly
- High costs associated with running the business, such as insurance, fuel, and repairs
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